The Public Sector Pension Investment Board (PSP Investments) generated a net portfolio return of 4.4 per cent for the fiscal year that ended March 31 despite “challenging” markets, with officials crediting a combination of private market investments, international expansion and currency exposure.
It was a “challenging year for both equities and fixed income” investments, said Deborah Orida, who took over as chief executive of PSP Investments on Sept. 1, 2022 after 13 years at the Canada Pension Plan Investment Board, where her roles included running CPPIB’s real assets department, encompassing infrastructure and real estate, and a six-year stint in Hong Kong.
Orida credited “forward thinking and smart execution” for the pension’s performance and said these attributes “will become even more important in the coming years.”
Eduard van Gelderen, PSP’s chief investment officer, said the decision to diversify into private markets and expand internationally provided stability amid the “exceptionally volatile financial markets” in 2023.
Foreign currency exposure, meanwhile, boosted returns as the euro and British pound rebounded, while open U.S. dollar exposure “played its expected role in mitigating the total fund’s downside risk.”
Fixed-income assets ended the year in positive territory, which PSP attributed mainly to “defensive positioning with a significant short duration bias amid the general bond market downturn caused by a global increase in interest rates.”
Credit investment performance, meanwhile, was boosted by higher interest spreads and upfront fee income growth in both credit investment and private equity portfolios.
