Canada Pension Looks to Quadruple Asia Investments

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The Canada Pension Plan Investment Board is looking to quadruple its investments in Asia Pacific, a plan official told the Wall Street Journal on Wednesday.

CPPIB chief Mark Wiseman said market turmoil in China has opened the doors for many investment opportunities for long-term investors, and CPPIB plans to take advantage.

He told the Wall Street Journal:

CPP Investment Board head Mark Wiseman said China’s recent stock slump has made the region more attractive to long-term investors, and could be the catalyst for a wave of deals by the 268.6 billion Canadian dollar (US$203.1 billion) fund in areas such as logistics, warehousing, retail real estate and private equity buyouts.

“When you get volatility and certain investors are forced to be sellers, that hot money flows out of a country like China, and that’s when we can buy high-quality assets,” Mr. Wiseman said in an interview Wednesday.

[…]

Mr. Wiseman said CPPIB has a chance to diversify into other countries in the region as more quality assets become available with Asia’s markets cooling as China’s growth slows.

“Lots of other investors are getting out of Asia—we’re steadfast,” he said. “I could foresee in the next decade, easily, the number of dollars invested in Asia Pacific (by CPPIB) quadrupling.”

He said high-quality assets that weren’t available to the fund two years ago may soon become available. Higher U.S. interest rates could place further stress on Asian markets, leading to increased volatility in financial markets and forced asset sales—and more opportunities for CPPIB.

“For a long-term investor like CPPIB volatile periods are often periods that generate more investment opportunities for us.”

CPPIB’s deal making has already started. Early this month, the pension fund bought a big stake in South Korean supermarket chain HomePlus.

 

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