CPP INVESTMENT BOARD REPORTS FISCAL THIRD QUARTER PERFORMANCE RESULTS Fund surpasses $200 billin milestne TORONTO, ON (February 14, 2014): The CPP Fund ended the third quarter f its 2014 fiscal year n December 31, 2013 with net assets f $201.5 billin, cmpared t $192.8 billin at the end f the previus quarter. The $8.7 billin increase in assets fr the quarter cmprised $11.1 billin in net investment incme, after perating csts, less $2.4 billin f cash utflws. The CPP Fund rutinely receives mre CPP cntributins than are required t pay benefits during the first part f the calendar year and then remits a prtin f thse funds fr benefit payments in the latter part f the year. The prtfli delivered a grss investment return f 5.9% fr the quarter. Fr the nine mnth fiscal year-t-date perid, the CPP Fund increased by $18.2 billin frm $183.3 billin at March 31, 2013. This includes $16.3 billin in net investment incme after perating csts and $1.9 billin in net CPP cntributins. The prtfli delivered a grss investment return f 8.9% fr this perid. The exceptinal perfrmance f public equities cntributed t the Fund s third quarter results. Majr equity indices attained all-time highs and all f ur investment prgrams delivered significant gains, prpelling the Fund past $200 billin fr the first time, said Mark Wiseman, President & Chief Executive Officer, CPP Investment Bard (CPPIB). With an investment hrizn that extends ver multiple generatins, we remain fcused n ur lng-term grwth plans rather than perfrmance during any particular quarter. It is with that fcus in mind that we cntinued t diversify the prtfli glbally with a number f ntable investments during the recent quarter carried ut in multiple markets. Early in 2014, we tk actin t further strengthen ur business platfrm, bradening ur glbal presence with the launch f new ffices in New Yrk and Sã Paul, said Mr. Wiseman. Investment highlights during the fiscal third quarter include: Private Investments Entered int an agreement t acquire the assets f Assinibia Farmland LP, which wns and manages a prtfli f 115,000 acres f farmland in Saskatchewan. CPPIB s initial equity investment is up t $128 millin, subject t final adjustments. The transactin clsed n January 10, 2014.
Purchased $60 millin f unsecured five-year ntes, carrying a 9% cupn rate, in Cequence Energy Inc., thrugh CPPIB Credit Investments Inc., a whlly-wned subsidiary f CPPIB. Headquartered in Calgary, Cequence Energy is a TSX-listed natural gas and il cmpany with assets primarily lcated in the Alberta Deep Basin, Peace River Arch and nrth-eastern British Clumbia. Cmpleted the acquisitin f luxury retailer Neiman Marcus Grup LTD Inc., alngside Ares Management, fr a purchase price f US$6.0 billin. CPPIB and Ares will hld an equal ecnmic interest in Neiman Marcus Grup, with the Cmpany s management retaining a minrity stake. Public Market Investments Acquired a 15% interest in ORPEA S.A., ne f Eurpe s leading prviders f lng-term care services, fr a ttal cnsideratin f 320.8 millin. CPPIB als made an additinal investment f 33.9 millin thrugh a primary share capital increase t help accelerate ORPEA s strategy fr internatinal grwth. Paris-based ORPEA has a unique netwrk f healthcare facilities with a ttal f 40,374 beds acrss 431 sites in France, Belgium, Spain, Italy and Switzerland. Real Estate Investments Successfully divested six reginal Canadian shpping centres fr a cmbined cnsideratin f $1.2 billin. The divestments supprt CPPIB s multi-phased Canadian retail strategy t pursue new pprtunities fr this prtfli with cre assets in primary markets held jintly with strng perating partners. Launched CPPIB s first real estate venture in India thrugh the frmatin f a strategic alliance with the Shaprji Pallnji Grup t acquire freign direct investment-cmpliant, stabilized ffice buildings in India s majr metrplitan centres. CPPIB will wn 80% f the venture with an initial equity cmmitment f US$200 millin. Frmed a discretinary venture with Banc BTG Pactual S.A. (BTG) t invest in residential develpment pprtunities in Brazil. CPPIB will invest up t US$240 millin fr a 40% interest in the venture and BTG has cmmitted t making an equal investment. Acquired Aldgate Huse, lcated in Lndn, U.K., a 214,000 square ft multi-let, high-quality ffice prperty fr 100 millin. The transactin represents the first acquisitin f the 50:50 ffice jint venture with Hermes Real Estate Investment Management Limited which was established in July 2013 t acquire high-quality ffice assets in prime Central Lndn lcatins. Entered int a jint partnership agreement with Intu Prperties plc t acquire Parque Principad Shpping Centre in Ovied, Asturias, Spain fr 162 millin. Parque Principad is ne f Spain s tp 10 prime retail destinatins and is the primary ut-f-twn centre fr the regin f Asturias. 2
