UPDATE 1-CPPIB return drops slightly on equity, fixed income declines

(Adds comments from CEO, paragraphs 5-10)
TORONTO, Aug 14 (Reuters) - The Canada Pension Plan
Investment Board, one of the world's biggest dealmakers,
reported a small quarterly investment loss as declines in equity
and fixed income markets offset gains in other investments.
The manager of Canada's public pension fund said net assets
were C$268.6 billion ($205.59 billion) as of June 30, that was
up from C$264.6 billion as of March 31, but the increase was on
the back of pension inflows and not investment gains the period.
Net contributions boosted the fund by C$4.2 billion during
the first quarter ended on June 30, while the net investment
loss was C$200 million.
The portfolio's gross investment return was flat for the
quarter, or down 0.1 percent on a net basis. Net returns exclude
contributions and the fund's costs.
Despite the recent tumultuous market conditions though,
CPPIB Chief Executive Mark Wiseman stressed that the fund has no
plans to sit on the sidelines.
"From an investor perspective, and not just any investor but
one with the characteristics of CPPIB like scale, certainty of
assets and a very long time horizon in terms of investment
focus, these market conditions are actually quite favorable for
us to be able to exploit those comparative advantages" said
Wiseman.
"For a foreign investor with our characteristics, volatility
is our friend. What we're able to do in these market conditions,
when others are shying away, when others lack liquidity and when
others are forced to take a short view, is we can actually step
in and take advantage of those market conditions," he said.
CPPIB is invested in major infrastructure projects, real
estate and other assets around the world. In June, it announced
a deal to buy GE Capital's private equity lending portfolio for
$12 billion. ID:nL1N0YV0E0
Wiseman said CPPIB is going to continue to invest overseas
and diversify its portfolio, despite a recent weakening in the
Canadian dollar.
"We will continue to aggressively diversify the portfolio
across asset classes and geographies. What that really does is
creates an all-weather, resilient portfolio for the long term.
The most recent quarter is a perfect demonstration of that," he
said, noting that CPPIB was essentially flat in the quarter even
though many of the world's major indexes lost value in Canadian
dollar terms in the period.
($1 = 1.3065 Canadian dollars)