Canada Pension Plan Plans to Double Hedge Fund Investments

Canada's biggest pension fund wants to double the money it puts into hedge funds over the next five to seven years. The Canada Pension Plan Investment Board aims to raise its total hedge fund amount to about $160 billion. Right now, the pension has about $80 billion in hedge funds, out of total assets worth $608 billion.

Partners and Returns

The fund wants to work with major hedge fund groups that it does not currently use, including Millennium Management led by Izzy Englander. External hedge fund investments helped bring in $3.4 billion of net income for the Capital Markets and Factor Investing division in the 12 months ending in March. Heather Tobin heads the CPPIB unit that picks these funds. She stated that volatile markets and higher interest rates create a very good setup for skilled managers. Her team currently invests money across more than 60 fund managers. These include Two Sigma Investments, Bridgewater Associates, ExodusPoint Capital Management, Rokos Capital Management, Magnetar Capital, Samlyn Capital led by Rob Pohly, and Arini Capital Management led by Hamza Lemssouguer. Specific strategies that helped drive these gains include quant equity, global macro, multistrategy, fundamental equity, and fixed income.

Context

This expansion plan arrives while many parts of the hedge fund industry face challenges from volatile markets and recent losses. Large institutional pension funds manage retirement savings for millions of workers by spreading money across many different types of assets all over the world.