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CPPIB sees investment returns grow despite COVID-19 crisis – The Globe and Mail

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MARK BLINCH/Reuters

Canada Pension Plan Investment Board scored across-the-board investment gains in its most recent quarter, matching returns from a benchmark that it uses to evaluate its performance.

CPPIB, the investment manager for the Canada Pension Plan, reported a 5-per-cent return, after investment costs, for the three months ended Sept. 30. CPPIB’s “reference portfolio” of global stocks and bonds, which it says represents a passive approach to investing, returned just over 5 per cent in the quarter in Canadian dollars.

CPPIB’s broad blend of investments – including stocks, bonds, real estate, private equity and infrastructure – helped as stock markets crashed in February and March owing to fears of the economic impact of COVID-19. CPPIB posted a loss of just 3.7 per cent in the quarter ended March 31 as global stock markets saw losses of 20 per cent or more.

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When equities roared back to life in the June 30 quarter, however, CPPIB lagged badly with a 5.6-per-cent return – a dozen percentage points behind many major stock indexes. The results for the quarter ended Sept. 30, announced on Monday, erased the wild dichotomies.

CPPIB said the fund’s 10-year and five-year annualized returns, net of costs, are 10.5 per cent and 9.5 per cent, respectively. CPPIB closed the quarter with $456.7-billion in assets.

Chief executive Mark Machin cited gains in public and private equity holdings as contributing to the latest quarter’s returns, noting they were tempered when stock markets retracted in September. Mr. Machin said in a statement that CPPIB is “cautious about the months ahead given the highly uncertain economic fallout of COVID-19 and its effect on markets.”

Separately, CPPIB filed documents with U.S. securities regulators showing it cut its holdings in Shopify Inc. by 74 per cent, leaving it with 99,978 shares, valued at US$102-million, according to an analysis by Bloomberg. (All numbers in the filings are as of Sept. 30.)

The board also cut holdings in the pharmaceutical and health sector, with its Amgen Inc. position down 99 per cent to US$1.99-million, AbbVie Inc. down 60 per cent to US$90.1-million and Johnson & Johnson down 33 per cent to US$392.1-million.

CPPIB loaded up on shares of Netflix Inc., adding 625,621 shares to reach a total of 693,575 shares, valued at US$346.8-million. The board also added significantly to its holdings of Mastercard Inc., Amazon.com Inc. and Akamai Technologies Inc.

Its top holdings on U.S. exchanges are Alibaba (US$4.68-billion); Mastercard (US$1.79-billion) IHS Markit Ltd. (US$1.73-billion); Alphabet Inc. ($1.67-billion) and Facebook Inc. (US$1.15-billion). All told, Bloomberg said, CPPIB had US$53.1-billion of U.S.-listed public equities at Sept. 30.

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In CPPIB’s own recap of the quarter, it noted a US$50-million investment in Perfect Day Inc., an animal-free dairy maker, its first in its Climate Change Opportunities strategy. It said it has made a commitment to acquire up to US$1-billion of home improvement consumer loans from ECN Capital Corp. The board’s private equity group invested in information technology, software and education companies in the quarter.

CPPIB also noted it lost its investment in Neiman Marcus Group LTD LLC when the luxury retailer exited Chapter 11 proceedings in U.S. Bankruptcy Court, but continued to be a majority investor in Mytheresa GmbH, an online ultraluxury fashion retailer. Bloomberg reported last week that Mytheresa is exploring a U.S. initial public offering with a valuation of about US$1-billion to US$1.5-billion, which would blunt the Neiman Marcus losses.

CPPIB also said Monday that Frank Ieraci will become a senior managing director and its global head of active equities. He was previously head of research and portfolio strategy. He replaces Deborah Orida, who moved over to become global head of real assets earlier this year.

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Everton search for investment to complete 777 deal – BBC.com

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Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.

The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.

On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.

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BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.

Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.

It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.

The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.

777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.

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Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance

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Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.

One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.

Read Next: Warren Buffett: 6 Best Pieces of Money Advice for the Middle Class
Find Out: 5 Genius Things All Wealthy People Do With Their Money

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He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.

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Buffett’s Take on Bitcoin

Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.

“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.

“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.

Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.

For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon

Is Buffett Wrong About Bitcoin?

Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.

Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.

“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.

Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.

Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.

“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”

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This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?

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Ping An Profit Falls as Market Declines Hurt Investment Returns – BNN Bloomberg

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(Bloomberg) — Ping An Insurance (Group) Co.’s profit dropped 4.3% in the first quarter as stock-market declines and falling bond yields eroded investment returns. 

Net income fell to 36.7 billion yuan ($5 billion) in the three months ended March 31, from 38.4 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Tuesday. 

Operating profit, which strips out one-time items and short-term investment volatility, fell 3%.

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China’s stock market rout at the start of the year and lower bond yields have weighed on insurers’ investment returns. They hurt profit even as more customers seek to buy savings products. Co-Chief Executive Officer Michael Guo said last month that profitability will recover after a 23% drop in net income last year.  

“China’s macroeconomy gradually recovered in the first three months of 2024, but there were still challenges,” the company said in a statement, citing weak domestic demand.  “In response to volatile capital markets and declining treasury yields, Ping An continued to pursue long-term returns through cycles via value investing.”

Read More: Ping An Trust Wins First Court Ruling Over Delayed Trust Product

Net investment yield of insurance funds dropped to 3%, the statement said, down from 3.1% a year earlier. Real estate investments fell to 4.2% of the 4.9 trillion yuan portfolio, from 4.6% the year earlier.

The CSI 300 Index slumped as much 7.3% this year through the start of February, before government intervention fueled a rally. 

New business value, which gauges the profitability of new life policies sold, rose 21% in the first quarter. That followed a 36% jump last year as the company’s efforts to improve the productivity of life agents started to bear fruit. NBV per agent jumped 56% from a year earlier, the statement said. 

Ping An shares rose 3% to HK$33.00 in Hong Kong trading on Tuesday, trimming the year’s loss to 6.7%. 

(Updates with company comment in fifth paragraph, more details afterwards)

©2024 Bloomberg L.P.

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