Hi everyone. I'm Nicolai Tangen, the CEO

of the Norwegian sovereign wealth fund.

And today I'm joined by John Graham, the

CEO of CPPIB,

which is the Canadian pension fund,

basically looking after the savings of

22 million Canadians.

Now, CPPIB is one of the most respected

pension funds in the world, and the

Canadian model has become a blueprint

globally.

Now, what makes John stand out is that

he is a scientist first who found his

way into one of the world's great

financial institutions.

And I'm really curious to dig in what

your scientific mindset brings to

investing, John. So, big thank you for

joining us.

>> Well, thank you for having me. Lot to

cover.

>> Absolutely. Now, first of all, um

could you help us understand just what

the Canadian pension plan is? Just how

is it different from a fund like ours?

>> Sure. So, uh CPPIB Investments were the

third-party asset manager for the Canada

Pension Plan.

The Canada Pension Plan is the uh

mandatory program that all working

Canadians contribute to. Um so, for it'd

be somewhat similar if you were in the

US to to to social security.

Um so, it's it's meant to provide a

inflation-protected

you know, defined benefit for for

working Canadians.

>> How big is it?

>> Today, the fund, the CPP fund, is around

$800 billion, but it's actually a a

hybrid plan. So, just one of the things

in that I think is important to to

appreciate cuz it really has a big

influence on how we manage the money,

is about 30 years ago, the Canadian

government realized that the CPP,

um at its current contributions and

benefit rates, was on a path to be

exhausted.

And this was because it was a

pay-as-you-go program, money comes in,

immediately goes out,

and demographics were changing. You

know, you you had a aging population,

you had people having fewer kids, people

living longer. And people living longer

is obviously a good thing.

Uh but the plan was on a path to being

exhausted. So, they restructured the

plan. They increased the contribution

rate, modified benefits, and they

created CPP Investments as

the money manager to invest the funds,

the surplus funds that aren't

immediately needed to pay out benefits.

Um and I think what's you when we

started out, that plan is it was about

15% funded. So, really it was still a

pay-as-you-go plan. And over time, our

very first check was $12 million.

So, we got a check for $12 million uh

uh about 27 years ago. Today, the plan

sits about 800 billion.

And the plan is partially funded,

meaning that

>> you are and you are independent from the

Canadian government?

>> Yeah.

>> How how how hard is that to protect that

independence?

>> Yeah, we were created to be independent

with respect to investment

decision-making, but we're still

accountable. We still have

accountabilities cuz we're accountable

to to all Canadians.

And I think this is something that the

Canadian government recognizes is

important um to have both

independence with investment

decision-making.

And that's enshrined in federal

legislation. So, when we were when we

were created, the CPPIB Act basically

enshrined our mandate to maximize return

without undue risk of loss. And you

asked the question, how do we differ

from, let's say, a sovereign wealth

fund?

And I think the big difference is we're

pension plan, which means that we have

liabilities.

>> So, when people when people try to

replicate the Canadian model, what do

you say that they get wrong?

>> What do they get wrong?

>> Yeah.

>> First I think the first important thing

is governance.

And pretty much all the Canadian plans

have some similar level of governance in

that there is independence around

investment decision-making, but

obviously accountability for to the key

stakeholders.

>> Mhm.

>> And that independence around investment

decision-making provides the flexibility

or to build a investment organization

that has a lot of levers to pull for

driving returns.

Public versus private, active versus

passive, domestic versus global. And I

think having I'm a big believer in

optionality and having those various

levers to pull over the long run drives

value.

>> And we will get back to to some of them,

but just in the meantime you got eight

pension funds in

in Canada, right? Sometimes called the

Maple Eight.

So how how did Canada develop this

approach?

>> Yeah, and I there's there's definitely

more than eight, but there is a term

term Maple Eight that uh really captures

probably the eight biggest. There's now

Maple Nine, so there's another plan kind

of kind of coming in to Maple Nine, and

sometimes it's Maple 10.

>> Is it good Is it good to have so many

pension funds?

>> It's good. It's good. And and you know,

I I I think the they're very well run.

They they have

uh have had good governance, good

performance.

I've never been a huge fan of the Maple

Eight concept because I think one thing

it does miss

is that we're all a little bit different

in that we all have different liability

streams. We're all pension plans.

