The Public Sector Pension Investment Board (PSP Investments) reported a 6.5% one-year net return for fiscal 2026, trailing its reference portfolio benchmark by 5.2 percentage points as private markets faced a more challenging investment environment.
Despite the benchmark underperformance, the Canadian pension investor’s assets under management increased by C$20.9B to C$320.6B, with roughly 70% of the growth driven by investment returns, according to its latest annual report. PSP Investments, which manages pension assets for Canada’s federal Public Service, Canadian Armed Forces, Royal Canadian Mounted Police and Reserve Force pension plans, also reported a 10-year net annualized return of 8.8%.
The fund attributed its benchmark underperformance largely to a difficult backdrop for private markets amid macroeconomic uncertainty and shifting market conditions. Like many large institutional investors of late, PSP Investments also noted that public market-based benchmarks can diverge from private asset performance over shorter time horizons. Currency movements reduced returns by 2.2 percentage points during the fiscal year, partially reversing the 5.8 percentage-point benefit recorded in fiscal 2025.
“Despite heightened volatility and uncertainty, PSP Investments delivered solid results and continued to strengthen the long-term funding position of the pension plans we support,” said Deborah K. Orida, the fund’s president and chief executive officer, in the report. “Our long-term results, the stability of the returns, and the funding of the plans are the best indicators of how we are fulfilling our role as a pension investor.”
Public market equities were the portfolio’s strongest performer, returning 20.6% on C$92.8B in assets under management, as of Mar. 31, 2026, as global equity markets rallied during the fiscal year. Infrastructure gained 10.1% on C$32.0B, while private equity returned 5.3% on C$39.1B. Fixed income, credit investments and natural resources posted returns of 2.3%, 3.1% and 2.4%, respectively. Real estate was the only asset class to record a negative one-year result, declining 7.3% on C$27.8B in assets.
Over longer periods, private markets were among the strongest contributors. Infrastructure generated annualized returns of 15.0% over five years and 12.7% over 10 years, while private equity returned 12.7% and 12.0%, respectively. Credit investments delivered annualized returns of 10.5% over five years and 11.1% over 10 years. Public equities produced annualized returns of 11.4% over five years and 12.3% over 10 years, while fixed income generated 3.0% and 3.2% annualized over the same periods. Real estate posted a negative 0.5% annualized return over five years, though it remained positive over 10 years at 2.8%.
Orida added that the fund’s results and measures taken are best assessed over a full market cycle. “Our portfolio remains well positioned to deliver long-term value.”
PSP Investments also reduced operating costs by C$24M during the fiscal year. Its operating cost ratio fell to 24.7 basis points from 27.9 basis points a year earlier, reflecting portfolio streamlining, asset sales and broader efficiency initiatives under the fund’s three-year strategic plan.
Orida highlighted the fund’s domestic investment program, noting that, as of Mar. 31, 2026, PSP Investments had more than C$75B invested in Canada.
“We are proud of how we have served our mandate and our country this year. In fiscal 2026, we invested over C$10B in Canada, primarily driven by increased direct private investments and a higher allocation to Canadian equities, which performed well this year.”
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