Canada Pension Plan looks for big, global deals

Fri Nov 9, 2012 7:00pm EST
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By Andrea Hopkins

TORONTO (Reuters) - The Canada Pension Plan Investment Board, one of the world's biggest pension funds and global dealmakers, said it was looking for big, complex acquisitions to boost its portfolio and outmaneuver rivals as the world's economy improves.

CPPIB, whose assets rose to a record C$170.1 billion in the third quarter from C$165.8 billion three months earlier, said its long-term investment horizon and increasingly skilled team of dealmakers will give it an advantage as improving U.S. and Chinese economies bring competitors back to the playing field.

"I think you'll expect to see us favoring larger and more complex deals that are global in nature," Chief Executive Officer Mark Wiseman said in an interview after the fund's second-quarter results were released.

"What we try to do is exploit the areas where we have comparative advantages, and that tends to be in larger transactions, in transactions where the value creation will play out over a long period of time, and in transactions that are occasionally complex in nature," he said.

"We've now built a team with high capabilities that can transact globally and in complex large-scale opportunities."

He said the fund, which invests on behalf of 18 million Canadian contributors and beneficiaries, was still trying to diversify geographically out of Canada. He said it is focusing on emerging markets where the pace of growth was higher than the rest of the world.

Wiseman was optimistic about improving prospects for recovery in the United States, despite the fiscal cliff concern, and in China, where data on Friday showed infrastructure investment accelerated and output from the country's factories ran at its fastest in five months.

"I do think you are seeing signs of longer-term prospects for growth, both in the U.S. -- and that will obviously have an impact on Canada as well -- but also some of the numbers that came out of China this morning are cautiously encouraging," Wiseman said.   Continued...

Labour activists and union members gather at Queen's Park to advocate pension protections from government and corporations in Toronto, in this file photo taken April 23, 2009. REUTERS/Mark Blinch