So we all have liability streams. Like

at the end of the day, we're investing

the money

to meet the pension promise.

So in Canada, across 22 million

Canadians, a promise has been made,

right? So at every paycheck you have a

deduction that says CPP.

And what you get in return for that

deduction is a promise. A promise that

when you retire, you're going to get a a

pension.

>> Mhm.

>> And our job is to make sure that we meet

that promise. So

>> So in order to meet that promise, you

need to invest well, right? So, here you

are 800 billion.

Just how do you how do you decide where

the money goes? How do you decide how to

split the asset classes?

>> So, so we are very linked to our

our mandate. Max our mandate enshrined

in federal legislation

is to maximize return without undue risk

of loss accounting for the factors that

impact the funding of the plan.

That's our mandate. And so they you got

to invest the money

maximize return, try to grow the funding

ratio of the of the plan

and make sure that we can meet these

obligations or these promises that have

been made.

>> And you and you don't have like we have

a mandate where which the ministry gives

us which tells us, you know, how much

shares, how much bonds. You don't have

that.

>> We don't have that. Literally our

mandate is is maximize return without

undue risk of loss taking into account

the factors that impact the plan.

>> So, you know, here here you are John

Graham 800 billion.

Go and see what you can do with it.

>> What started as 12 million and now it's

800 billion. So, and of that 800 billion

550 billion is investment income. It it

does show the power of compounding,

right? So,

70% of the fund is

investment income.

And so we only, you know, quote unquote

own the entirety of the investment

process. So, to be a little bit

technical, we take that and think

there's kind of three big decisions we

make and

we take a total portfolio approach and

and fundamentally we try to maximize the

total return of the total portfolio. So,

the first big decision, what level of

risk are we going to take?

What level of risk will maximize return

without undue risk of loss? How do we

thread that needle of

taking our time horizon? So,

recognizing, and I think this is really

important,

we're pension plan, we're not a wealth

maximizing vehicle.

>> What's the difference between the two?

>> That we will at time, and I would

actually argue we may be in that time

right now with the concentration risk in

the markets,

there will be times when we are not

looking to fully participate in the

market in parts of the market where we

feel there might be an undue risk of

loss.

So,

we are

not always maximizing. When we think

about the upside and the downside,

there are times when we may give up a

little bit of upside to protect the

downside because we think at this moment

in time that's more important for

um thinking about the liability stream

or the liabilities we have uh to to

to meet.

So,

risk What level of risk are we going to

take? That's number one.

Two, asset classes. How are we going to

diversify? And you'll hear me say this

probably a few times, diversification is

an act of humility. We don't know.

And and and we do firmly believe in

diversifying across asset classes and

geographies

as ultimately a risk management tool.

Um the third decision is security

selection.

Um what which companies

which assets do we want in the

portfolio?

>> Now, you uh

you don't operate in asset silos, is

that right? Just how do you How do you

think about the various assets?

[clears throat]

>> Yeah, so in the total portfolio

approach, we we we definitely try to do

our best not to get totally siloed into

thinking about asset classes and having

fixed hard allocations into asset

classes or into geographies. We think in

factor space. We think about what's the

real economic exposure we're bringing

into the portfolio, whether it be, you

know, duration, inflation sensitivity,

whatever it may be,

um

knowing that asset class labels can be a

little bit misleading. I mean,

personally,

I don't view public equity and private

equity as as different asset classes.

I view them as different kind of

ownership structures within equities

and they have different

ways of behaving through

through through the cycle. So, we try

not to get hard allocations into asset

classes, hard allocations into countries

cuz that can lead to some strange

behavior when you're trying to rebalance

the portfolio, but think about what are

the correlations between the different

asset classes. That being said, we are

organized by asset class, so we do have

kind of soft allocations into asset

classes and we do ask people

into the execution side to really

understand their asset class, whether

that be real estate or infrastructure,

or credit, and to build portfolios in

their asset class.

>> What are the kind of things you don't

do?

>> We don't do.

>> Mhm.

>> Well, we don't do

um

There's very little we don't do uh at at

800 billion. And it's probably similar

for you, but there's but there's very

little we don't do in that we also

believe that we do not follow a path of

blanket divestment.

