CPPIB folds active equities into capital markets to form Active Public Markets

What changed and why

CPPIB said Tuesday it is combining its active equities operation with its capital markets group under a new banner: Active Public Markets. The team will deploy money across a wide set of public market assets, blending in house strategies with outside partners.

That pivot follows a rough stretch. Over the five years ended March 31, the active equities portfolio recorded a C$6 billion loss, or $4.2 billion, weighed by regulatory surprises in China. Pulling back from that market did not stem the damage. Losses reached C$3.5 billion in the most recent year as stock selection proved challenging.

Staffing and structure

As of March 31, the active equities arm had 120 employees. CPPIB expects most of them to move to the new department, though people familiar with the plan say the shake up will still mean dozens of layoffs, a development first reported by The Globe and Mail.

Heather Tobin will run Active Public Markets. Frank Ieraci, previously the global head of active equities, is leaving CPPIB.

CPPIB said the active equities book used long short positions and other approaches, with most exposure in the U.S. and Europe. Financials and industrials represented 39 percent of the total.

Smart investors continuously seek better tools to gain a reliable edge in markets. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.

Results and deal flow

Alongside the restructuring, CPPIB reported a 0.5 percent loss for the second quarter of its fiscal year, which closed on Sept. 30. Higher bond yields dragged down fixed income to a degree that exceeded the positive returns in equities, private equity, and real assets.

Total assets climbed to C$866 billion, up from C$864 billion as of the end of June. During the quarter, CPPIB committed $245 million in financing for a vehicle that backs a Chorus Capital-managed fund that invests in synthetic risk transfer transactions globally. It also closed the purchase of atNorth Holding AB with Equinix Inc. in a $4 billion transaction.

The private equity group disclosed 14 transactions - primarily commitments to funds - among them $300 million allocated to Brookfield Asset Management's hallmark private equity fund, as well as $700 million directed to a Clayton, Dubilier & Rice vehicle. The real assets arm made five fund commitments as well.

The bigger shift and why it matters

Stichting Pensioenfonds ABP, Europe's largest pension fund, is shuttering its active equities strategy following underwhelming performance. Ontario Teachers' Pension Plan said last year it would tilt toward passive equities over active stock picking.

Why does that matter? When large pools of capital change how they allocate to public markets, it influences which strategies attract funding and where liquidity grows. For your portfolio, this is another signal that institutions are mixing internal and external playbooks to seek scale and lower costs in listed markets.

Blending fresh strategies with disciplined analysis often helps investors stay more confident long term. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.