As the US gets riskier for investors, this major player wants to go shopping north of the border
After years of building a global investment platform, the Public Sector Pension Investment Board is beginning to shift its gaze inward, marking a strategic turn toward the Canadian market as geopolitical risk and volatility across the U.S. force a reassessment of long-held allocation priorities.
According to their annual report, released Friday, the Montréal-based pension fund manager, which oversees nearly C$300 billion in assets, posted a 12.6 per cent return for the fiscal year ended 31 March—driven by strong gains in infrastructure and public equities. Yet beneath that headline figure, a deeper story is unfolding: a pivot to home territory.
“We’re focusing efforts on finding good investments in Canada,” said Deborah Orida, chief executive of PSP Investments, speaking at the release of the fund’s latest annual report. The most prominent example of this redirection is PSP’s recent acquisition of a 7.5 per cent stake in the 407 Express Toll Route, a major arterial highway traversing the Greater Toronto Area. The transaction, valued at more than C$2.4 billion including deferred payments, is the fund’s largest-ever Canadian investment.
For much of the past two decades, PSP has expanded globally, amassing holdings in private equity, infrastructure, and credit across Europe, the United States, and Asia. As of March, 41 per cent of PSP’s portfolio remained allocated to U.S. assets—double its exposure to Canada. But mounting uncertainty south of the border has prompted a reassessment of that weighting.
U.S. political dynamics—marked most recently by tariff shocks and proposed legislative changes targeting foreign pension investors—have injected fresh volatility into a market once viewed as stable ground. “The world has changed,” Ms Orida said, referring to the growing complexity in managing risk across key developed markets.
The proposed U.S. “One Big Beautiful Bill,” which includes the removal of tax exemptions for foreign government-backed investors, could significantly impact Canadian pension plans with American holdings. PSP has already modelled the implications, concluding that while manageable, such policy shifts would influence future underwriting.
“I think the bigger impact would probably be on how much we want to incorporate it into our underwriting for future investments,” said Ms Orida. The legislation, still under Senate debate, has added new urgency to PSP’s rebalancing strategy.
Infrastructure remains one of PSP’s strongest-performing areas, returning 17.8 per cent over the fiscal year. The fund has built out what it describes as platform-based investments, often taking operating roles in sectors like data centres and transportation. Last year, PSP’s infrastructure activity reached C$17.1 billion in combined commitments and exits.
One example is the acquisition of AGS Airports in the United Kingdom—covering Aberdeen, Glasgow, and Southampton—in a transaction that saw 22 per cent of the stake later sold to Blackstone Inc. for £235 million. “It wasn’t us trying to get into a Blackstone deal,” Ms Orida noted. “It was Blackstone trying to get into one of our deals.”
The overall portfolio also benefited from currency movements, particularly the depreciation of the Canadian dollar, which boosted the value of foreign-denominated assets. Currency effects contributed nearly half—5.8 percentage points—of the fund’s annual return.
Still, not all sectors delivered. The real estate portfolio, affected by valuation markdowns, yielded no net return for the year. However, the fund sees signs of stabilisation in traditional office properties, which have been under pressure since the pandemic.
Internally, PSP is shoring up leadership to navigate what it calls an “increasingly complex global investment landscape.” The fund recently appointed Caroline Vermette as Chief Financial Officer and Alexandre Roy as Chief Risk Officer. Both executives bring deep experience in financial oversight and institutional risk management, reinforcing PSP’s ability to withstand turbulent conditions and deliver on long-term mandates.
The question now facing PSP is how far to reorient toward domestic opportunities, a matter Ms Orida frames with a familiar metaphor: “Have we been underleveraging our home-ice advantage?”
With strong internal returns, renewed strategic focus, and heightened external pressures, the answer may soon be tested. PSP’s pivot, while partly reactive to foreign risk, is also a calculated recognition of the value found closer to home.
