Canada’s US$277 billion pension fund may open its first office in China to seek greater exposure to world’s No. 2 economy

Canada Pension Plan Investment Board, which manages around C$368.5 billion (US$277 billion), is considering opening its first office in China as it seeks greater exposure to the world’s second-largest economy.

Canada’s largest pension fund investor could open an office in Beijing as soon as next year, Hong Kong-based head of Asia-Pacific Suyi Kim said in an interview this month. Staff there would then work closely with CPPIB’s 130 employees in Hong Kong, which have helped to invest C$42 billion in Greater China so far, she said.

“As we’re also growing our portfolio in China, which is around 10 per cent of our total fund, it makes a lot of sense for us to consider expanding our footprint there,” said Kim, adding that one of the firm’s key investment themes is China’s rising middle class and its burgeoning consumer consumption story.

CPPIB has already invested US$4 billion in a China logistics venture with Australia’s Goodman Group as e-commerce rises, creating the need for more large-scale storage facilities. It also owns shares in South China Morning Post’s owner Alibaba Group Holding, Meituan Dianping, Midea Group and Tencent Holdings, plus it has invested in funds run by Citic Capital, FountainVest and Hillhouse Capital.

CPPIB can invest in those private-equity firms’ buyout funds, giving it the opportunity to look at deals alongside them, or make direct investments in its own right, Kim said.

Kim, 46, who built CPPIB’s Hong Kong office from scratch, is “mindful” of the growing competition from buyout firms and deep-pocketed tech companies in pursuing deals. “Having a lot of capital isn’t our competitive advantage here, our competitive advantage is having high quality talent and strong partnerships,“ she said.