The Canada Pension Plan Investment Board(CPPIB)takes a total portfolio approach to investing, according to the firm’s director of capital markets, Daniel Chiu.
Speaking at the sixth annual Canada Cup of Investment Management in Toronto earlier today, he said the approach focuses on risk/return characteristics of investments rather than traditional asset class labels.
The near-term asset-mix target of the CPP is 60% equity, 30% fixed income and 10% real return assets. There are no specific allocations to private equity, infrastructure or real estate.
Chiu said if the fund invests in private equity, then the CPP would reduce its equity holdings to make way for the new investment or sell real return bonds to make room for real estate, which provide similar returns.
There is a more detailed explanation of the approach in the fund’s annual report on the CPPIB’s website. To view it, click here.
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