/EINPresswire.com/ -- TORONTO, ONTARIO -- (Marketwired) -- 11/12/15 -- All figures in Canadian dollars unless otherwise noted.

The CPP Fund ended its second quarter of fiscal 2016 on September 30, 2015, with net assets of $272.9 billion, compared to $268.6 billion at the end of the previous quarter. The $4.3 billion increase in assets for the quarter consisted of $4.2 billion in net investment income after all CPPIB costs and $0.1 billion in net CPP contributions. The portfolio delivered a gross investment return of 1.62% for the quarter, or 1.55% on a net basis.

For the six month fiscal year-to-date period, the CPP Fund increased by $8.3 billion from $264.6 billion at March 31, 2015. This included $4.0 billion in net investment income after all CPPIB costs and $4.3 billion in net CPP contributions. The portfolio delivered a gross investment return of 1.6% for this period, or 1.5% on a net basis.

"Despite significant declines across all major global equity markets and mixed results in fixed income markets this quarter, the CPP Fund showed a modest gain. Broad diversification of the investment portfolio across geographies and asset classes contributed to the Fund's resiliency," said Mark Wiseman, President & Chief Executive Officer, CPP Investment Board (CPPIB). "As a long-term investor, our five- and 10-year returns are the most important measurements of our performance, and these remain strong."

The Canada Pension Plan's multi-generational funding and liabilities give rise to an exceptionally long investment horizon. To meet long-term investment objectives, CPPIB is building a portfolio and investing in assets designed to generate and maximize long-term, risk-adjusted returns. Accordingly, long-term investment returns are a more appropriate measure of CPPIB's performance than returns in any given quarter or single fiscal year.

Long-Term Sustainability

In the most recent triennial review released in December 2013, the Chief Actuary of Canada reaffirmed that, as at December 31, 2012, the CPP remains sustainable at the current contribution rate of 9.9% throughout the 75-year period of his report. The Chief Actuary's projections are based on the assumption that the Fund will attain a prospective 4.0% real rate of return, which takes into account the impact of inflation. CPPIB's 10-year annualized nominal rate of return of 7.3%, or 5.6% on a real rate of return basis, was comfortably above the Chief Actuary's assumption over this same period. These figures are reported net of all CPPIB costs to be consistent with the Chief Actuary's approach.

The Chief Actuary's report also indicates that CPP contributions are expected to exceed annual benefits paid until the end of 2022, after which a portion of the investment income from CPPIB will be needed to help pay pensions.

Asset Mix
----------------------------------------------------------------------------
For the period ending September 30, 2015
($ billions)
----------------------------------------------------------------------------
                                                               $           %
Equities
  Public                                                    83.1        30.4
  Private                                                   55.8        20.5
                                                    ------------------------
                                                           138.9        50.9

Fixed Income                                                80.2        29.4
(includes bonds, money market securities, other debt
 and debt financing liabilities)

Real Assets
  Real Estate                                               34.3        12.6
  Infrastructure                                            19.5         7.1
                                                    ------------------------
                                                            53.8        19.7
----------------------------------------------------------------------------
Total(1)                                                   272.9       100.0
----------------------------------------------------------------------------
(1) Excludes non-investment assets (such as premises and equipment) and non-
investment liabilities, totalling $15 million for Q2 F2016.

Q2 Investment Highlights:

Private Investments

--  Signed an agreement with Wolf Infrastructure Inc. to establish a
    midstream energy infrastructure investment vehicle focused on
    acquisition opportunities in Western Canada. Wolf will identify
    opportunities and operate and manage the assets held in the vehicle.
    CPPIB will provide funding for such future acquisitions and the
    development of midstream opportunities. The vehicle's goal is to
    initially invest more than $1 billion in the sector.

--  Acquired a stake of approximately 20% in Homeplus, Tesco's South Korean
    business, for US$534 million, as part of a consortium led by MBK
    Partners. The total transaction value is approximately US$6 billion.
    Homeplus is one of the largest multi-channel retailers in South Korea
    and the number two player in both hypermarkets and supermarkets.

--  As previously announced, CPPIB and Hermes Infrastructure acquired a
    33.33% interest in Associated British Ports (ABP), the U.K.'s leading
    ports group, owning and operating 21 ports with a diverse cargo base,
    long-term contracts and a broad mix of blue chip customers. Following
    this initial acquisition, CPPIB completed an additional investment of
    approximately GBP 250 million and now holds an ownership stake of 33.88%
    in ABP.

--  Invested approximately US$169 million for a minority stake in a joint
    patent licensing program for digital television and computer display
    monitor from Technicolor S.A. and Sony Corporation.

--  Acquired a 24.5% interest in the Pocahontas Parkway, an 8.8-mile tolled
    highway located seven miles south of Richmond, Virginia. Financial terms
    for the transaction were not disclosed.

--  Committed approximately US$100 million to the President Residential
    Mortgage Partners L.P. fund, for a U.S. performing and non-performing
    residential mortgage strategy, including both loans and related
    servicing operations.

--  Completed the acquisition of Antares Capital, through Antares Holdings,
    a subsidiary of CPPIB Credit Investments Inc., alongside Antares
    management, for a total consideration of approximately US$12 billion.
    CPPIB Credit Investments' equity investment was approximately US$3.9
    billion. Antares is a leading lender to middle market private equity
    sponsors in the U.S.

