“Our sole objective is to generate optimal returns with an acceptable level of risk.”

Maximilian Biagosch, Head of Europe at CPP Investments, presented the investment strategy pursued by Canada’s largest pension fund, which manages around CAD 650 billion (approx. USD 466 billion) in assets and aims to use the income it generates to create retirement security for around 22 million Canadians. He believes it is particularly important for the fund to be completely independent from government influence, so that it can focus solely on achieving optimal returns with an acceptable level of risk. This independence is guaranteed by a private, professional Board of Directors that does not have any politicians among its members.

The fund, which was originally fed by income from oil, gas and raw material extraction, has undergone a remarkable transformation from a passive index fund focused on Canadian government bonds in 1999 to an active fund aiming to steadily generate alpha from 2006 onwards. The fund profits from its long-term investment horizon and high level of planning reliability.

Biagosch has a noteworthy perspective on Europe, where the fund’s performance is above the global average. He attributes this to the “complexity premium” created by the variety of countries, languages, cultures and thus companies across the continent. CPPI sees the complexity that deters many investors as an opportunity, with Biagosch explaining that the fund’s global positioning with local branches worldwide allows it to react quickly and flexibly to changes in individual countries and regions. While Biagosch’s pure investment mandate means he does not follow any explicit ESG targets, he complies with the company’s own strict governance standards, which focus especially on portfolio resilience. The fund recognises that there is no such thing as a perfect portfolio and continually adapts to changing market conditions by harnessing cutting-edge technology. This combination of adaptability and long-term perspective makes CPP Investments a successful player in the global investment market, generating an average annual return of 9.2% over the last ten years.