Graham says deal structure, not ambition, will determine whether pensions back Ottawa's infrastructure push
Canada's largest pension fund returned 7.8 percent in fiscal 2026, but chief executive John Graham says Ottawa's push to privatise large public assets may be the bigger story, with any institutional opportunity hinging on deal structure.
According the Financial Post, Graham said airports, pipelines, and other infrastructure are well-established asset classes for pension investors.
Federal privatisation plans would generate significant interest, he added, conditional on adequate governance protections.
Graham told reporters Thursday that large capital commitments require “governance rights and ability to control your own destiny,” adding that “the devil's in the details” and expressing hope the terms would be resolved soon.
He said asset recycling had worked in countries such as Australia precisely because programs were structured to meet the risk appetite and objectives of long-term investors.
“Sometimes you sell assets outright, sometimes you sell it a 20-year concession, sometimes you bring them in as a partner,” Graham said. “There's different ways to do this.”
CPP Investments holds no preference for one construct over another, he added.
The Financial Post reported that Prime Minister Mark Carney announced a $25bn sovereign wealth fund in late April, called the Canada Strong Fund, to finance nation-building projects alongside private and international investors.
The federal budget and the April spring economic statement both referenced exploring new ownership options for federally owned airports, the Canadian Press reported.
CPP Investments and the Public Sector Pension Investment Board are co-hosting an investment conference with the federal government in September expected to draw some of the world's largest investors.
Graham said Canada has begun attracting renewed attention from major global allocators.
Graham said he has received more calls from investors expressing curiosity about Canada than at any point in his tenure at CPP Investments.
“Canada's coming back on the investing community's radar,” he said.
On fiscal 2026 results, CPP Investments reported net assets climbed to $793.3bn at March 31 from $714.4bn a year earlier, according to the fund.
The $78.9bn increase comprised $56.9bn in net income and $22bn in net transfers from the Canada Pension Plan.
The fund's 7.8 percent return trailed its benchmark portfolio's 13.2 percent, which CPP Investments attributed to the benchmark's heavier concentration in large-cap technology and AI-linked communication services companies.
Graham said diversification had not been rewarded in the short term but remained the prudent course.
“I think it's fair to say we struggle with the valuations in parts of the market,” he said, describing some stock market valuations as “astronomical compared to intrinsic value.”
On a 10-year basis, the fund outperformed its aggregated benchmark by 0.7 percent value add per year, net of costs, with a 10-year annualized net return of 8.8 percent.
Public equities, particularly in the US, drove performance, while energy and infrastructure contributed meaningfully, Graham said.
Foreign exchange losses driven by US dollar depreciation and bond losses as central bank rate expectations shifted partially offset those gains.
Graham said no major changes to bond strategy had been made despite inflation concerns.
“Longer-term inflation expectations have not become unanchored, and they still are in the target range,” he said.
At fiscal year-end, 36 percent of the fund was allocated to public equities, 22 percent to private equity, 20 percent to real assets including infrastructure and real estate, 13 percent to government bonds, and nine percent to credit.
The US accounted for 48 percent of assets, up from 47 percent a year earlier, with Canada steady at 12 percent.
