Our Investment Strategy
The portfolio is structured to be resilient in the face of wide-ranging market and economic conditions. It covers all major asset classes, manages and mitigates significant risk factors, and encompasses multiple distinct investment strategies.
We firmly believe that organizations that manage environmental, social and governance factors effectively are more likely to endure and create more value over the long term than those that do not.
We believe that an active and adaptive approach to managing the portfolio is essential to preserving and growing assets in ever-changing capital markets – and in achieving greater returns over the long term.
Our Regional Operations
We adopt a truly global perspective as we invest across a wide range of asset classes. We seek the best possible investment opportunities wherever they may be.
Our Comparative Advantages
Our comparative advantages set us apart from our peers: our long horizon, scale, the certainty of our assets, strong culture, partnering capability and our Total Portfolio Approach to investing.
Total Portfolio Approach
The Total Fund Management (TFM) department focuses on long-term total portfolio design as well as ongoing implementation of the total portfolio investment framework.
Our Operating Framework
Our operating framework governs how we generate value with a long-term focus. It starts with our legislative mandate and cascades into how we set our appetite for risks and allocate capital and other resources in pursuit of investment returns.
It is a continuous process that allows us to learn from our experiences and adapt to an ever-changing investment landscape.
Our risk governance is formalized through the Fund’s Risk Policy. We seek to construct and manage a portfolio of investment strategies at our targeted overall levels of market risk and within our risk appetite for other key risk categories. This includes designing, executing, and managing a variety of distinct active strategies, while being cognizant that the Fund is being adequately compensated for the costs and risks we are taking on. We complete our investment portfolios through our balancing strategies, which allow us to both maintain and periodically rebalance the investment portfolios back to their targeted sets of diversified exposures.
On an ongoing basis, we systematically measure the value created by each key step in our investment decision-making process. This allows us to objectively evaluate the underlying drivers of our returns along with the risks and costs required to generate those returns. We believe this helps us better understand how value was generated from our past decisions and allows us to make better decisions in the future.
Our talent strategy is equally rigorous. We attract and retain diverse world-class talent, and we seek to provide competitive levels of compensation with a significant component related to investment performance at the total Fund, department and group levels. Our compensation framework is designed to align employee incentives to the delivery of our mandate and long-term strategy, while also considering our appetite for taking on different types of risks in our pursuit of value-add returns.
CPP Investments invests globally across a wide range of asset classes through our active and balancing strategies. Our balancing strategies provide liquidity, diversified exposures to global markets and enable rebalancing to our targeted exposures. They are highly scalable and can be managed at lower cost relative to our active strategies that seek to generate value-add returns from investment selection. Our active strategies leverage the full scope of our comparative advantages and investment skill to seek risk-adjusted returns above and beyond what can be obtained from investing in a public market index. Together, the Fund is designed and organized to deliver on our legislated mandate, to maximize returns without undue risk of loss over the long term, in the best interests of the CPP’s contributors and beneficiaries.