CPP INVESTMENT BOARD REPORTS FISCAL THIRD QUARTER PERFORMANCE RESULTS

Transcription

1 CPP INVESTMENT BOARD REPORTS FISCAL THIRD QUARTER PERFORMANCE RESULTS $5 Billin in Investment Incme TORONTO, ON (February 15, 2013): The CPP Fund ended the third quarter f its 2013 fiscal year n December 31, 2012 with net assets f $172.6 billin, cmpared t $170.1 billin at the end f the previus quarter. The $2.5 billin increase in net assets after perating expenses resulted frm $5.0 billin in investment incme and $2.4 billin f seasnal cash utflws. The CPP Fund rutinely receives mre CPP cntributins than are required t pay benefits during the first part f the calendar year and then remits a prtin f thse funds fr benefit payments in the latter part f the year. The prtfli had a grss investment return f 3.0% fr the quarter. Fr the nine mnth fiscal year t date, the CPP Fund increased by $11.0 billin frm $161.6 billin at March 31, This includes $9.0 billin in investment incme befre perating expenses, representing a grss investment return f 5.5% fr this perid, and $2.4 billin in net CPP cntributins. We cntinued t see slid returns this quarter due t strng increases in glbal public equity markets and incme generated by the prtfli s private assets, said Mark Wiseman, President and CEO, CPP Investment Bard (CPPIB). This quarter s results reflect the strength and capabilities f ur diversified glbal platfrm, as all investment grups delivered gains. Investment highlights during the fiscal third quarter include: Private Investments The Private Debt grup, thrugh CPPIB Credit Investments Inc., a whlly wned subsidiary f CPPIB, cmpleted several transactins during the quarter ttalling apprximately $1.0 billin, including: Purchased $105 millin in senir unsecured ntes in Just Energy Grup Inc., a TSX listed marketer f gas and electricity t residential and cmmercial custmers primarily in Nrth America. Entered int a subscriptin agreement t purchase US$200 millin in senir unsecured ntes in Legacy Oil + Gas Inc., a Calgary based intermediate il and gas prducer in Western Canada. Cmpleted a debt agreement with Frmula One Grup t finance US$400 millin f a US$1.0 billin private high yield lan. Frmula One is an icnic glbal sprts management rganizatin that hlds the rights t the FIA Frmula One Wrld Champinship.

2 The cmpletin in Nvember 2012 f tw significant private equity transactins: The acquisitin f Suddenlink Cmmunicatins, the seventh largest cable cmpany in the United States, fr US$6.6 billin by CPPIB, BC Partners and Suddenlink management. The acquisitin frm Tmkins f its Air Distributin divisin, a leading manufacturer f nn residential and residential air distributin system cmpnents, fr US$ 1.1 billin. An agreement t acquire a 39% stake in Drna Sprts S.L. alngside current sharehlders, Bridgepint and Drna management. Drna, which recently agreed t acquire the FIM Wrld Superbikes Champinship, als hlds the glbal rights until 2036 t rganize the FIM Rad Racing Wrld Champinship Grand Prix, knwn as MtGP. Public Market Investments The sale f CPPIB s investment in Prgress Energy Resurces Crp. fr $780 millin, fllwing the acquisitin f Prgress Energy by PETRONAS Canadian subsidiary, PETRONAS Carigali Canada Ltd. In February 2010, CPPIB s Relatinship Investments grup made a $350 millin equity investment in Prgress Energy via a private placement, fllwed by a $34 millin investment in a fllw n equity ffering in March An agreement with Halcón Resurces Crpratin t purchase US$300 millin f the cmpany s cmmn stck. This transactin clsed in December 2012 upn cmpletin f Halcón s acquisitin f significant Willistn Basin assets. Real Estate Investments An agreement t acquire Kista Galleria Shpping Centre in Stckhlm, Sweden alngside Citycn Oyj, a majr wner and peratr f shpping centres in the Nrdic and Baltic cuntries. CPPIB s equity investment is apprximately SEK 1.20 billin (C$178 millin) in the 50%/50% jint venture. The transactin clsed n January 17, The significant expansin f CPPIB s lgistics real estate prtfli in Brazil thrugh a jint venture alngside Glbal Lgistic Prperties Limited and tw ther large glbal institutinal investrs. CPPIB has cmmitted US$343 millin fr the jint acquisitin f tw lgistics prtflis in Brazil. An interest in tw prime Australian shpping centres thrugh an equity investment f $445 millin in AMP Capital Retail Trust (ACRT), a trust that wns 50% f Macquarie Centre in Sydney and 80% f Pacific Fair Shpping Centre n the Gld Cast. CPPIB s wnership interest in ACRT ttals 37%. Page 2

