OTTAWA: Canada’s largest pension is planning to roughly double the money it invests in hedge funds over the next five to seven years, a bullish signal from one of the industry’s most important backers.
The Canada Pension Plan Investment Board (CPPIB) plans to boost its total hedge fund allocation to about US$160bil in the coming years, according to people familiar with the matter.
It is particularly interested in gaining exposure to hedge fund giants it doesn’t currently invest with, including Izzy Englander’s Millennium Management, said the people, asking not to be named discussing internal deliberations.
The C$866bil (US$608bil) pension currently has about US$80bil invested in hedge funds, according to the people.
The expansion plans come as CPPIB expects its total assets to roughly double over the next seven years, and after hedge funds helped it outperform internal benchmarks in the last fiscal year.
External hedge fund investments were largely responsible for the US$3.4bil of net income generated by its Capital Markets and Factor Investing segment in the 12 months ended March, according to CPPIB’s annual report.
A representative for CPPIB declined to comment on its plans. — Bloomberg
