Why is the CPPIB investing in funds focusing on distressed U.S. mortgages?
CPPIB had no exposure to US sub-prime mortgages prior to the credit crisis in the summer of 2007. We chose to invest in distressed mortgages three to four months after the credit crisis struck. Given the steep decline in the US mortgage market, we committed a total of $750 million to two distressed mortgage funds run by very experienced fund managers, Pacific Investment Management Company (PIMCO) and BlackRock, Inc. We were able to exploit our advantages as a large, stable long-horizon fund to capitalize on these investment opportunities arising from the aftermath of the credit market upheavals that began in August 2007. Many assets are being priced below their intrinsic values because of an imbalance in supply and demand. As a long-term investor, we look beyond short-term market fluctuations. Our focus is on the performance over the long term. • Do you have any sub-prime mortgage investments? To be clear, CPPIB had no exposure to US sub-prime mortgages prior to the credit crisis in th
