The CPP Fund shrank by $17.2 billion to $105.5 billion in the fiscal year ended March 31, the Canada Pension Plan Investment Board said Thursday.
This reflects an investment return of negative 18.6% amid the turmoil in global financial markets.
The CPPIB invests billions of dollars not immediately needed to cover Canada Pension Plan benefits.
The loss on investments totalled $23.6 billion in fiscal 2009, partly offset by $6.6 billion in contributions from employers and workers.
The return of the CPP Fund in fiscal 2009 essentially matched the fund’s market-based benchmark, adding one basis point above the benchmark return of negative 18.63%, the CPPIB said.
“Despite the CPP Fund’s first substantial decline since its inception, which reflects unprecedented turmoil in the markets, we remain well-positioned to generate the returns necessary to deliver on our mandate of helping to pay pensions for decades and generations to come,” says David Denison, president and CEO, CPPIB.
The primary factor affecting the CPP fund’s performance was the sharp decline in global public equity values during the course of the fiscal year. Worsening global economic fundamentals also resulted in lower valuations across the CPP Fund’s private equity and real estate holdings.
The CPP fund benefitted from a significant increase in the value of its government bond holdings and solid cash inflows generated by its infrastructure investments.
Market turmoil has presented the CPP Fund with “unprecedented opportunities” the CPPIB says, noting also that it has the capacity to pursue these opportunities.
IE