Bloomberg News

Canada Pension to Grow Australia Investments for Higher Returns

February 03, 2012

Feb. 2 (Bloomberg) -- The Canada Pension Plan Investment Board, which manages about C$155 billion ($155 billion), plans to increase its longer-dated investments in Australia to boost returns, Chief Executive Officer David Denison said.

“We would like to grow CPPIB’s presence here,” Denison told the Canadian Australian Chamber of Commerce in Sydney today, according to an e-mailed copy of his speech. “Long duration infrastructure assets are highly attractive investments for us because we manage a portfolio that spans multiple generations.”

The pension fund is no stranger to Australia, with more than half of its C$10 billion allocated to Asia-Pacific region invested in the country, he said. It has partnered with the Australian Future Fund and with real estate companies including Westfield Group, Goodman Group and Dexus Property Group, and has been a shareholder of some of the nation’s biggest companies including BHP Billiton Ltd., Commonwealth Bank of Australia and Newcrest Mining Ltd.

The fund, forecast to double to more than C$300 billion within the next decade and to more than CS$500 billion by 2031, is looking oversees as it seeks to ensure future cash flows, Denison said. Australia’s commodities and connections to fast- growing Asian markets, tax policies and promotion of private ownership of infrastructure make it an attractive destination, he added.

The fund remains concerned about the openness of Australia and other countries to foreign ownership of their assets, Denison said, citing the government’s rejection of a proposed merger between the Australian stock exchange and its Singaporean counterpart.

He also expressed concern that more investors, particularly pension plans and life insurance companies, are shortening their investment horizons, doing away with their ability to provide more sustainable funding for longer-term projects.

--Editors: Linus Chua, Andreea Papuc

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#<601284.1045692.2.1.95.14779.25># -0- Feb/02/2012 02:50 GMT

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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