Private equity and currency gains help Fund post 9.3% return despite late-year market headwinds
Canada Pension Plan Investment Board (CPP Investments) ended its fiscal year on March 31, with net assets of $714.4bn, up from $632.3bn the previous year.
The $82.1bn rise was made up of $59.8bn in net income and $22.3bn in net transfers from the Canada Pension Plan (CPP).
CPP Investments reported a 9.3 percent net return for the year. Over a 10-year period, the Fund posted an annualized net return of 8.3 percent.
Since CPP Investments began managing the Fund in 1999, it has contributed $492.1bn in cumulative net income—around 70 percent of its current value.
President and CEO John Graham said the Fund saw strong performance across all investment departments.
“The Fund remains on solid financial footing and is well-positioned to deliver long-term value for current and future generations of Canadians,” he said.
On a calendar-year basis, the Fund returned 14.2 percent, reflecting a strong global equity market, despite a weaker final quarter. Investments in public equities, private equities, infrastructure and credit all contributed positively.
The Canadian dollar's depreciation against other currencies further supported performance.
Graham said the portfolio is built for long-term resilience and diversification.
“We’re positioning the Fund to deliver steady returns over the long term,” he said, adding that the strategy is meant to withstand periodic fluctuations.
Performance by Account
The base CPP account reported net assets of $655.8bn, an increase of $62bn from the prior year. It recorded $55.8bn in net income and $6.2bn in net transfers.
The base account earned a 9.3 percent net return for fiscal 2025, and an 8.4 percent 10-year annualized return.
The additional CPP account ended the year with $58.6bn in net assets, up from $38.5bn.
It generated $4bn in net income and $16.1bn in transfers, with a fiscal year return of 8.5 percent and a since-inception return of 6.1 percent.
Differences in market risk targets and funding profiles are expected to result in performance divergence from the base account, along with faster asset growth.
Long-Term Sustainability and Real Returns
The Chief Actuary of Canada reaffirmed in December 2022 that both the base and additional CPP accounts remain financially sustainable over 75 years based on contribution rates and projected real returns—3.69 percent for base CPP and 3.27 percent for additional CPP.
After accounting for inflation, fiscal 2025 real returns were 6.9 percent for base CPP and 6.0 percent for additional CPP.
Ten-year real returns for base CPP stood at 5.6 percent; since inception, the additional CPP posted a 2.7 percent real return.
New Benchmarks and Relative Returns
Fiscal 2025 marked a shift to benchmark portfolios as the standard for measuring relative performance, replacing prior market risk targets.
The new benchmarks better reflect the Fund’s diversified global strategy.
CPP Investments outperformed its 10-year benchmark by 1.4 percent, translating to billions in value-added returns.
However, in fiscal 2025, the Fund underperformed the benchmark portfolios’ 10.9 percent return by 1.6 percent, attributed to the benchmark’s higher exposure to surging global public equity indexes.
Asset Class and Geographic Performance
Five-year annualized returns by asset class included:
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Private Equities: 15.7 percent
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Public Equities: 11.3 percent
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Infrastructure: 8.1 percent
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Credit: 6.7 percent
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Real Estate: 0.5 percent
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Government Bonds: (1.2) percent
By geography, five-year returns were:
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Latin America: 8.2 percent
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United States: 9.6 percent
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Europe: 6.6 percent
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Asia Pacific: 6.2 percent
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Canada: 5.8 percent
Cost Management
To achieve $59.8bn in net income, CPP Investments incurred:
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$1.76bn in operating expenses
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$1.76bn in investment management fees
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$2.22bn in performance fees
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$730m in transaction costs
Operating expenses rose $139m due to inflation, compensation, foreign exchange and tech investments.
However, the operating expense ratio fell to 26.1 bps—below fiscal 2024’s 27.5 bps and the five-year average of 27.7 bps. Fee increases stemmed from asset growth and performance.
Corporate and Governance Updates
CPP Investments announced the closure of its San Francisco office following a review of its global operational footprint.
New senior leaders included:
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Caitlin Gubbels, global head of Private Equity
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Priti Singh, chief risk officer
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Heather Tobin, global head of Capital Markets and Factor Investing
Graham was appointed chair of FCLTGlobal’s board, a group CPP Investments co-founded in 2016.
Public Engagement and Debt Issuance
CPP Investments held in-person and virtual public meetings across Canada. It also added Cedar Leaf Capital—Canada’s first majority Indigenous-owned investment dealer—to its bond market syndicate.
Transaction Highlights
CPP Investments participated in over 100 transactions of $100m or more.
Notable public equity investments included stakes in Quebecor Inc., Teck Resources, Sabesp, First Solar and DSV A/S. It exited Delhivery and partially exited Viking Holdings.
Credit investments included a US$250m loan to CoreWeave and a $185m facility for Enfinity Global’s India solar and wind projects.
Private equity transactions included US$1bn for Novolex and US$180m in Nuvei’s take-private deal.
In real assets, CPP Investments completed a follow-on investment in NHIT and signed a US$15bn joint venture with Equinix and GIC.
It also committed to €500m for EQT Infrastructure VI and agreed to jointly acquire ALLETE, Inc. for US$6.2bn.
A sale agreement was reached for its 15.75 percent stake in Calpine Corporation, with expected proceeds of US$2.6bn.
Post-Year-End Developments
Subsequent transactions included:
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Investment in Australia’s Waste Services Group
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€275m investment in Sweden-based IFS
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Commitment to Rogers Communications’ new wireless infrastructure unit
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$1.2bn sale of North American and European limited partnership fund interests
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$135m to Pacific Equity Partners PE Fund VII
CPP Investments also increased its commitment to Radical Ventures and invested in team.blue, Ontic and others across Europe and Asia.