So, take oil and gas. We have continued

to invest in oil and gas. We have

continued to support the oil and gas

industry. We do not have a uh we never

take a path of blanket divestment. So,

there's no industry that that's off side

for us. Now, there's some things we make

a deliberate choice not to do. So, take

from a geography perspective. We're

really We We probably have exposure to

50 countries around the world, but we're

probably only really active in 12

because we just can't really be

experts in every country around the

world. So, we will prioritize and decide

that we're going to really focus maybe

in on 12.

With respect to asset classes, we've

chosen the big ones, but you know, one

thing we've never done is crypto. We've

never directly invested in crypto. And I

don't know how much money you want to

spend on that.

>> been that's been pretty good lately not

to be in that one.

But uh

um one asset class where you are where

we are not is uh private assets, so

private equity,

private credit. Um

Now, you are You have one of the largest

private market portfolios of anybody in

the world. And so, what is your view on

that asset class just now?

>> Yeah, so I think we take a long-term

view. And you know, private equity

undoubtedly has had a more challenging

couple years.

Um we can get into that. But if I look

over the past 10 15 years, it's been one

of the biggest drivers of return for the

for the portfolio. I personally continue

to be a believer in the in the pri- the

private governance model. I think for

certain companies at certain times in

their life cycle,

private ownership makes a lot of sense.

Um getting out of the scrutiny of the

public markets,

um hav- having the investors be very

actively engaged from a governance

perspective [clears throat]

on the board of directors. I think

there's at certain points in time,

private ownership makes a lot of sense.

So, we continue to be constructive on

private equity. Recognizing though that

right now, you know, the returns has

been well documented over the past

couple years have not been,

you know, at expectations. But if I look

over 10 15 years, it's it's been a big

driver of value for CPP Investments.

>> And you you measure your returns against

um

kind of a benchmark portfolio which

consists of Is it bonds and equities?

>> Yeah. So, we have a benchmark portfolio

that is basically matches kind of the

big asset classes that we invest in. So,

it's bonds and equities, but there is

also some sector specific indices in

there.

Whether it be real estate, credit,

uh infrastructure, energy.

And you know, I think right now, looking

at at private equity, I mean, one of the

challenges we have is the the public

markets, especially the broader markets,

are just very concentrated and very

concentrated into a a handful of

US-based technology stocks.

>> Yeah, which is not what our portfolio

looks like.

>> No, no. No, no.

Uh this is a a challenge for most active

[clears throat]

managers uh these days. Now, uh you

manage a lot of your uh private exposure

internally.

Uh how do you make the choice between

outsourcing that

uh versus uh actually managing it

yourself?

>> Yeah, and and uh the way I describe our

approach is it's a partnership model.

So, for take private equity, we we do

invest in um private equity managers

around the world who we think are the

best in and the best investors in their

space.

And then we do co-investing and

co-underwriting

with them.

Some other programs, like infrastructure

and energy, historically, we may have

been a little bit more direct, but we

certainly do have some kind of external

relationships. And here's a case for me

though

that uh

these are choices.

These are choices the organization

makes.

And I come back to what we're solving

for. We're solving to maximize the total

return of the total portfolio.

So, we are you know, we see value in

having direct and and fund

relationships.

Um exactly how much we have of each is

just going to be based on where we get

the best returns.

>> Who does better? Your external managers

or your guy your internal guys?

>> Well, you have to think about often why

you're doing the internal. So, the

the internal

you office often have co-investing and

co-writing underwriting at kind of

advantageous economics. So, you're not

paying the the the the

>> [laughter]

>> the full fee and promote or carry the

performance fee.

So, I think it's hard to say who does

better because

your internal teams are benefiting from

the origination and the asset management

of the external teams.

>> Mhm.

>> Um so, they're not totally separable,

right? Like

they don't compete with each other. The

internal teams are actually building off

of the uh

the external um

the external managers. So,

I actually think what's important is to

mash them together and look at the

blended returns of two as opposed to

thinking of them as two separate

competing

kind of investment strategies.

>> Absolutely. Now, John um Canada and

Norway compete in ice hockey. Um but but

let's not talk about that.

>> Oh, really? They do?