Investment highlights fllwing the quarter end include: Acquired a 10.4% equity stake in Transprtadra de Gas del Perú S.A. (TgP) frm Graña y Mnter (GyM) fr a cnsideratin f US$200 millin. TgP is the largest transprter f natural gas and natural gas liquids in Peru, delivering apprximately 95% f the cuntry s ttal vlume f natural gas and natural gas liquids in 2012. Cmpleted several private debt and real estate investments thrugh CPPIB Credit Investments Inc., a whlly-wned subsidiary f CPPIB: Acquired a 23.8% interest in Altamira Asset Management (Altamira) representing an equity investment f 106 millin. Altamira is the market leading debt recvery and real estate servicing platfrm in Spain. Cmpleted an investment in Prts America t finance a new seven-year US$375 millin Hldc financing. Cncurrent with the transactin, CPPIB will wn a 10% equity stake in the Cmpany. Headquartered in New Jersey, Prts America is the largest independent marine terminal peratr and stevedre cmpany in the U.S. and currently perates in mre than 42 prts and 80 lcatins. Annunced a strategic alliance with Piramal Enterprises Limited (PEL), ne f India s largest diversified cmpanies, t prvide structured debt financing t residential prjects acrss India s majr urban centres. CPPIB and PEL have each initially cmmitted US$250 millin. Crprate Highlights Expanded CPPIB s glbal presence with the pening f new internatinal ffices in New Yrk City n January 16, 2014, and in Sã Paul, Brazil n February 4, 2014, which will serve as the hub ffice fr Latin America. CPPIB nw perates ffices in five key internatinal markets and the recent additins will allw it t expand its glbal capabilities and t facilitate access t the best investments frm acrss the glbe. Cntinued t further strengthen leadership f ur Trnt and glbal peratins. The fllwing executives assumed new rles: Benita Warmbld as Senir Vice-President & Chief Financial Officer; Nick Zelenczuk as Senir Vice-President & Chief Operatins Officer; Mark Machin as Senir Vice-President & Head f Internatinal; Ed Cass as Senir Vice-President & Chief Investment Strategist; and Alain Carrier as Managing Directr & Head f Eurpe. 3
Welcmed the appintment by the Federal Minister f Finance f Ms. Kathleen Taylr t the Bard f Directrs n Octber 3, 2013. Ms. Taylr currently serves as Chair f the Bard f the Ryal Bank f Canada and was mst recently the President and Chief Executive Officer f Fur Seasns Htels and Resrts. Lng-Term Sustainability In the recent triennial review released in December 2013, the Chief Actuary f Canada reaffirmed that the CPP remains sustainable at the current cntributin rate f 9.9% thrughut the 75-year perid f his reprt. The Chief Actuary s prjectins are based n the assumptin that the Fund will attain a 4% real rate f return, which takes int accunt the impact f inflatin. CPPIB s 10-year annualized nminal rate f return f 6.7%, r 4.9% n a real rate f return basis, is abve the Chief Actuary s prspective 4% real rate f return assumptin. These figures are reprted n a net basis t be cnsistent with the Chief Actuary s apprach. The recent Chief Actuary s reprt als extended the timeframe in which CPP cntributins are expected t exceed paid annual benefits t 2022, thereafter a prtin f the investment incme frm CPPIB will be needed t help pay pensins. Asset Mix Fr the perid ending December 31, 2013 ($ billins) $ % Equities Public 64.7 32.1 Private 36.4 18.1 101.1 50.2 Fixed Incme 67.1 33.3 (includes bnds, mney market securities, ther debt and debt financing liabilities) Real Assets Real Estate 21.9 10.9 Infrastructure 11.3 5.6 33.2 16.5 Ttal 1 201.4 100.0 1 Excludes nn-investment assets such as premises and equipment and nn-investment liabilities. 4
Five and 10-Year Returns 1 (fr the perid ending December 31, 2013) Investment Rate f Return (Nminal) 5-Year Annualized 10-Year Annualized 1 After CPPIB perating csts. 2 Dllar figures are cumulative. Investment Rate f Return (Real) Investment Incme 2 8.9% 7.2% $67.1 billin 6.7% 4.9% $83.5 billin Nte: All figures in Canadian dllars unless therwise nted. Abut CPP Investment Bard CPP Investment Bard (CPPIB) is a prfessinal investment management rganizatin that invests the funds nt needed by the Canada Pensin Plan (CPP) t pay current benefits n behalf f 18 millin Canadian cntributrs and beneficiaries. In rder t build a diversified prtfli f CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed incme instruments. Headquartered in Trnt, with ffices in Lndn, Hng Kng, New Yrk City and Sã Paul, CPPIB is gverned and managed independently f the Canada Pensin Plan and at arm's length frm gvernments. At December 31, 2013, the CPP Fund ttalled $201.5 billin. Fr mre infrmatin abut CPPIB, please visit www.cppib.cm. Fr Mre Infrmatin Linda Sims Directr, Media Relatins (416) 868-8695 lsims@cppib.cm 5