"Maple Revolutionaries" - Canada's Pension Fund Giants
Canada's Top 10 Pension Funds based on holdings.
Canada's Top 10 Pension Funds collectively manage over $1.1 Trillion and rank as some of the largest in the world. They have created a model for investment management that has become a template and inspiration to public funds on a global scale.
It may be shocking to some the scale and reach of our Canadian Pension Funds. These funds own assets around the world, including over $600 Billion invested in varying asset classes across Canada. In fact, of the top 100 largest funds based on holdings, Canadian Pension funds occupy eight spots, and of the top 20 positions, they occupy three! Not only have they gained notoriety due to their impressive returns ("the Top Ten’s assets under management have tripled since 2003 with investment returns driving 80% of the increase", CPPIB), but also for the investment structure that they have created.
Canadian Pension Funds have internalized their fund operations and invest directly in order to avoid hefty management fees to pricey external managers. Additionally, they attract executives with finance and business backgrounds, as opposed to political or union backgrounds as is prevalent in the United States fund model. This, combined with competitive compensation packages, has created an environment of high expectations and outcomes within the Canadian funds.
Having little political governance has also allowed funds to modify the investments that they go after in order to diversify the portfolio and look at the long-range returns. Namely, this has resulted in the funds becoming key players in real estate and infrastructure investment ("Of the top 30 global real estate investors among pension funds, five are Canadian funds", RENX). Some well known real estate developers and operators that are owned by the Top Canadian Funds include:
- Ivanhoe Cambridge (owned by the Caisse de dépôt et placement du Québec);
- Cadillac Fairview (owned by the Ontario Teacher's Pension Plan); and
- Oxford Properties Group (owned by OMERS).
Nicknamed the Maple Revolutionaries in an Economist article published in 2012, and investigated in a study conducted by Boston Consulting Group (BCG) in 2015, the Canadian Pension Funds have garnered an international reputation that many are beginning to emulate. As of December 2015, the "Top 10" Canadian Pension Funds holdings were as follows:
- The Canada Pension Plan Investment Board ($265 billion);
- The Caisse de dépôt et placement du Québec ($192 billion);
- The Ontario Teachers’ Pension Plan Board ($154 billion);
- PSP Investments ($112 billion);
- The British Columbia Investment Management Corporation ($104 billion);
- The Ontario Municipal Employees Retirement System ($73 billion);
- The Healthcare of Ontario Pension Plan ($61 billion);
- The Alberta Investment Management Corp. ($50 billion);
- The Ontario Pension Board ($22 billion);
- The OPSEU Pension Trust ($18 billion).
For an overview of the key points from the BCG study, please click on the button below.