CPP board appoints new Asian president, former Goldman Sachs executive

TORONTO – The Canada Pension Plan Investment Board has appointed a new president for its Asian division as the big pension fund manager expands its global footprint.

The board announced late Thursday that former Goldman Sachs executive Mark Machin will become president of CPPIB Asia Inc., effective March 19.

Machin spent 20 years at Goldman Sachs in various senior positions in London, Hong Kong and Beijing. Most recently, he led Goldman’s investment banking business in Asia, participating in many of the largest equity offerings and privatizations in the region.

Machin’s appointment “represents an important addition to CPPIB’s capabilities as a global investment organization,” president and CEO David Denison said in a release.

“There are compelling long-term growth opportunities in Asia, and Mark’s appointment demonstrates CPPIB’s commitment to investment in this geography.”

The pension fund manager has been diversifying its investments away from volatile stocks and low-yielding bonds to include real estate, infrastructure and other assets that can generate consistent returns to meet future pension payout obligations.

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It has put millions into a variety of investments and companies in Asia, where economies are booming and major investment opportunities loom.

In December, it injected another US$250 million into its 80 per cent owned warehousing joint venture, Goodman China Logistics Holding, saying the investments will be used to drive new growth opportunities in mainland China.

It is also focused on scooping up undervalued assets in the U.S. On Tuesday, the board made a $1.8-billion investment in shopping malls in the U.S. with a new joint venture agreement with the Westfield Group in its biggest real estate deal to date.

The pension manager will take a 45 per cent stake in the joint venture that will include interests in 10 regional malls and two redevelopment sites south of the border. Most of the properties are in California.

The deal will make the board one of the largest institutional investors in regional shopping centres in the U.S. with interests in 26 malls.

CPPIB invests money that isn’t required to pay for current retirement benefits under the federally administered CPP.

The investment fund’s performance is key to ensuring that future generations of Canadians have access to CPP payouts, even when the number of contributors declines in relation to pensioners.

Canada’s chief actuary has reviewed the fund’s health and affirmed that it remains sustainable at the current contribution rate of 9.9 per cent for at least 75 years.

Contributions are expected to exceed benefit payouts until 2021, when the CPPIB investments will help to fund pensions.