Strong returns drive CPP Investments' $24.5 billion quarterly growth, with private equity and credit leading gains
Canada Pension Plan Investment Board (CPP Investments) reported net assets of $699.6bn at the end of the third quarter on December 31, 2024, an increase from $675.1bn in the previous quarter.
The $24.5bn rise comprised $26.0bn in net income, offset by $1.5bn in net outflows from the Canada Pension Plan (CPP). Contributions exceeded benefit payments in the first part of the year but were surpassed by benefit payments in the final months.
The Fund, which includes base CPP and additional CPP accounts, delivered a 10-year annualized net return of 9.2 percent. The quarterly net return stood at 3.8 percent. Since its inception in 1999, CPP Investments has generated $487.7bn in cumulative net income for the Fund.
For the nine-month fiscal year-to-date period, the Fund increased by $67.2bn, consisting of $55.3bn in net income and $11.9bn in net transfers from CPP, achieving an 8.6 percent net return.
President and CEO John Graham stated, “Returns were strong this quarter, delivering $26bn in net income to the Fund. Our investment teams were very active with more than 40 transactions signed or closed in the last three months of the calendar year.”
He highlighted the organization’s resilience despite global uncertainty in early 2025.
CPP Investments reached $700bn in net assets five years ahead of projections by the Office of the Chief Actuary of Canada. The Fund’s actual assets exceeded initial assumptions partly due to strategic investment changes.
Q3 saw one of the highest quarterly increases, driven by private equity and credit investments, despite losses in fixed income assets caused by rising US Treasury yields. Depreciation of the Canadian dollar also affected results.
Base and Additional CPP Performance
The base CPP account closed the quarter with $646.2bn in net assets, up from $626.1bn in the previous quarter. The $20.1bn increase comprised $24.6bn in net income, offset by $4.5bn in net outflows.
The quarterly net return was 3.9 percent, while the five-year annualized return was 8.1 percent.
The additional CPP account reached $53.4bn in net assets, increasing from $49.0bn in the previous quarter. The $4.4bn growth included $1.4bn in net income and $3.0bn in net transfers.
The additional CPP account recorded a 2.8 percent quarterly net return and a 5.4 percent five-year annualized return.
Differences in contribution profiles and risk targets have resulted in distinct performance patterns between the two accounts since additional CPP’s inception in 2019.
Net Returns (Nominal and Real)
Net Nominal Returns (As of December 31, 2024)
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Base CPP: Five-year return of 8.1 percent, ten-year return of 9.3 percent
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Additional CPP: Five-year return of 5.4 percent, since inception return of 6.2 percent
Net Real Returns (After Inflation Impact)
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Base CPP: Five-year return of 4.6 percent, ten-year return of 6.5 percent
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Additional CPP: Five-year return of 1.9 percent, since inception return of 2.9 percent
Long-Term Financial Outlook
The Office of the Chief Actuary of Canada assesses the financial sustainability of CPP every three years. The December 2022 triennial review reaffirmed that both the base and additional CPP remain sustainable over the long term at legislated contribution rates.
Projections assume that the base CPP will achieve an average annual return of 3.69 percent above Canadian consumer price inflation over 75 years, while the additional CPP is expected to earn a 3.27 percent annual real return.
Investment Activity Highlights
CPP Investments engaged in multiple transactions across asset classes during the quarter. Key investments included:
Active Equities
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Invested €600m for a 1.3 percent stake in Denmark-based DSV A/S, supporting its acquisition of Schenker AG.
Credit Investments
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Invested US$175m in a mezzanine loan secured against the Fontainebleau Miami Beach.
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Invested SEK 1.2bn ($150m) in Open Infra, a fibre-to-home developer in Sweden and Germany.
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Committed US$300m in a first-lien term loan issued by Salamanca Infrastructure LLC.
Private Equity
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Invested €50m in Syclef, a European refrigeration and air conditioning firm.
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Acquired a 7 percent stake in Japan’s Alinamin Pharmaceutical for JPY 11.5bn ($105m).
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Invested US$180m alongside Advent in the take-private of Montreal-based Nuvei.
Real Assets
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Formed a UK single-family rental housing joint venture with Kennedy Wilson, committing £500m.
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Invested US$2.4bn in a joint venture with Equinix and GIC to develop data centres in the US.
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Signed an agreement to exit a 33.3 percent stake in the Goodman UK Partnership for £182m.
Corporate and Operational Developments
CPP Investments ranked second among 75 pension funds globally in the 2024 Global Pension Transparency Benchmark.
The organization also supported Canadian Sustainability Disclosure Standards and published research on AI and human capital through the CPP Investments Insights Institute.
The organization announced Cedar Leaf Capital’s addition to its Canadian Dollar bond market syndicate, making it the first majority Indigenous-owned investment dealer included in this group.
Post-Quarter Transactions
Following the quarter, CPP Investments finalized investments, including:
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US$517m in a multi-asset continuation vehicle with PSG Equity LLC.
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A US$750m joint venture with Bridge Industrial to invest in US industrial properties.
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A US$90m investment in Qlik alongside Thoma Bravo.
To view the full report, visit here.
