The Public Sector Pension Investment Board (PSP Investments) has reported a 6.5% return in fiscal 2026, pushing net assets under management to $320.6 billion. While this is a solid performance, it falls short of the return of its reference portfolio, which is a benchmark for comparison. This underperformance is attributed to the heavy weighting of equities in the benchmark, which struggled in a year when public equities soared. However, PSP Investments has a long-term track record of outperforming its benchmark, with a 10-year history of double-digit returns in private credit and a 5-year return of -0.5% in real estate. The fund's investment in redeveloping the Downsview airport lands in Toronto's residential real estate market has had a significant impact on its performance. Private equity and credit also underperformed, with returns of 5.3% and 3.1% respectively, as they recalibrate from the post-pandemic period of 2021 and 2022. PSP Investments is well-positioned to add to its portfolio, with a focus on Canadian equities and infrastructure investments to hedge against inflation. The federal government's openness to asset recycling and privatization is seen as a positive development, with PSP Investments encouraged by the potential for more investment opportunities in Canada.
