Canada's CPPIB pension fund concerned over rising protectionism

* CEO says investment strategy benefits from open markets

* CEO hopes for pragmatism in North America, Europe

* CEO hopes for more Canadian infrastructure opportunities

By Matt Scuffham

TORONTO, March 31 The Canada Pension Plan
Investment Board, one of the world’s biggest investors, is
concerned about the rise of protectionist trade policies, its
chief executive told business leaders in Toronto on Friday.

The CPPIB, which manages Canada’s national pension fund and
invests on behalf of 20 million Canadians, has become one of the
world’s biggest global infrastructure and real estate investors
as it seeks to diversify from public equity and fixed income
markets.

Chief Executive Mark Machin told the Toronto Region Board of
Trade that the pension fund had benefited from globalisation and
would suffer from policies that make international trade more
difficult.

“We worry about it,” Machin said. “Our investment strategy
benefits from open markets. Open markets for investment, open
markets for trade, open markets for people and impediments to
that are not helpful.”

U.S. President Donald Trump is planning to reform a trading
agreement between the United States, Mexico and Canada while
Britain has voted to leave the European Union and candidates
with sceptial views of free trade are running in elections in
France and Germany in 2017.

“You can understand some of the concerns that have led to
these policies. Not everybody has been a beneficiary of
globalisation,” said Machin. “Ultimately I hope that pragmatism
will reign in the end and we won’t see too profound an impact,
whether it’s in Europe or North America, of these policies.”

At the end of 2016, CPPIB had only 13 percent of its assets
of over C$300 billion ($226 billion) invested in Canada.

About 44 percent of the investments were in the United
States, with about 19 percent in Europe, around 19 percent in
the Asia-Pacifc, and about 5 percent in South America and other
regions.

Although CPPIB has grown to be one of the world’s biggest
infrastructure investors with assets worth C$27.6 billion, it
has a relatively modest stake in infrastructure projects in its
own country.

Machin said he hoped plans by Canada’s Liberal government to
set up an infrastructure bank to facilitate private financing
for projects could lead to opportunities to invest in more
large-scale projects in Canada.

“We’re hoping that the initiatives the federal government is
taking will lead to a better flow of sizeable opportunities,” he
said. “We focus on markets where there’s a consistent flow of
projects that are investable by institutional money. Canada’s
not had too many of those.”

($1 = 1.3296 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Richard Chang)