Business · Markets · 22 mins ago
Canada’s Largest Pension Plans to Double Hedge Fund Investments
The Canada Pension Plan Investment Board plans to double its hedge fund investments to about $160 billion over the next five to seven years.
The Canadian pension fund currently has about $80 billion invested with hedge funds, and its total assets are expected to roughly double over the next seven years.
The board is interested in adding large firms it does not currently invest with, including Millennium Management.
Hedge fund investments helped the board beat its internal benchmarks in the last fiscal year, with external investments largely responsible for $3.4 billion in net income from its Capital Markets and Factor Investing segment.
The plan comes after volatile markets caused losses for some hedge funds, while the board says higher rates and market volatility can create opportunities for skilled managers.
The board invests with more than 60 fund managers, and its planned expansion would make it a larger backer of hedge funds.
The Canada Pension Plan Investment Board plans to roughly double its hedge fund investments to about $160 billion over the next five to seven years.
The pension currently has about $80 billion invested in hedge funds, according to people familiar with the matter.
The plans come as CPPIB expects its total assets to roughly double over the next seven years.
Hedge fund investments helped CPPIB outperform internal benchmarks in the fiscal year ended in March.
CPPIB is especially interested in large hedge funds it does not currently invest with.
- Who
- The Canada Pension Plan Investment Board (CPPIB), Canada’s largest pension.
- What
- It plans to roughly double its hedge fund investments to about $160 billion.
- When
- Over the next five to seven years.
- Where
- Canada; the plan concerns CPPIB’s investments. Specific investment locations are not stated.
- Why
- Hedge fund investments helped it outperform internal benchmarks, and CPPIB expects its total assets to roughly double over the next seven years.
CPPIB
Many pension funds and foundations cautious about new hedge fund investments
Investment approach
CPPIB
CPPIB plans to roughly double its hedge fund investments.
Many pension funds and foundations cautious about new hedge fund investments
Many pension funds and foundations are cautious about new hedge fund investments.
Reason
CPPIB
CPPIB’s hedge fund investments helped it outperform internal benchmarks.
Many pension funds and foundations cautious about new hedge fund investments
Reduced private equity distributions have left some investors short of cash to reinvest.
Hedge fund investments helped CPPIB outperform internal benchmarks, and its Capital Markets and Factor Investing segment generated $3.4 billion in net income.
CPPIB plans to increase its hedge fund allocation from about $80 billion to about $160 billion.
- Planned hedge fund allocation
- About $160 billion
- Current hedge fund investments
- About $80 billion
- Planning horizon
- Five to seven years
- Total assets
- C$866 billion ($608 billion)
- Capital Markets and Factor Investing net income
- $3.4 billion in the 12 months ended March
What people are saying
very favorable