August 14, 2015 / 8:49 PM / 3 years ago

UPDATE 1-CPPIB return drops slightly on equity, fixed income declines

(Adds comments from CEO, paragraphs 5-10)

TORONTO, Aug 14 (Reuters) - The Canada Pension Plan Investment Board, one of the world’s biggest dealmakers, reported a small quarterly investment loss as declines in equity and fixed income markets offset gains in other investments.

The manager of Canada’s public pension fund said net assets were C$268.6 billion ($205.59 billion) as of June 30, that was up from C$264.6 billion as of March 31, but the increase was on the back of pension inflows and not investment gains the period.

Net contributions boosted the fund by C$4.2 billion during the first quarter ended on June 30, while the net investment loss was C$200 million.

The portfolio’s gross investment return was flat for the quarter, or down 0.1 percent on a net basis. Net returns exclude contributions and the fund’s costs.

Despite the recent tumultuous market conditions though, CPPIB Chief Executive Mark Wiseman stressed that the fund has no plans to sit on the sidelines.

“From an investor perspective, and not just any investor but one with the characteristics of CPPIB like scale, certainty of assets and a very long time horizon in terms of investment focus, these market conditions are actually quite favorable for us to be able to exploit those comparative advantages” said Wiseman.

“For a foreign investor with our characteristics, volatility is our friend. What we’re able to do in these market conditions, when others are shying away, when others lack liquidity and when others are forced to take a short view, is we can actually step in and take advantage of those market conditions,” he said.

CPPIB is invested in major infrastructure projects, real estate and other assets around the world. In June, it announced a deal to buy GE Capital’s private equity lending portfolio for $12 billion.

Wiseman said CPPIB is going to continue to invest overseas and diversify its portfolio, despite a recent weakening in the Canadian dollar.

“We will continue to aggressively diversify the portfolio across asset classes and geographies. What that really does is creates an all-weather, resilient portfolio for the long term. The most recent quarter is a perfect demonstration of that,” he said, noting that CPPIB was essentially flat in the quarter even though many of the world’s major indexes lost value in Canadian dollar terms in the period.

$1 = 1.3065 Canadian dollars Reporting by Euan Rocha and Allison Martell; Editing by Lisa Von Ahn and David Gregorio

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