--  An affiliate of CPPIB Credit Investments Inc., a wholly owned subsidiary
    of CPPIB, entered into an agreement to provide a Senior Secured Term
    Loan in an amount of up to US$650 million to Marina District Finance
    Company, Inc., which operates the Borgata Hotel Casino & Spa in Atlantic
    City, New Jersey, a leading entertainment destination resort.

Public Market Investments

--  Acquired 52.9 million common shares of Entertainment One Ltd. (eOne) for
    GBP 142.4 million. Following the investment, CPPIB participated in
    eOne's subsequent rights issue in excess of its pro rata share,
    increasing CPPIB's pro forma ownership interest to approximately 18.7%.
    eOne is a leading international independent film and television
    entertainment company.

--  Completed a follow-on investment of $71.9 million in WSP Global Inc.
    (WSP), a leading global pure-play engineering services firm, through a
    private placement for common shares to support WSP's acquisition of MMM
    Group Ltd., a Canadian engineering services firm. CPPIB's total
    investment in WSP to date is $491 million for an ownership interest of
    approximately 17.9%.

Real Estate Investments

--  An affiliate of CPPIB Credit Investments Inc., a wholly owned subsidiary
    of CPPIB, entered into an agreement to provide a US$526 million
    construction-to-permanent loan to Kemper Development Company. The loan
    will finance the 1.5-million-square-foot expansion of the Bellevue
    Collection known as the Lincoln Square Expansion, in Bellevue,
    Washington.

--  Formed a joint venture with Pavilion Group to invest in Pavilion
    Damansara Heights, a mixed-use development project in Kuala Lumpur,
    Malaysia. CPPIB will commit approximately $170 million for a 49%
    interest in the development.

--  Formed a 45%/55% joint venture with Welltower Inc., formerly Health Care
    REIT, Inc., to hold a portfolio of eight medical office buildings in
    Southern California, valued at US$449 million. The majority of assets
    are located within the Golden Triangle district of Beverly Hills,
    California, a premier medical office market.

Investment highlights following the quarter end include:

--  Acquired a 10.6% ownership interest in a diversified portfolio of
    logistics properties in the United States for US$350 million. CPPIB
    formed a joint venture with Global Logistic Properties Limited and three
    other global institutional investors to jointly own the portfolio,
    comprising 722 high-quality logistics assets, including warehouses,
    business parks and light industrial assets, totalling 115 million square
    feet.

--  Committed to fund approximately 30% of the equity in Altice's proposed
    acquisition of Cablevision Systems Corporation (Cablevision), together
    with Funds advised by BC Partners, BC European Capital IX, and other co-
    investors. CPPIB and BC Partners are exercising their option to
    participate pro rata in the Cablevision acquisition as part of CPPIB and
    BC Partners' announced agreement to sell a majority stake in Suddenlink
    to Altice. CPPIB and BCEC IX will each fund 12% of the acquisition in
    Cablevision, approximately US$400 million each. Cablevision is one of
    the largest cable operators in the U.S.

--  Signed an agreement, through a jointly formed entity with The Broe
    Group, to acquire all of the Denver Julesberg Basin oil and gas assets
    in Colorado from Encana Oil & Gas (USA) Inc., a wholly owned subsidiary
    of Encana Corporation, for a total consideration of approximately US$900
    million. CPPIB will own a 95% interest in the entity.

--  Established the Goodman U.K. Logistics Partnership with Goodman Group
    and APG Asset Management, to invest in high-quality U.K. logistics and
    industrial development opportunities. Each investor will commit GBP 200
    million for a 33% interest in the Partnership. The initial portfolio
    comprises two developments in proven logistics locations close to London
    and Birmingham.

Asset Dispositions:

--  Sold our 50% interest in Tour KPMG, an office tower located in Montreal.
    Proceeds from the sale to CPPIB were approximately $89.1 million. The
    property was acquired in 2005 and held alongside our joint venture
    partner Oxford Properties.

--  Sold our 80% interest in Hurth Park Shopping Centre located in Hurth,
    Germany. Proceeds from the sale to CPPIB were approximately EUR95
    million. The regional shopping centre was acquired in 2010 with joint
    venture partner LaSalle Investment Management.

Corporate Highlights:

--  In October 2015, we officially opened a new office in Mumbai, India's
    financial capital, representing our seventh international office. The
    Mumbai office will expand CPPIB's global reach and enhance our strategy
    to build a diversified investment portfolio. The on-the-ground presence
    in India will allow CPPIB to better identify new investment
    opportunities through local expertise and partnerships.


Five and 10-Year Returns (1, 2)
(for the period ending September 30, 2015)

----------------------------------------------------------------------------
                    Investment Rate of Investment Rate of     Investment
                     Return (Nominal)        Return          Income( 3 )
                                             (Real)
----------------------------------------------------------------------------
5-Year Annualized         11.6%               9.7%          $109.1 billion
----------------------------------------------------------------------------
10-Year Annualized         7.3%               5.6%          $126.5 billion
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(1) After all CPPIB costs.
(2) Rates of return are calculated on a time-weighted basis.
(3) Dollar figures are cumulative.

About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 18 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and Sao Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At September 30, 2015, the CPP Fund totalled $272.9 billion. For more information about CPPIB, please visit www.cppib.com.

Contacts:
Dan Madge
Senior Manager, Media Relations
+1 416 868 8629
dmadge@cppib.com

Mei Mavin
Director, Corporate Communications
+44 20 3205 3515
mmavin@cppib.com

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