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Exclusive-Canada's biggest pension plan, CPPI, ends crypto investment pursuit -sources

Randy Mancini 4 December 7, 2022

By Divya Rajagopal

TORONTO (Reuters) – Canada’s biggest pension fund, CPP Investments, has ended its nearly year-long effort of studying investment opportunities in the volatile crypto market, two people familiar with the matter told Reuters.

The reasons behind CPPI’s abandonment of crypto research were not immediately clear. CPPI declined to comment but said it has made no direct investments in crypto. It referred to previous comments on cryptocurrency by its CEO, John Graham, in which he sounded a note of caution.

CPPI’s Alpha Generation Lab, which examines emerging investment trends, had formed a three-member team in early 2021 to research crypto currencies and blockchain-related businesses, with a view to taking potential exposure, the people added.

But CPPI abandoned the pursuit this year and redeployed the team to other areas, the sources said.

CPPI’s move also comes as two of Canada’s largest pension funds have written off their investments after the collapse of crypto exchange FTX and crypto lender Celsius this year.

Earlier this year CPPI CEO Graham said that the pension plan, which manages C$529 billion ($388 billion) for nearly 20 million Canadians, did not want to invest in crypto merely because of the fear of missing out.

“You want to really think about what the underlying intrinsic value is of some of these assets and build your portfolio accordingly,” Graham said in a June speech. “So I’d say crypto is something we continue to look at and try to understand, but we just haven’t really invested in it.”

It was unclear when CPPI dropped its plan. One of the sources said the team was actively assessing investment opportunities as late as July this year, but the second source said the team ended its work earlier than that.

The details of CPPI’s pursuit of cryptocurrency investment and its decision to end it have not been previously reported.

The sources declined to be identified because the information was not public.

Canadian pension funds’ exposure to crypto sector has come under scrutiny following the FTX debacle. While Canadian pension funds are not prohibited from buying cryptocurrencies, they are known for their risk-averse investing strategies to generate steady returns for pensioners.

($1 = 1.3650 Canadian dollars)

(Reporting by Divya Rajagopal in Toronto; Additional reporting by Maiya Keidan; Editing by Denny Thomas and Matthew Lewis)

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