CPPIB reduces Spanish exposure with a €300m loan sale, shifting focus to expanding private credit holdings
Canada Pension Plan Investment Board (CPPIB) is in the process of selling a portfolio of distressed Spanish loans, according to a report by BNN Bloomberg.
The sale is part of CPPIB's efforts to reduce its exposure to Spain, which was significantly increased during the financial crisis of the previous decade.
The portfolio being offered consists of unsecured, non-performing loans with a face value of approximately €300m (US$329m), according to sources familiar with the situation.
These loans were originally acquired as part of a larger portfolio and are expected to be sold at a significant discount to their face value, yet still generating returns. The individuals familiar with the matter requested anonymity due to the private nature of the details.
In the past, CPPIB purchased substantial debt assets from Spanish banks, including real estate portfolios from institutions such as Banco Santander SA. While the fund is currently reducing its exposure to these assets, its broader strategy includes nearly doubling its private credit holdings over the next five years.
Earlier this year, CPPIB also considered selling a different portfolio with a face value of around €1bn, though that sale process has been paused, according to sources familiar with the situation.
When asked for a comment on the potential sale, CPPIB declined to provide any details.
In the fiscal year ended March, CPPIB achieved an 8 percent return, increasing its assets to $632bn (US$460bn) from $570bn the previous year.
The fund's credit portfolio saw a 10.8 percent growth, compensating for weaker performance in emerging markets and real estate, with significant gains in stocks, credit, and private equity.