>> But no, well, I I saw you there. But we

also But more importantly, we we we we

compete in uh transparency, right?

Because there is just uh FYI for the for

the listeners, there is the World

Championship in transparency. And and uh

and you guys and us, we typically uh you

know, together are at the top of the the

the league table here.

>> Yeah.

>> So, why why in your mind why is

transparency important?

>> Yeah, and and and I and I I will concede

I think you've gotten the gold medal the

last couple years.

>> Well, I think we're doing

we're we're both doing really well here.

>> We're tied for two.

So, for for us at at CPP Investments,

transparency is something that we take

very seriously. And part of it comes

back to our purpose and and who we are.

We're a you know, mandatory retirement

program that all Canadians contribute

to. We manage $800 billion of what is

largely a

you know, public good here in in Canada.

So, we have taken an approach to

disclose at a level that isn't even

beyond what is required under um the

CPPIB Act.

With a view that Canadians should

understand how their money is being uh

how the money is being invested

and uh how the cost of base that we have

within within CPP Investments. So,

within our quarterly statements, we

release pretty much every

investment we make. So, we have

transparency there. And we provide a lot

of information on how we run the fund,

our various frameworks for running the

fund. And we think it's important

because of who we are.

>> Yeah. Yeah.

John, let's spend a few moments on the

geopolitics. How much of your

investments are are in Canada?

>> We have about 12% of the portfolio in

Canada.

>> Yeah. And what about the US?

>> We are it kind of ebbs and flows again.

We don't have hard allocations.

45% plus or minus a few percent. It It

can get up to 50, but

>> [clears throat]

>> you're probably you're probably similar

in that the US has been an incredible

market over the past 10 years.

>> Absolutely. Absolutely.

>> And And our one of our biggest

challenges is if if we don't manage it,

it'll just keep growing and growing and

growing as part of the portfolio. So, we

actually it's one area we do try to

manage around that 45 to 50-ish

percentage range.

>> Is there any

kind of political

what should we say not interference, but

any political

indications

in terms of trying to get you to reduce

your US exposure?

>> No. No. I mean, certainly I think the

people would like to see us invest more

domestically in in some areas,

especially right now. And I will say

from a Canadian perspective, Canada's

looking more interesting than it has in

in years. And And part of that

>> is that?

>> Yeah, and part of that is the ambition.

You know, there's an ambition at the

provincial level, at the federal level

to build things and to build big things.

And pension funds like us like

infrastructure. We like big assets that

are cash generative. So, there's

definitely a lot more kind of curiosity

about investing in Canada than it has

been in

in years. So,

people certainly would like to see us

invest more in Canada and and we're

actively looking at investment

opportunities, but we'll always do it

with our mandate in mind. You know, what

when we were created.

>> The the government is trying to attract

foreign investors.

Do you think you would always get kind

of the goodies?

The best bits?

>> No, I don't. I actually don't and I

think this this is

I think this

I look at the US.

The US is the most competitive

market in the world. It's most

competitive capital market in the world

and it's been delivering the best

returns.

Competitive capital is a good thing.

The ambition this country has in Canada

for building things, it's going to

require

domestic and foreign capital.

And we're a big advocate that that

we should seek competition for capital.

It'll drive the cost of capital down and

it'll ultimately lead to to better

investment opportunities. You'd ask

about the US. I mean, people appreciate

that

it's a it's from a market cap

perspective, I think it's what 70 65 70%

of the the global equity markets. So,

even at 45% there's an argument that

we're actually underweight the US.

>> What about China?

>> Yeah.

It's an interesting question and and

China is a market where we've been

active for quite a while. You know, my

my predecessors were incredibly

knowledgeable and well connected into in

into China.

Our exposure to China has declined over

the past few years.

Part of that is because the the rest of

the portfolio has grown around it. You

know, there there hasn't been a we

haven't been selling assets per se, but

the the rest of the portfolio has been

growing around it.

We maintain a a

reasonable I think allocation

into China. My personal view is and

if you want to be a long-term investor,

you have

you have to have some level of

investment in the world's second largest

economy.

Um, you also have to have a certain

amount of knowledge about the world's

second largest economy because it has

influence, uh,

real influence around the globe.

