By David G. Barry
The Public Sector
Pension Investment Board,
one of Canada’s largest pension managers, saw net assets under management grow
by nearly CA$26 billion (US$20.5 billion) during the fiscal year ended March 31
– with a quarter coming from its credit portfolio.
PSP Investments ended the year with CA$230.5
billion in net assets (US$181.7 billion) and a 10.9% one-year net portfolio
return. Net contributions represented CA$3.5 billion while CA$22.5 billion was
generated by net income. Over the past 10 years, the Ottawa-based plan has a
net annual return of 9.8% and CA$25.9 billion in cumulative net investment
gains.
Credit, surprisingly,
was the biggest contributor to those gains as it rose by CA$7.4 billion to CA$21.9
billion. PSP said the gains were spurred by the record levels of acquisition
activity by private equity firms that led to “significant opportunities” for
credit investments across the debt capital spectrum. During the year, the
segment was up 7.5%.
Capital markets, which
includes public market equities and fixed income, accounts for 43.4% of PSP’s
portfolio. It generated 3% in 2021-2022. Private equity and real estate were
the best-performing sectors, generating 27.6% and 24.8%, respectively. Private
equity accounts for 15.3% of the portfolio while real estate counts for 13.5%.
Private equity’s net AUM role by CA$3.7 billion while real estate increased by CA$4.3
billion.
Infrastructure also
performed well, as its net AUM rose by CA$5.1 billion from the end of fiscal
year 2020-21 and produced a 13.9% return.
Neil Cunningham, PSP’s president and CEO, said
the fund “delivered solid, above-benchmark performance.” Cunningham has
announced he will retire from PSP at the end of the current fiscal year in
March 2023.
Established in 1999, PSP
manages and invests amounts transferred to it by the Government of Canada for
the pension plans of the federal Public Service, the Canadian Forces, the Royal
Canadian Mounted Police and the Reserve Force. It has offices in Montreal, New
York, London and Hong Kong.
