CPPIB targets larger deals, wants to boost emerging markets exposure
Canada Pension Plan Investment Board (CPPIB) is looking to target larger, more complex acquisitions as part of a wider strategy to increase exposure to emerging markets, particularly China. Mark Wiseman, the plan’s CEO, made the observations as CPPIB announced that its assets rose to a record C$170.1 billion in the third quarter, up from C$165.8 billion three months earlier.
"I do think you are seeing signs of longer-term prospects for growth, both in the US - 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 told Reuters on Friday. Beijing had earlier released data indicating a jump in industrial output and fixed-asset investment.
Wiseman went on to explain that CPPIB would exploit areas where it has a comparative advantage, notably larger transactions that deliver value over a long period of time. He noted that the pension fund now has teams that are able to work on complex transactions globally. CPPIB shifted to an active investment strategy six years ago, focusing on areas such as infrastructure and real estate.
Prior to being named CEO earlier this year, Wiseman was already building up the fund's China exposure in his capacity as executive responsible for global investment programs. A Hong Kong office opened four years ago and it now houses more than 20 investment professionals, led by Mark Machin, former head of Goldman Sachs' investment banking business in Asia.
In addition to numerous commitments to GPs - and a certain amount of co-investment - CPPIB bought Australia's Intoll Group in 2010 and has made real estate acquisitions in Hong Kong and Australia as part of its relationship with Goodman Group.
It recently announced the acquisition of two interests in Australian shopping centers through a A$436 million ($450 million) investment in AMP Capital Retail Trust.
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