CPP Investments F2023 Results
Summary
TLDRJohn Graham discusses the resilience of the CPP fund amidst global challenges like the war in Ukraine, inflation, and high interest rates. Despite market declines, the fund achieved a 10-year annualized net return of 10% and reached $570 billion in assets. The CPP fund's active management strategy and commitment to sustainability, including a net-zero target by 2050, are highlighted. Investments in diverse sectors like energy, retail, and hospitality are mentioned, showcasing the fund's adaptability and long-term growth focus.
Takeaways
- 🌍 The world has experienced significant changes, including ongoing war in Ukraine, geopolitical tensions, high inflation, and rising interest rates.
- 🇨🇦 Despite challenges, the Canadian Pension Plan (CPP) fund remains resilient and strong, thanks to a prudent investment strategy.
- 📈 The CPP fund has produced solid results, with a 10-year annualized net return of 10 percent, showcasing its ability to create value for future generations.
- 💹 The CPP fund's net assets grew by $31 billion this year, reaching $570 billion, with a 1.3 percent return after expenses, even amidst a decline in global markets.
- 🔄 The fund's active management strategy, with diverse investments across continents and asset classes, has allowed it to outperform most major indexes.
- 🌱 Sustainability is a priority, with the CPP fund committing to net-zero emissions by 2050 and achieving carbon neutrality in its global operations.
- 📊 The Chief Actuary of Canada's financial review confirms that current benefit levels are sustainable for at least the next 75 years at the existing contribution rates.
- 📈 Recent investments include Era Energy in California, D1 in Colombia, and a joint venture in the European hospitality sector, demonstrating a focus on growth and sustainability.
- 🤝 The CPP fund's success is attributed to its people, who embody the guiding principles of integrity, partnership, and high performance.
- 🔮 Looking ahead, market volatility is expected to continue, but the CPP fund is well-prepared to navigate through challenging economic cycles.
Q & A
What are the current challenges mentioned in the global context that have affected financial markets?
-The challenges include the ongoing effects of the war in Ukraine, high geopolitical tensions, high inflation, and rising interest rates.
How has the CPP fund maintained its resilience and strength despite these challenges?
-The CPP fund has maintained its resilience through a prudent investment strategy designed to create value for generations, with active management seeking the best investment opportunities globally.
What is the role of the Chief Actuary of Canada in relation to the CPP fund?
-The Chief Actuary of Canada conducts a financial review of the CPP every three years to evaluate its financial sustainability.
What was the conclusion of the latest financial review of the CPP fund?
-The latest review concluded that existing benefit levels are sustainable at current contribution rates for at least the next 75 years.
What was the 10-year annualized net return achieved by the CPP fund?
-The CPP fund achieved a 10-year annualized net return of 10 percent.
How much did the CPP fund grow this year, and what was its net asset value?
-This year, the CPP fund grew by 31 billion to reach 570 billion in net assets.
What was the return on investment after all expenses for the CPP fund this year?
-The CPP fund earned a 1.3 percent return after all expenses.
How has the CPP fund's active management strategy contributed to its performance?
-The active management strategy with diverse investments across continents and asset classes has enabled the CPP fund to outperform most major indexes.
What commitment has the CPP fund made regarding sustainability?
-The CPP fund has committed its portfolio and operations to achieve Net Zero by 2050 and has made progress towards this goal, including achieving carbon neutrality in its global operations.
Can you provide examples of recent investments made by the CPP fund?
-Recent investments include Era Energy in California, D1, a discount grocery chain in Colombia, and a joint venture in the European Hospitality sector with the acquisition of the W Rome hotel in Italy.
What are the guiding principles of the CPP fund's team?
-The guiding principles of the team are integrity, partnership, and high performance.
What is the outlook for the CPP fund in terms of market volatility and returns?
-The outlook suggests that market volatility will continue and returns may be lower than in past years, but the CPP fund is built to navigate through such conditions and perform well in challenging economic cycles.
Outlines
🌟 Introduction and Global Challenges
John Graham introduces himself and discusses the significant changes in the world over the past three years, including the ongoing war in Ukraine, geopolitical tensions, high inflation, and rising interest rates. He acknowledges the challenges faced by financial markets and the impact on Canadians. Despite these challenges, he emphasizes the resilience and strength of the CPP fund, attributing its success to a prudent investment strategy aimed at long-term value creation.
📈 CPP Fund's Resilience and Financial Review
The script highlights the CPP fund's solid performance and the chief actuary of Canada's financial review, which concluded that the current benefit levels are sustainable for at least the next 75 years with existing contribution rates. This review reassures Canadians of the CPP's long-term support.
🚀 CPP Investments' Strategy and Performance
The focus of CPP Investments is on supporting multiple generations with pensions. The script proudly announces a 10-year annualized net return of 10 percent and a growth of 31 billion to reach 570 billion in net assets. Despite market declines, the active management strategy has allowed the fund to outperform major indexes. The script also addresses the importance of sustainability, with a commitment to Net Zero by 2050 and achieving carbon neutrality in global operations.
🌍 Diverse Investments and Sustainability Efforts
The script details recent investments made by CPP Investments, including Era Energy in California, D1 in Colombia, and a joint venture in the European hospitality sector. These investments reflect a strategy of balancing strong returns with sustainability and meeting energy demands while transitioning to renewable energy. The script emphasizes the use of the fund's size and scale to drive change and generate strong returns.
