#Canada #Montreal #PSP Investments #Public Sector Pension

PSP Investments Achieves Impressive Returns in Fiscal 2025

The Public Sector Pension Investment Board (PSP Investments) has unveiled robust performance indicators for its fiscal year ending March 31, 2025. With a striking 12.6% net return for the year, it comfortably surpassed its one-year Reference Portfolio’s return by 1.5%.

Portfolio Highlights

PSP Investments’ success is largely attributed to the strong performances across multiple sectors, including Infrastructure, Private Equity, Public Market Equities, and Credit Investments. Foreign currency exposure has also played a significant role in enhancing these results, emphasizing the organization's focus on proactive asset management.

Notably, PSP has consistently managed to outperform both its five-year and ten-year benchmarks, leading to a growth of net assets under management (AUM) reaching $299.7 billion, which represents a 13.2% increase from the previous fiscal year. This growth was primarily driven by a $33.5 billion net income, role that captures investors' confidence.

Strong Organizational Capabilities

Deborah K. Orida, the President and CEO of PSP Investments, expressed pride in the team’s contribution to achieving these milestones, stating, "PSP Investments demonstrated significant organizational capabilities in delivering strong returns and showing resilience in uncertain times.” Her remarks underscore the strategic foresight embedded within the organization, highlighting their commitment to generating excess returns through careful asset allocation and management.

Long-term Success Metrics

To measure its overall success, PSP Investments employs several performance objectives. By the end of FY 2025, its 10-year net annualized return reached 8.2%, which translates to an impressive $31.9 billion in cumulative net investment gains beyond the Reference Portfolio. Such growth was accomplished while maintaining minimal pension funding risk.

The organization also tallied around 1.3% in outperformance per annum which reflects the added value generated through strategic asset distribution and active management decisions.

Furthermore, when compared with Total Fund benchmarks, PSP performed admirably, achieving a 10-year net annualized return of 8.2%, exceeding the benchmark return of 7.1%, and a five-year return of 10.6% against a benchmark of 9.1%.

Asset Class Performance

As of March 31, 2025, the breakdown of asset performance is notable:

• - Public Market Equities showcased a 15.1% return.
• - Fixed Income delivered a 10.5% return.
• - Private Equity yielded an outstanding 16.6% return.
• - Credit Investments saw a 15.4% return.
• - Real Estate, albeit lower, marked a 0% return this year.
• - Infrastructure continued its success with a 17.8% increase.
• - Natural Resources recorded a modest 8.6% return.
• - Finally, a complementary portfolio achieved a stellar 33.1% return.

These results emphasize a diversification strategy that aligns with market dynamics while safeguarding against volatility.

Cost Management Perspectives

As PSP Investments focuses on long-term growth, the management is equally vigilant in its cost assessments. For fiscal year 2025, operational, investment, and financing costs totaled $3.9 billion, maintaining consistency with the previous year despite an increase in assets under management. This disciplined cost management is crucial for ensuring long-term profitability and performance.

About PSP Investments

Established in 1999, PSP Investments is one of Canada's prominent pension investors, overseeing an extensive global portfolio that spans capital markets, private equity, real estate, infrastructure, and natural resources. As it navigates through ever-changing economic conditions, PSP continues to adapt its strategy, ensuring the provision of valuable retirement benefits to its stakeholders.

For further insights into its investment strategies and performance, PSP Investments invites interested parties to visit investpsp.com.