PSP natural resources chief becomes CEO after boosting ag imprint

Under Neil Cunningham's tenure, timber and agri have grown to represent nearly 90% of the Canadian pension's $3bn natural resources portfolio.

The Public Sector Pension Investment Board has promoted Neil Cunningham, its former real estate and natural resources boss, to the role of president and chief executive.

Cunningham had been at the helm of natural resources since December 2016, having been named a senior vice-president and global head of real estate in 2015. His background is heavily tilted towards property: he joined PSP in 2004 as a vice-president for real estate investments after holding several real estate investment positions at Merrill Lynch, Brazos Advisors Canada, National Bank of Canada and Coopers & Lybrand.

Under his tenure, however, natural resources acquired ever more gravitas within the $110 billion Canadian pension’s portfolio.

That’s particularly true of agriculture and timberland, which together accounted for 89 percent of the C$3.7 billion ($2.9 billion; €2.4 billion) in natural resources PSP held as at end March 2017 (the balance being made up of oil and gas). Timber took the lion’s share, with 60.9 percent.

Part of the boost came from tie-ups and platform investments. Late last year, PSP teamed up with Blue Sky Alternative Investments, an Australia-listed fund manager, to deploy money in Australian real assets, including agriculture and infrastructure. Blue Sky’s portfolio includes water assets, agribusiness private equity and agricultural infrastructure under several real assets funds.

In June, PSP launched a platform primarily focused on California almonds and water rights, seeded with a 10,000 purchase alongside an unidentified “partner with a strong track record” in what marked the pension’s first direct investment in permanent crops. A month before, it had made a majority investment in Stahmann Farms Enterprises, Australia’s largest pecan grower, processor and supplier.

Cunningham succeeds André Bourbonnais, who departs PSP to join BlackRock later in 2018 after three years at the head of the Canadian pension.