Report comes amid property crisis in emerging markets giant
Managing director Guy Fulton, based in Hong Kong, has left the Canadian Pension Plan Investment Board (CPP Investments) after 14 years with the fund.
Fulton manages CPP Investments’ Greater China real estate assets portfolio and was at the forefront of significant transactions in recent years, including the selling of stakes in six Raffles City Development in China in 2021. The sale resulted in net proceeds amounting to $800 million before closing adjustments.
In its recent annual report, the CPP Investments has reported it has $52 billion investments in real estate globally, including China, where CPP Investments holds 9.8% of its total assets. Fulton’s departure comes at a time of tense relations between Ottawa and Beijing amid fears over a property crisis looming in China.
With the ongoing tension between the US and Canada and China, pension funds have exhibited cautiousness on investments in the world’s second-largest economy. In May, Ontario Teachers’ Pension Plan and BCI reported pausing direct investments in China to reevaluate the risks. Other pension funds have focused on liquid public investments and index funds. However, no drastic actions have been taken to withdraw from opportunities in China.
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“It’s important to understand the biggest economies in the world,” John Graham, CEO of CPP Investments, told the AsianInvestor. “And the way to understand them is to spend time studying them and investing in them.”
In its 2023 annual report, CPP Investments cited the tension between Canada and China as a continuing risk to its portfolio. “US-China and Canada-China relations remain tense, and uncertainty surrounding China’s regulatory and policy environment could negatively impact our investments,” the report said.
A New York Times report said economists around the world have long urged Beijing to do more to support its consumer economy and to stop relying on growth built on speculative construction of apartment towers and heavy public investment in infrastructure. A report by the World Bank and a Chinese government research organization, China 2030, has warned about the possible diminishing of China’s economic growth unless the country embraces a “turning point in its development path.”
