CPP Investment takes $7.9 billion hit as markets fall

Fri Feb 13, 2009 4:55pm EST
 
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TORONTO (Reuters) - One of Canada's largest pension plans said on Friday it took a $7.9 billion hit to its portfolio during the final quarter of 2008 due to ongoing financial market turmoil.

Canada Pension Plan Investment Board said its assets under management fell to $108.9 billion in the quarter ended December 31. This compared with assets of $117.4 billion three months earlier

The board, which invests funds not yet needed by the country's main public pension plan, said the decline was mainly the result of a negative 6.7 percent investment performance.

It said an outflow of $600 million as part of its cash management role for the Canada Pension Plan also lowered assets.

The CPP Investment Board said the primary factor behind its third quarter performance was the decline in equity markets, notably drops of more than 20 percent in Toronto's S&P/TSX index and the S&P 500.

"Sharp declines in global equity markets, especially in October and November, negatively impacted our results for the quarter," David Denison, CPP Investment Board's chief executive officer, said in a statement.

The pension fund manager said its portfolio is structured to withstand a prolonged market downturns because it will be about 11 years before it needs a small portion of its investment income to help pay pensions.

Investments held by the CPP Fund include public equities, private equities, real estate, inflation-linked bonds, fixed-income instruments and infrastructure.

($1=$1.24 Canadian)

(Reporting by Frank Pingue; Editing by Jeffrey Hodgson)