Canada Pension Plan Investment Board has put a portfolio of distressed Spanish loans up for sale, as the fund works to reduce its exposure to the country built up during the financial crisis last decade.
CPP Investments signage during an interview for an episode of Bloomberg Wealth with David Rubinstein in New York, US, on Wednesday, July 10, 2024. CPPIB, one of the largest investment firms globally, is seeing fewer opportunities to put money to work in emerging markets. Photographer: JEENAH MOON/Bloomberg --
The sale comprises loans with a face value of around €300 million in unsecured, non-performing loans, according to people familiar with the matter. Canada’s largest pension fund obtained the assets bundled along with a larger portfolio and they will likely be sold at a heavy discount to par, still generating returns, the people said, asking not to be identified discussing private details.
The Canadian pension fund previously acquired substantial debt assets, including real estate portfolios, from Spanish banks such as Banco Santander SA. While working down that exposure, the fund’s broader strategy involves nearly doubling the size of its private credit holdings over the next five years.
Earlier this year, CPPIB had explored the sale of a separate portfolio with a face value of around €1 billion although that process is now on hold, according to people familiar with the matter.The fund earned an 8% return in the fiscal year ended March, growing to $632 billion in assets from $570 billion a year earlier, as double-digit gains in stocks, credit and private equity made up for weaker performance in emerging markets and real estate. Its credit portfolio jumped 10.8%.
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