CPPIB posts 2012 gains, eyes deals in Europe, Asia

Thu May 17, 2012 2:01pm EDT
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By Andrea Hopkins

(Reuters) - The Canada Pension Plan Investment Board, an aggressive global dealmaker, notched smaller investment gains in 2012 as markets sagged but said it sees more opportunities than ever in 2013 as hard-pressed governments and companies seek partners with cash.

CPPIB, which manages Canada's national pension fund, said on Thursday its assets rose to a record C$161.6 billion ($160.2 billion), making it the seventh-largest pension fund in the world, as its investment portfolio returned 6.6 percent for the year ended March 31.

Incoming Chief Executive Mark Wiseman said CPPIB will continue to diversify into Asia and Latin America, particularly into India, but isn't taking its eyes off of Western Europe, where many investors now fear to tread.

"I think it is fair to say that Europe is generally unattractive for investment today, but there are pockets like essential infrastructure where we can make attractive investments," Wiseman told reporters following the release of the fund manager's fiscal 2012 results.

Wiseman said Europe, with its cash-strapped governments, strained companies and banks looking to divest assets to strengthen balance sheets, is a place where CPPIB's 75-year investment horizon is an advantage.

"No matter what happens in Europe, people will continue to heat their homes and cook with natural gas. There is a reason why we look at those parts of the economy that are essential regardless of short-terms swings in the economy. We believe that those assets are defensive and are very attractive to an investor like us."

The fund struck 60 global deals in fiscal 2012, many as part of a consortium, including the US$6.1 billion acquisition of medical technology company Kinetic Concepts Inc and the purchase of a 24.1 percent stake in Norway's Gassled gas transport infrastructure for C$3.2 billion. CPPIB has private holdings in 32 countries.

It was the sixth year of the fund manager's shift to an active investment strategy. It is seeking to boost returns on its massive portfolio by buying real estate, infrastructure and other assets around the world, while providing both private equity and credit to partners looking for cash.   Continued...