The head of the Canada Pension Plan Investment Board, Canada’s biggest public pension fund, warned lawmakers not to interfere in its investment policies saying it should operate “at an arm’s length” from the government.
Canada’s Liberal government is looking for ways to attract private investors such as pension funds to invest in new infrastructure projects, having committed to spending $125 billion (US$93 billion) of public money over the next 10 years.
Speaking to Canada’s House of Commons Finance Committee on Tuesday, CPPIB’s Chief Executive Mark Machin said the fund would welcome more opportunities to make large-scale investments of more than $500 million in Canadian infrastructure, but cautioned that political pressure to invest would be unwelcome.
“The fact that we are accountable to government but kept at arm’s length when we’re making our professional judgments on investments is really important and something that we would hope would continue,” Machin told the committee. “To the extent that it crosses that line and a call was made that exerts undue pressure then that would not be a good thing.”
A Canadian government advisory group has recommended the creation of an infrastructure bank to enable private investment, recommending it looks to attract $4 of institutional equity capital for every government dollar invested.
“We’ll watch carefully how that unfolds and what comes from that,” said Machin. “Things that improve the pipeline of opportunities are good. The devil will be in the detail of how everything is implemented.”
(Reporting by Matt Scuffham; Editing by Chizu Nomiyama and Alan Crosby)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo of Mark Machin courtesy of Boao Forum for Asia