Annual Public Meeting

Transcription

1 Annual Public Meeting Ottawa, November 21, 2012 By Cheryl Barker, Interim Chair of the Board Gordon J. Fyfe, President & CEO 1

2 Cheryl Barker Interim Chair, Board of Directors 2

3 Gordon J. Fyfe President and CEO 3

4 Long term Investment Strategy Diversification strategy began in FY2004. Strongest competitive advantages: large cash inflows and size. Ability to invest in illiquid assets like Private Equity, Real Estate, Infrastructure and Renewable Resources. Not forced to sell assets control timing of exits. 4

5 FY2012 Highlights Net assets increased by $6.5 billion or 11% to $64.5 billion. Net income of $1.7 billion. 3.0% return Benchmark return of 1.6%. Value added of $850 million. Proportion of Private Markets increased from 22.8% to 27.0%. Renewable Resources added to Policy Portfolio. 5

6 Financial Highlights 26.1 Annual Performance As at March 31, 2012 (%) Changes in Net Assets As at March 31, 2012 (billions $)

7 Proportion of Benefits Funded Through Investment Returns Accumulated Net Contributions (In billions $) Accumulated Return % % % % % % % 44% % 50 25% 10% 17% Based on historical and projected funding measures up to March 31, Contribution projections from 2017 are from the latest actuarial valuations. 7

8 Strong Three Year Investment Performance 25 PSP Benchmark Annualized return: 12.7% vs. benchmark: 11.1% % 19.8% Investment income: $16.5 billion % 12.7% Value added: $2.4 billion % 1.6%

9 Diversification Strategy Performance (Nine Year) Value of $100 invested ($CAD return) $194 $171 As at March 31, Performance is net of fees. 9

10 Diversification Strategy Performance (Nine Year) Value of $100 invested ($CAD return) $194 $186 $171 As at March 31, Performance is net of fees. 10

11 Asset Mix by Investment Unit As at March 31, 2012 (%) $6.4B 10.0% $7.1B 10.9% $3.6B 5.6% $1.6B 2.5% $0.3B 0.5% $45.5B 70.5% Public Markets Real Estate Private Equity Infrastructure Cash & Cash Equivalents Renewable Resources 11

12 Geographic Diversification % Canada 27.6% United States 15.5% 9.1% 3.2% Europe Asia Mexico and South America 0.2% Other As at March 31,

13 Top Ten Equity Holdings Public Market Equities Royal Bank of Canada Toronto Dominion Bank/The Bank of Nova Scotia Suncor Energy Inc Barrick Gold Corp Potash Corp of Saskatchewan Inc Canadian Natural Resources Ltd Canadian National Railway Co Goldcorp Inc BCE Inc Total: $3.8 B Private Markets Direct Investments Revera Inc Telesat Holdings SCG Hotel CLP, LP Infragas Norge AS Transelec DP World Australia TimberWest Forest Corp Star SDL Investment Co. Sàrl ACH Limited Partnership Kinetic Concepts Inc Total: $6.9 B 13

14 FY2012 Performance by Asset Class Public Equity: Canadian Eq., U.S. Large Cap Eq., EAFE Eq., Emerging Eq., Small Cap Eq. Public Fixed Income: Domestic Bonds, Global bond, Real Return bonds 14

15 Public Markets Asset Class World Equity Portfolio and Benchmark Returns As at March 31, 2012 Portfolio Returns % Benchmark Returns % Value Added Canadian Equity US Large Cap Equity EAFE Large Cap Equity Small Cap Developed World Equity Emerging Markets Equity Fixed Income Fixed Income World Inflation Linked Bonds

16 FY2012 Investment Highlights Net increase of $4.2 billion in Private Markets. 30 direct investments in Real Estate $1.5 billion in additional Infrastructure investments highest annual amount Private Equity group acquired Kinetic Concepts Inc. in partnership with Apax Partners and CPPIB. 16

17 Growth in Active Management (In billions $) Active / Passive FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Active Passive As at March 31,

18 Growth in Internal Management Internal / External 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Internal External As at March 31,

19 Growth in Internal Management (In billions $) Internal / External FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Internal External As at March 31,

20 Assets and Expenses +$30.7 billion (91%) (In billions $) +$37 million (11.5%) (In millions $) Assets under management Operating and asset management expenses As at March 31,

21 Vision 2015 Strategic Plan Goal 1 Policy Portfolio Focus: Position Policy Portfolio for change Work with Sponsor Risk Management 21

22 Vision 2015 Strategic Plan Goal 2 Active Management Focus: Increase active management to add value. Increase internal management: Alignment Cost Culture Expand team expertise. 22

23 Vision 2015 Strategic Plan Goal 3 Operations Focus: Scalability Efficiency Value added support 23

24 Vision 2015 Strategic Plan Goal 4 Talent Focus: Talent development Leadership 24

25 Preliminary Fiscal Year 2013 Results (As at September 30, 2012) 25

26 FY2013 First Six Months Investment return of 2.1%. Driven mainly by performance of private asset classes. Public equity portfolios impacted by weak performance of global markets. Net assets of $68.1 billion. Including contributions of $2.3 billion. 26

27 FY2013 First Six Months Performance of Major World Indices The performance of the indices are calculated in Canadian dollars. 27

28 FY2013 First Six Months Public Equity: Canadian Eq., U.S. Large Cap Eq., EAFE Eq., Emerging Eq., Small Cap Eq. Public Fixed Income: Domestic Bonds, Global bond, Real Return bonds 28

29 QUESTIONS 29