🤝 People and Principles
The importance of the people behind CPP Investments is highlighted, with a focus on their guiding principles of integrity, partnership, and high performance. The script expresses pride in the team's dedication to growing the fund for the benefit of all Canadians.
🔮 Future Outlook and Market Volatility
Looking ahead, the script anticipates continued market volatility and potentially lower returns than in previous years. However, it reassures Canadians that CPP Investments is built to navigate such conditions and perform well through challenging economic cycles. The CPP fund is expected to remain strong and resilient for decades to come.
Mindmap
Keywords
💡CPP Fund
💡Geopolitical tensions
💡Inflation
💡Interest rates
💡Prudent investment strategy
💡Active management
💡Sustainability
💡Net Zero
💡Market volatility
💡Diversified investments
💡Carbon neutrality
Highlights
The world has experienced significant changes over the past three years, including the ongoing war in Ukraine, geopolitical tensions, high inflation, and rising interest rates.
Despite challenges, the CPP fund remains resilient and strong, producing solid results through a prudent investment strategy.
CPP Investments actively seeks the best investment opportunities globally to ensure long-term growth.
The chief actuary of Canada has confirmed that the CPP's financial sustainability is maintained for at least the next 75 years at current contribution rates.
CPP Investments has achieved a 10-year annualized net return of 10 percent.
The CPP fund grew by $31 billion in net assets, reaching $570 billion, with a 1.3 percent return after expenses.
CPP Investments' active management strategy has outperformed most major indexes despite market declines.
Sustainability is a priority, with a commitment to Net Zero by 2050 and achieving carbon neutrality in global operations.
CPP Investments is actively investing in renewable energy and supporting energy transition efforts.
The fund has made its first direct private equity investment in Colombia with D1, a growing discount grocery chain.
A new joint venture in the European hospitality sector has been established, starting with the acquisition of the W Rome hotel.
CPP Investments' team embodies integrity, partnership, and high performance in their work.
Market volatility is expected to continue, but CPP Investments is prepared to navigate through challenging economic cycles.
CPP Investments is confident that the CPP fund will remain strong and resilient for decades to come.
Transcripts
hello I'm John Graham
the world has changed quite a bit over
the past three years we continue to see
the effects of the war in Ukraine
geopolitical tensions High inflation and
Rising interest rates
it's been especially challenging in the
financial markets and we know many
Canadians are feeling it too one thing
that hasn't changed is the resilience
and strength of the CPP fund we're
producing solid results thanks to our
prudent investment strategy designed to
create value for Generations as active
managers we seek the best investment
opportunities wherever they are to
ensure continued growth over the long
term
in a world where investment philosophies
can Veer from one quarter to the next
our highly experienced investors are
trained to look ahead and to be patient
every three years the chief actuary of
Canada conducts a financial review of
the CPP to evaluate its Financial
sustainability this year the latest
review concluded existing benefit levels
are sustainable at current contribution
rates for at least the next 75 years
Canadians can rest assured we will be
there to support the CPP through thick
and thin
let's take a look at how the CPP fund
performed this year at CPP Investments
we're focused on helping to pay pensions
for multiple Generations that's why
we're proud to share we've achieved a
10-year annualized net return of 10
percent
this year the CPP fund grew by 31
billion to reach 570 billion in net
assets earning a 1.3 percent return
after all expenses
and we've made these gains despite a
significant decline in global equity and
fixed income markets our active
management strategy with diverse
Investments across continents and asset
classes has enabled us to outperform
most major indexes
this past year we heard directly from
Canadians at public meetings held Coast
to Coast many of you told us how
sustainability is top of mind and we
agree considering sustainability is
important to maximizing long-term
investment value last year we committed
our portfolio and operations to Net Zero
by 2050 and we're making solid progress
towards the school in this fiscal year
we achieved carbon neutrality in our
Global operations
as active investors we're using our size
and scale to drive real change and
ultimately generate strong returns
here's a quick look at some of our
recent Investments
era energy is California's second
largest oil and gas producer accounting
for nearly a quarter of the state's
production
we're looking to pursue strong
investment returns by helping era
balance its energy transition efforts
with the need to continue meeting
California's energy demands by investing
in renewable energy to power existing
operations
we also made our first direct private
Equity investment in Colombia with D1 a
rapidly growing discount grocery chain
D1 is a market leader in Latin America's
expanding retail space offering private
label products at affordable prices
and we were pleased to establish a new
joint venture in the European
Hospitality sector by acquiring
operating hotels in popular destinations
to capitalize on growing tourism trends
our first acquisition in this Venture
was the W Rome hotel in Italy none of
this is possible without our people it's
truly inspiring to see firsthand the
important work they are doing
representing our guiding principles of
Integrity partnership and high
performance we are all proud to be
dedicated to Growing the fund for the
benefit of all Canadians looking ahead
we expect Market volatility to continue
returns may be lower than in past years
but we will navigate through in the face
of wide-ranging market and economic
conditions we were built for times like
this it's through challenging economic
cycles that active managers like CPP
Investments perform well Canadians can
have confidence the CPP fund will remain
strong and resilient and will be there
for decades to come
thank you
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