CPPIB names Asia, international head Mark Machin as CEO

Machin, who joined CPPIB in 2012 after a 20-year career at Goldman Sachs, most of which was spent in Asia, will take over from Mark Wiseman in June. Machin will continue to lead the international and Asia businesses until a successor is announced. Wiseman, who has led the organization since 2012, is joining BlackRock as senior managing director and head of the firm's global active equity business.

"I am particularly pleased to assume the helm at a time when CPPIB is playing an increasingly important role globally, investing and managing the portfolio to ensure the long-term growth and sustainability of the CPP Fund," Machin said in a statement.

As head of international, he has been responsible for CPPIB's international investment activities and managing global advisory relationships at a time when the organization's percentage of total assets deployed outside of Canada has risen to 80.9%.

CPPIB had C$278.9 billion ($213.1 billion) in assets for the year ended March 2016, up from C$264.6 billion 12 months earlier, according to its annual report. The increase includes C$9.1 billion in investment income, with the fund delivering a gross investment return for the year of 3.7%. It has generated C$125.6 billion in cumulative net investment income over the last 10 years and C$160.6 billion since inception in 1999.

The Asia private equity portfolio grew to C$10.8 billion from C$7.7 billion over the 12 months to March 2016. The team made C$2 billion in new commitments to six funds, five of which are new relationships. It also closed six direct investments worth C$1 billion and received C$900 million in distributions from the whole Asia PE portfolio.

As of December 2015, CPPIB had Asia-focused funds in its portfolio managed by CITIC Capital Partners, KKR, Hony Capital, TPG Capital, CDH Investments, Baring Private Equity Asia, Multiples Alternative Asset Management, Archer Capital, FountainVest Partners, Anchor Equity Partners, Hopu Capital, CVC Capital Partners, Hillhouse Capital, India Value Fund Advisors, Bain Capital, Trustbridge Partners, and PAG Asia.

PAG, Bain and India Value Fund, all of which closed funds in the last 12 months, are among the new relationships.

The most significant co-investment was the acquisition of a 21.5% interest in South Korean retailer Homeplus for $534 million as part of a $6.4 billion buyout led by MBK. The annual report also highlights the exit of Key Safety Systems, a co-investment with FountainVest. The company will be sold to Shanghai-listed Ningbo Joyson Electronic Corporation for $920 million; CPPIB expects a 2.5x money multiple and proceeds of $182 million after a holding period of less than two years.

Other Asia co-investments from the past 12 months include HCP Packaging, which Baring Asia acquired from TPG Capital for $775 million, and Korean e-commerce site Ticket Monster, which KKR and Anchor bought for $360 million. CPPIB also has online-to-offline services provider Meituan-Dianping and real estate e-commerce platform Fangdd.com - both China businesses - listed among its co-investments. These may have been direct commitments made by the relationship investing team rather than co-investments alongside portfolio managers.

As of March, CPPIB had C$132.9 billion in its private markets investment programs, up from C$107.7 billion a year earlier. This comprises C$53.8 billion in private equity, C$36.7 billion in real estate, C$21.3 billion in infrastructure, C$17 billion in private debt, and C$4.1 billion in private real estate debt. Private debt and infrastructure have seen the largest proportional increases from 2015.

Japan accounts for 6.5% of CPPIB's overall portfolio, with Australia and the rest of Asia representing 2.8% and 9.1%. The annual report identifies two other significant Asian investments over the past 12 months: a RMB3.2 billion commitment to Postal Savings Bank of China - via the relationship investing team - as part of RMB45.1 billion pre-IPO round; and a $1 billion injection into an existing China logistics joint venture with Goodman Group.

CPPIB also opened its Mumbai office in October 2015, which now has a staff of six. A further 65 people are based in Hong Kong out of a total international headcount of 204, up from 173 a year ago.

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