3 Investment highlights fllwing quarter end include: On February 4, 2013, CPPIB agreed t cmmit an additinal US$316 millin f equity t the Japan Develpment Venture, alngside 50%/50% jint venture partner Glbal Lgistic Prperties Limited. The Japan Develpment Venture was frmed in August 2011, with an initial cmbined equity cmmitment f US$500 millin, t develp mdern lgistics prperties in Japan. On January 17, 2013, CPPIB Credit Investments Inc. partnered with Stne Pint Capital and KKR & C. L.P. as an investr in MerchCap Slutins LLC (MCS). CPPIB will cmmit US$50 millin f equity t MCS, which prvides principal and agency based capital markets services t spnsrbacked and crprate mid market cmpanies. CPPIB has initially earmarked up t $2 billin f capital fr direct investment at its discretin in middle market debt transactins and ther nntraditinal crprate lending pprtunities arranged fr clients f MCS. On January 2, 2013, CPPIB cmpleted the acquisitin f an wnership stake in Cway frm the Wngjin Grup alngside a cnsrtium including MBK Partners and Ontari Teachers Pensin Plan. CPPIB s equity investment ttalled US$93 millin. Cway is Suth Krea s largest cnsumer health appliance rental and services cmpany. Lng Term Sustainability In the latest triennial review released in Nvember 2010, the Chief Actuary f Canada reaffirmed that the CPP remains sustainable at the current cntributin rate f 9.9% thrughut the 75 year perid f his reprt. The Chief Actuary s prjectins are based n the assumptin that the Fund will attain an annualized 4.0% real rate f return. The 10 year annualized nminal rate f return f the Fund is 6.7%. The Chief Actuary s reprt als indicates that CPP cntributins are expected t exceed annual benefits paid until 2021, prviding an eight year perid befre a prtin f the investment incme frm the CPPIB will be needed t help pay pensins. Page 3

4 Asset Mix Fr the perid ending December 31, 2012 ($ billins) $ % Equities Public Private Fixed Incme (includes bnds, mney market securities, ther debt and debt financing liabilities) Real Assets Real Estate Infrastructure Ttal Excludes nn investment assets such as premises and equipment and nn investment liabilities Five and 10 Year Returns (Fr the perid ending December 31, 2012) Investment Rate f Return Investment Incme 5 Year Annualized 3.1% $26.0 billin 10 Year Annualized 6.7% $68.6 billin Excludes perating expenses Nte: All figures in Canadian dllars unless therwise nted. Abut CPP Investment Bard CPP Investment Bard is a prfessinal investment management rganizatin that invests the funds nt needed by the Canada Pensin Plan t pay current benefits n behalf f 18 millin Canadian cntributrs and beneficiaries. In rder t build a diversified prtfli f CPP assets, the CPP Investment Bard invests in public equities, private equities, real estate, infrastructure and fixed incme instruments. Headquartered in Trnt, with ffices in Lndn and Hng Kng, the CPP Investment Bard is gverned and managed independently f the Canada Pensin Plan and at arm's length frm gvernments. At December 31, 2012, the CPP Fund ttalled $172.6 billin. Fr mre infrmatin abut the CPP Investment Bard, please visit Page 4

5 Fr mre infrmatin: Linda Sims Directr, Media Relatins (416) Page 5