How the CEO of the $243.7-billion PSP Investments pension fund is navigating tumultuous markets
DO: Positive returns in challenging markets are good. And I think what it really reflects is the diversity of our portfolio, the deep expertise of our investors and the global nature of our portfolio. Our strategy (has been)to diversify beyond public markets into private asset classes, some of which have performed very well this year, as well as to expand internationally. As a result we benefited from, for example, exposure to safe haven currencies like the U.S. dollar, which performed their expected role of mitigating some of the downside risks in challenging environments.
DO: Let me start with infrastructure. The one-year returns are spectacular at 19 per cent. But I think what’s more indicative is the ten-year performance at 11.7 per cent. I do think it’s an asset class that will continue to perform well in this market because it benefits from inflation protection and stability. So we continue to see a lot of interest from other investors in that market.
DO: The other one that I would talk about is natural resources. I think this is a pretty unique franchise that PSP has, with over 70 per cent of that portfolio based in agriculture, which gives us a diversified exposure that has served us very well this year and over the long term as well. We have built this business where we go out and we partner with families, we leverage their local expertise and their farming expertise to be able to build out their land base or accumulate more land and, in some cases, add post-farm processing capabilities that add to the value of the investment. It’s a unique franchise and it’s been performing well for us.
Inflation will be a bit more sticky than the market is anticipating and therefore rates will remain high
DO: Our private
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