Direct Value Creation and Capture in the Pension Fund Industry: Five Examples

19 Pages Posted: 31 Oct 2023

See all articles by Sebastien Betermier

Sebastien Betermier

McGill University - Desautels Faculty of Management

Eduard van Gelderen CFA FRM

PSP Investments ; International School of Management (ISM) Paris

Barbara Zvan

University Pension Plan

Date Written: February 24, 2024

Abstract

How can pension funds create and capture value in financial markets? We study four landmark transactions made by large Canadian pension funds: OTPP's acquisition of Cadillac Fairview, PSP's development of Mahi Pono, CDPQ's development of Réseau Express Métropolitain, and CPP Investments's acquisition of Antares Capital. The funds create and capture value by achieving scale in strategic markets, reducing fee drag, coordinating stakeholder groups, and developing internal synergies. We identify the primary risks, discuss the risk mitigation strategies implemented by the funds, and then study how UPP, a smaller pension fund, emulates some of these strategies on a smaller scale.

Keywords: Pension Funds, Innovation, Long Term Value Creation

JEL Classification: G23

Suggested Citation

Betermier, Sebastien and van Gelderen, Eduard and Zvan, Barbara, Direct Value Creation and Capture in the Pension Fund Industry: Five Examples (February 24, 2024). Available at SSRN: https://ssrn.com/abstract=4616266 or http://dx.doi.org/10.2139/ssrn.4616266

Sebastien Betermier (Contact Author)

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Eduard Van Gelderen

PSP Investments

International School of Management (ISM) Paris ( email )

148, rue de Grenelle
Paris, 75007
France

Barbara Zvan

University Pension Plan ( email )

Toronto
Canada

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