So, we've maintained our understanding,

our some of our relationships in the in

the market. Um,

I think for China it's always a case of

of how much

of the portfolio and then how. What

industries, um, what sectors do we want

to, uh, invest in? Knowing that there's

some areas like obviously be very

sensitive to get into defense or to get

into dual-use technologies. So, you have

to think about

how you want to invest.

>> Yeah.

Talking about, uh, that, how does AI

change the way that you run your

organization?

>> That's a good question. That's a good

question. I mean, I think we're I think

we're figuring it out like lots of

people.

Um, and and and probably go through lots

of

peaks and troughs in thinking about the

the impact of of AI.

As an organization,

we certainly have prioritized literacy

and fluency.

Certainly prioritized trying to have a

employee base that is very fluent in the

tools and the technologies.

So, we have rolled out multiple LLMs to

every single employee in the

organization.

And we have provided, uh, training.

We've provided courses and in fact, um,

we have these kind of bootcamps that

employees can can sign up for. So, we've

seen pretty good adoption, pretty good,

uh,

you know, I think actually very good

adoption on at the grassroots level of

from AI.

More senior level, there's probably half

a dozen processes we're thinking through

on where can we really embed AI to do it

more efficiently, more effectively, but

a little bit more from the operations

side.

Has AI made us a better investor?

Have we made better investment decisions

because of AI?

At this point, TBD. At this point,

unclear.

But we are dedicating a lot of time and

uh effort to

uh figuring that out.

>> When you see when you see 10 years out,

how do you think it will change the way

you work?

>> Yeah. That's the one thing, too, that um

as we think about AI, and I do believe

the organization has really tried to

adopt it, and we we've given people a

lot of license to to try to use in their

daily life, and encourage them to just

be more efficient.

And I don't know if this is AI or just

good old-fashioned process optimization,

but over the past 3-4 years,

we at CPP Investments,

we have fewer employees than we did 3

years ago. Not by a lot.

Let's call it basically flat, but we

have about 300 billion more of assets.

Um so, I think we're more efficient. And

And has AI contributed to that?

Probably. AI's been

contributed to that a little bit, or or

at least has kind of put a fire under

people's feet to to to think about

efficiency.

10 years from now, where my mind is,

like I'm not in the place of we we

should stop hiring juniors. I think it's

madness to stop hiring juniors, because

I think

>> I I agree. I agree.

>> Cuz 10 years from now, they're going to

be the future leaders of the

organization, and, you know,

unless I've made terrible life choices,

I won't be here 10-15 years from now.

So, so we're going to keep hiring

juniors.

What I think this allows us to do is

just get operational leverage. I don't

see the organization from a people

perspective being a lot smaller,

um

but what I do see is we can add hundreds

of billions of assets without really um

adding a huge amount of of cost or or or

people.

And will it help us make better

investment decisions?

I think I'm still TBD on that. I don't

know what your perspective is. I'm still

TBD as to

it'll help us make faster decisions,

yes. Will it help us make better

decisions?

TBD.

>> Yeah, no I

I would disagree with you. I would

disagree with you.

Let's spend a few minutes on you as a

leader.

Um, how do you think your scientific

background has formed you as a leader?

>> [snorts]

>> Yeah, and and probably formed as a in a

permanent investment perspective.

Wait a second.

There's not many things I know in life

with certainty.

But one of the things I know with

certainty is I'm not a scientist

anymore.

Investing is not science.

Even um

even though I'll see these incredibly

sophisticated models, these incredibly

quantitative approaches,

investing, I believe, is not science.

And And the reason I

>> If it's If it's not science, what is it?

>> It's a little bit of art and science.

It's a It's a quantitative art.

>> And what kind of art is it?

>> [laughter]

>> But

it's an art that requires judgment. It's

an art that requires experience and an

art that that actually does require, I

think, and that's a little bit of why

with AI that I'm I'm I'm I'm cautious on

whether it'll help us make better

decisions. I don't know. It may.

Is in science, and I I was an

experimental scientist, right?

We could do an experiment in

Toronto or in the States and someone

could replicate that in

uh

Japan and they could replicate it in 5

years from now and 10 years from now.

Investing is this living ecosystem

that's changing every day.

And our models for

which were were CBB Investments I

describe as a very evidence-based,

probably quite quantitative

organization.

