Public Sector Pension Investment Board, Montreal, returned a net 10.9% on its investments in the fiscal year ended March 31, according to its annual report released Thursday.
Net assets grew by 12.7% over the year to C$230.5 billion ($184.7 billion) as of March 31, the annual report said.
The return exceeded PSP Investments’ total fund benchmark return of 9.4% for the yearly period.
For the five- and 10-year periods, PSP Investments delivered net annualized returns of 9% and 9.8%, respectively, the annual report said. These figures compared with benchmark returns of 7.9% and 8.6%, respectively.
The pension fund returned a net 18.4% in the previous fiscal year.
By asset class, the top performer for fiscal year 2022 was private equity, which surged 27.6%, topping its benchmark return of 19.5%.
That was followed by real estate (24.8% return), the complementary portfolio (16.9%), natural resources (15.9%) and infrastructure (13.9%).
However, the real estate, natural resources and infrastructure segments all lagged their respective benchmark returns of 30.2%, 26.3% and 16.1%.
The complementary portfolio consists of, among other things, securities in health care, technology, and other “disruptive industries,” the annual report said. The complementary portfolio outperformed its benchmark return of 3.7%.
The two worst-performing assets classes were nonetheless up for the year: credit investments (7.5%) and capital markets (3%). The corresponding benchmark returns for these two asset classes were -0.5% and 1.3%, respectively.
Capital markets comprises public market equities and fixed income, the annual report said.
As of March 31, the pension fund’s allocation was 43.4% capital markets, 15.3% private equity, 13.5% real estate, 10.2% infrastructure, 9.5% credit investments, 5% natural resources and 0.6% complementary portfolio.
Separately, PSP Investments in a news release reiterated its commitment to fighting climate change. In April, PSP Investments unveiled a new climate change strategy designed to reduce greenhouse gas emissions across its investment portfolio as part of an effort to transition to global net-zero emissions by 2050. Under that strategy, PSP Investments said it expects to cut portfolio greenhouse gas emissions by 20% to 25% by 2026, relative to a September 2021 baseline.
“In the wake of the pandemic, PSP Investments delivered solid, above-benchmark performance,” said Neil Cunningham, president and CEO, in the news release. “We did so at the same time as raising our climate ambition by developing our first climate strategy and a bespoke green asset taxonomy. These actions enable us to use our capital and influence to support the transition to global net-zero greenhouse gas emissions by 2050.”