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Royal Canadian Mounted Police
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PSPIB 2010 Annual Report
The Public Sector Pension Investment Board (PSP Investments) 2010
Annual Report is now available on our web site at http://www.investpsp.ca/en/financial-reports.asp. If you would like
to receive printed copies of our annual report, please let us know how
many copies you would like to receive by replying to this email.
PSP Investments recorded an investment return of 21.5% for the fiscal
year ended March 31, 2010 (fiscal year 2010), exceeding the Policy
Benchmark return of 19.8% by 1.7%. The 2010 performance is one of PSP
Investments' best performances to date and reflects a return to
fundamentals from the distressed valuations resulting from the liquidity
crisis of the past two years.
In fiscal year 2010, consolidated net assets increased by $12.5
billion, or 37%, to reach $46.3 billion, a new high which exceeds the
previous peak of $38.9 billion recorded at the end of March 2008. During
fiscal year 2010, PSP investments generated net income from operations
of $7.5 billion and received $5.0 billion in net contributions.
PSP Investments' 2010 results demonstrate the resilience of our
long-term investment strategy, which began in fiscal year 2004. At that
time, we identified the corporation's strongest competitive advantage to
be long-term liquidity provided from the large annual cash inflows
expected to continue beyond 2020. It allows PSP Investments to buy and
hold Private Equity, Real Estate and Infrastructure assets for the long
term, even during periods of extreme stress as we have just experienced.
Unlike other investors, we were not forced to sell high-quality assets
at the most distressed time.
The overall performance for fiscal year 2010 was driven primarily by
strong results in Public Market equities and the Private Equity
portfolio. Investment returns for the public equity portfolios ranged
from 20.1% for the US Large Cap Equity portfolio to 47.4% for the
Emerging Markets Equity portfolio, while the Private Equity portfolio
recorded an investment return of 28.8%. The Real Estate portfolio
recorded an investment return of 0.6% while the Infrastructure portfolio
achieved a 7.2% investment return for fiscal year 2010.
The asset mix as at March 31, 2010 was as follows: Canadian Equity
29.2%, Real-Return Assets 20.2%, Foreign Equity 19.8%, Nominal Fixed
Income 19.1% and Private Equity 11.7%.
We look forward to the TRIPAC meeting scheduled for October and where
we will provide more details on the 2010 performance as well as update
you on our fiscal year 2011 year-to-date results.
Sincerely,
Gordon J. Fyfe
President and Chief Executive Officer
PSP Investments