Annual Public Meeting

Transcription

1 Public Meeting Ottawa, November 27, By Cheryl Barker, Interim Chair of the Board Gordon J. Fyfe, President & CEO

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. Take advantage of large cash inflows. Facilitate investments in private, illiquid asset classes. Ability to capture illiquidity premium (higher returns). Better match to inflation driven liabilities reduces funding risk. Control timing of divestiture. Take advantage of size. Economies of scale. Internal management. 4

5 FY13 Highlights Total portfolio return of 10.7%. Investment income of $7.0 billion after expenses. Value added of $1.4 billion above benchmark return of 8.6%. Consolidated net assets of $76.1 billion. Four year: ized return of 12.2%; Investment income of $23.7 billion; Value added above benchmark of $3.7 billion. As at March 31,. 5

6 FY13 Financial Highlights Performance As at March 31, (%) Changes in Net Assets As at March 31, (billions $) Reserve Force Plan Account RCMP Plan Account Canadian Forces Plan Account Public Service Plan Account 6

7 Portfolio Performance $220 $210 $200 $190 $180 $170 $160 $150 $140 $130 $120 $110 $100 Comparison with the actuarial target Value of $100 invested ($CAD return) PSP Actuarial Target FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 $214 $180 As at March 31,. PSP Performance is net of fees. 7

8 Asset Mix by Investment Unit As at March 31, (%) Private Equity $6.9B 9.1% Infrastructure $3.9B 5.1% Renewable Resources $382M 0.5% Real Estate $9.4B 12.4% Public Markets $54.1B 71% 8

9 Geographic Diversification 50% 40% 42% 30% 28% 20% 10% 14% 9% 4% 2% 1% 0% Canada United States Europe Asia Mexico and South America Oceania Other As at March 31, 9

10 Top Ten Holdings at March 31, Public Market Equities Royal Bank of Canada Toronto Dominion Bank Bank of Nova Scotia Suncor Energy Canadian National Railway Bank of Montreal Enbridge BCE Canadian Natural Resources Ltd TransCanada Corp Total: $5.2B Private Market Investments Revera Telesat SCG CLP(Westin) Gassled Infragas Kinetic Concepts Inc. Bedford Funding I Transelec Charter Hall Office Trust TD Canada Trust Building H2O Total: $7.6B 10

11 All investment groups outperformed their respective benchmarks (Percentage %) PSP Benchmark PSP TOTAL Public Market Equities Public Market Fixed Income Real Estate Private Equity Infrastructure Renewable Resources 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. As at March 31,. 11

12 Public Markets Net assets of $54.1B. Return of 9.8% compared to benchmark return of 8.5%. Investment income of $4.7B. 65% of active strategies now managed internally. Portfolio and Benchmark Returns As at March 31, Asset Class Portfolio Returns % Benchmark Returns % Valueadded % World Equity Canadian Equity US Large Cap Equity EAFE Large Cap Equity Small Cap Equity Emerging Markets Equity Fixed Income Fixed Income World Inflation Linked Bonds Total All Public Markets Portfolios

13 Private Markets Notable Investments Real Estate: $3.1B of new investments, including 50 % of TD Canada Trust Tower Private Equity: joint purchase of London based Cooper Gay Swett & Crawford, one of the world s largest wholesale insurance and reinsurance brokerage companies Infrastructure: Isolux Infrastructure As at March 31, 13

14 Internal Active Management % Billion 70 68% $ $1.7B Internal Active Management ($B, right axis) Internal Active Management as a Percentage of Active Management (%, left axis) $3.8B $4.8B $5.9B $7.8B $7.9B $9.0B $18.4B $23.3B $29.1B FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 $35 $30 $25 $20 $15 $10 $5 $0 As at March 31,. 14

15 Cost Management Operating Expenses (M$) Cost Ratio and Operating Expenses (bps) FY09 FY10 FY11 FY12 FY13 10 FY09 FY10 FY11 FY12 FY13 Operating Expenses Operating Expenses Cost Ratio Cost Ratio = Operating Expenses + Transaction Costs + External Management Fees 1 1 Excludes performance fees. As at March 31,. 15

16 Preliminary Fiscal Year 2014 (As at September 30, ) 16

17 FY2014 First Six Months Investment return: 4.56% Net assets: $82.3 billion Investment income: $3.6 billion Contributions: $2.7 billion As at September 30,. 17

18 FY2014 First Six Months Performance of Major World Indices 20 Index Performance in CAD YTD (%) % S&P % MSCI EAFE +9.6% S&P % TSX Composite +0.7% JPM Bonds 1.6% MSCI Emerging 2.2% DEX Bonds Mar Apr May Jun Jul Aug Sep 13 18

19 FY2014 First Six Months (Percentage %) PSP TOTAL 4 Public Market Public Market Equities Fixed Income Real Estate Private Equity Infrastructure Renewable Resources 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. 19

20 QUESTIONS