A long-term fund with $370 billion under management shares some investing 'themes'

  • Shifting demographics, the rise of the middle-income and autonomous vehicles are some of the trends that the Canada Pension Plan Investment Board sees as an investment theme.
  • The fund is one of the world's largest and has nearly $370 billion of assets under management.
Mark Machin, president and chief executive officer of the Canada Pension Plan Investment Board (CPPIB)
Cole Burston | Bloomberg | Getty Images
Mark Machin, president and chief executive officer of the Canada Pension Plan Investment Board (CPPIB)

Canada's national pension fund invests for the long-term, its CEO told CNBC on Sunday, and he named trends that are helping to guide its decision-making.

"We're trying to go deep on certain areas where we see long-term trends and try to identify the best parts of those themes to invest in, companies to invest in, to express that view," Mark Machin, president and CEO of Canada Pension Plan Investment Board, told CNBC's Martin Soong at the China Development Forum in Beijing.

Machin picked several themes that the fund — one of the world's largest, with nearly $370 billion of assets under management — is betting on.

'Retail 4.0'

New retail, or what Machin referred to as "Retail 4.0," is one sector that the long-term investment fund is watching.

"We're substantial investors in Alibaba, which we were pre-IPO and post-IPO. We've also invested in funds alongside them that are specializing in new retail, as well as Meituan Dianping," he said.

Chinese food delivery app Meituan Dianping listed in Hong Kong last September. Some analysts are not as bullish about the tech firm, with one predicting more than 30 percent downside for the stock.

Self-driving automobiles

The pension fund, which invests on behalf of more than 20 million Canadians, is looking at electric and autonomous vehicles, as well as sensor companies.

"We've invested in companies like Zoox, which is an autonomous taxi company based on the (U.S.) West Coast," Machin said.

California-based Zoox received approval in December to provide driverless ride services for public passengers.

The privately held company last week became the target of a lawsuit from Tesla, which claims Zoox "absconded" with proprietary information related to "warehousing, logistics, and inventory control operations," according to a filing in the U.S. District Court for the Northern District of California.

Zoox declined to comment on the suit.

Shifting demographics

There will be more retirees than children in the U.S. by 2035, according to the Census Bureau.

That demographic shift is one theme the fund has been investing in, said Machin. He added that aging baby boomers often want to "go see the world" when they reach retirement.

"One of the best ways that Americans want to go see the world is go to Europe and go on a river cruise ... So we invested in a company called Viking Cruises, which is the leading provider of river cruises, and some other cruises, in Europe and increasingly around the world," Machin added.

Privately held Viking Cruises operates the vessel Viking Sky, which was evacuated over the weekend after suffering engine failure in stormy waters.

Rise of the middle class

Another trend in emerging markets, he said, is the rise of the middle-income segment of the population.

"So here in China, in India, we're investing in things that will best express that view of rise of the middle class."

— CNBC's Penny Chen contributed to this report.

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