CPPIB Trails Benchmark by 5.4 Points for 3rd Year as Private Equity Stalls
Updated
Updated · Financial Times · Jun 2
CPPIB Trails Benchmark by 5.4 Points for 3rd Year as Private Equity Stalls
1 articles · Updated · Financial Times · Jun 2
CPPIB’s fund rose 7.8% in the year to March, but lagged its benchmark by 5.4 percentage points—its third straight year of underperformance and longest such stretch since 2007.
Private equity, which makes up 24% of the portfolio, returned just 2% net of fees last year and has added no value over a decade by CPPIB’s own figures.
A weak exit market has compounded the drag: private-equity M&A totaled $172 billion in the three months to March, down 36% from the prior quarter, while holding periods have stretched to about seven years.
Other Canadian pension investors including Ontario Teachers and Aimco have also missed benchmarks for three consecutive years, raising broader questions about the long-vaunted 'Maple model' of internal, alternative-asset investing.
CPPIB still remains financially sound—Canada’s chief actuary said in December it can meet its mandate—and has delivered 5.9% real returns over the past decade.