TORONTO – The influential president and CEO of the Canada Pension Plan Investment Board is retiring after seven years that have seen a near doubling of the fund that invests to pay future retirement benefits of 18 million Canadians.
The board announced Tuesday that David Denison will be replaced by Mark Wiseman, CPPIB’s current executive vice-president of investments when he retires June 30.
Denison, 59, advised the board of directors in 2009 of his intention to retire in 2012, triggering a long-term succession plan. He steps aside as headlines amass about a potential pension crisis in Canada, with some public funds facing shortfalls and workers who are not saving enough money for their own retirement.
Despite questions about the sustainability of some funds, Denison said no Canadian should be concerned that the CPP will not provide the promised benefits.
“I will eventually draw upon the Canada Pension Plan, not immediately, but I expect to get that monthly cheque throughout my remaining lifetime,” he said in an interview Tuesday.
The board said Denison has been critical to the pension fund’s investment success – growing assets from $81 billion when he took over in 2005 to $153 billion – but it believes Wiseman is the ideal choice to continue that culture.
“David Denison’s leadership has been exceptional in managing the assets of the CPP on behalf of 18 million Canadians while fostering a culture capable of undertaking the largest and most complex transactions in the world,” Robert Astley, chairman of CPPIB’s board of directors said in a statement.
“He has developed a talented team dedicated to CPPIB’s purpose while placing an uncompromising premium on integrity.”
When Denison took the reins from the board’s first president John MacNaughton, he launched the fund’s active investment strategy to grow the fund that will help pay out pensions even when payouts begin to outnumber contributions. Since the Investment Board’s creation in 1999, it had been primarily focused on passive investments in stocks and bonds.
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Denison said he projected in 2009 that the key mandate he was hired to achieve – defining a new strategy for the second stage of the organization’s evolution – would be accomplished by 2012.
“That was moving away from largely passive to a resolute commitment to active investment and expanding on all fronts,” he explained.
“If it wasn’t the ideal time (to retire), I clearly would have altered that… but I think it’s the perfect time to hand the leadership baton, as it were, to an outstanding colleague in Mark Wiseman.”
Under Denison’s direction, the Investment Board ramped up its investment in private equity, especially since the stock market catastrophe of 2008 battered the value of its public equity holdings.
CPPIB is gaining a reputation as one of the biggest dealmakers in the world, closing multibillion-dollar deals in areas like real estate, infrastructure and utilities all around the world.
The board credits Denison with making investments across diverse asset categories in both public and private markets, which have “significantly contributed to the fund’s growth.”
The performance of CPP investment fund – which invests the money not immediately required to pay pensioners – is key to ensuring that future generations of Canadian have access to CPP payouts, even when the number of contributors declines in relation to pensioners.
Denison has 33 years of experience in the financial services sector and has held senior positions in investment, consulting and mutual fund businesses in Canada, the U.S. and Europe.
He was president at Fidelity Investments Canada just prior to being appointed to the CPPIB.
Denison was born in Gander, Newfoundland and raised in Montreal. He graduated from the University of Toronto with degrees in math and education and was a teacher for six years before beginning his business career.
After he retires, Denison wants to explore the possibility of sitting on boards of directors to fulfil his interest in corporate governance, something he’s never been able to do as he worked on developing an investment strategy at the huge public pension plan.
“I think that’s largely in place now, and I don’t say that it’s finished business because it’s never finished, but we’ve made tremendous progress over the seven and a half years that I’ve been here.”
Denison said he was delighted at the board’s decision to choose Wiseman, who has been a public presence at the CPPIB and a frequent commenter on investment decisions.
“He has been an outstanding colleague and leader within CPPIB,” Denison said in a statement.
“I can think of no one better suited and able to lead this great institution through its next stage of growth and evolution.”
Wiseman, 41, is responsible for the fund’s global investment program.
He joined CPPIB in 2005 following a senior position at the Ontario Teachers’ Pension Plan. He has also been an officer at Harrowston Inc., a Canadian merchant bank, and as a lawyer with Sullivan & Cromwell, practising in New York and Paris.
Wiseman holds a BA from Queen’s University and a law degree and MBA from the University of Toronto.
“It is a distinct honour to have been selected to lead this institution and to succeed an extraordinary leader like David Denison,” said Wiseman.
“I look forward to taking the helm at a time when CPPIB is playing an increasingly important role globally, investing in order to ensure the long-term growth and sustainability of the CPP Reserve Fund.”
The sustainability of pension funds has been making headlines lately as the government tries to prepare for a looming pension crisis as baby boomers retire, drawing down funds in the system instead of contributing.
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.
The fund’s assets are expected to see substantial growth in the next half century _ projected to surpass $1 trillion by 2050, according to the Chief Actuary’s report.
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