And I believe it's the right approach

and that it helps us

think through it, but at the end of the

day they are just

they're our best guess at how the the

world is going to unfold and

until someone gives me data on the

future,

we are still trying to forecast out the

future with a a certain amount of

uncertainty.

>> And

>> [clears throat]

>> to run to run a company in

in that environment, what are the most

important leadership principles you

have?

>> Yeah, so one of the things I've learned

and probably learned the hard way

through my career,

um and I do believe this is

every leader has a certain

kind of call it a preferred habitat.

Every every leader has a style that is

really reflective of who they are and

how they want to approach a problem,

whether you're a

super empathetic leader, whether you're

a pacesetter, a taskmaster, whatever it

is.

I have learned that at certain times you

need to be situationally aware.

And whether it's the what's going on at

the time or whether it's and sometimes

the individual and being able to flex

the leadership style a little bit, not

losing sight of the of the mandate, not

losing sight of the mission and where

you want to go,

but being able to flex a little bit on

what you're

how you're going to approach it, you

know, I

>> Tell me tell tell me about tell me about

a time you really flexed it.

>> Sure, I'd say COVID.

Um

when

people were scared,

huge amount of uncertainty, people were

worried about their health,

worried about their um

jobs.

And

I think we needed to lean into empathy

at that time.

Um and and I think we did lean into

empathy.

>> Did that come na- Did that come

naturally to you?

>> Well,

I'm probably a little bit more of a

pacesetter. I'm probably someone who

also is a little bit more like even

coming back to COVID, I'm definitely

someone who is more of an in-office

person who believes that we need to be

in the in the office. And I've had to

you know, modify my approach a little

bit to make sure that um

we still give people agency and we still

give people a feeling that they have

that they're empowered to make decisions

around their around their careers.

>> Now, our uh listeners are

uh when we um when we kind of poll them

and ask them how they want to What do

What do they want to have more in the

poll calls? They say they want to hear

more about failures, you know? They only

talk about successes and everything is

so great and

uh you know, tell me about

some of your biggest mistakes in life.

>> So, my big failures?

>> Yeah.

>> Okay. Well, I think as you know, in when

in in investing, you you you do have the

opportunity to have failures.

>> How tough?

>> And you you you have the opportunity to

be humbled.

And any investor who says they haven't

been humbled um

is is probably not either taking a lot

of risk or is is not being overly

uh truthful.

So, certainly some of the investments

I've been actively engaged on um

have not turned out as as planned. So,

what have I learned from that?

One of the things and one of the things

I try to tell our our our younger

colleagues too, which I do believe, is

you

you can't diligence

a bad investment into a good investment.

Spending another week

is is not going to turn a fundamentally

bad investment into a good investment.

And in fact,

you you you may just convince yourself

that it is.

Um and sometimes

you have to know when to quit.

And you have to know when to back away

from uh an investment. If I think about

where

mistakes I made and failures I had,

just this belief that if you just did

more work, if you just structured it, or

you could take a bad investment, if you

could just structure it a little bit

more, you could turn it into a good

investment.

>> What's the worst one you had?

>> My worst I'm not going to name the name

of it.

>> [laughter]

>> What about What about on the personal

level? What about like your personal

mistake?

>> The biggest failure on the personal

level?

>> Yeah.

>> I think the one thing we all learned too

in

in in in in in leadership roles that

getting the right team around you is the

most important is one of the most

important things.

>> Mhm.

>> Having a senior team that is aligned to

where you want to go

that is as bought into the vision and

the mandate of the of the organization

and will truly act as team one. Will be

there to support each other and be there

to support the um

the organization.

And I think you also have to realize

that when it comes to hiring people,

when it comes to the teams,

you never get it perfectly right.

Uh and and

so I think one of the most important

things is to

make sure that you get your right team

in place.

>> And were you too slow in doing that?

>> I think like most people, you end up

being too slow.

>> Yeah.

>> You know, if if I ask leaders what are

some of their biggest regrets,

is that they waited too long to get

their team in place.

>> Mhm.

>> Um

and

guidance I give new CEOs is this is is

of the first things you should do.

Is when that one year anniversary hits,

you should be able to look around your

senior team and say this is exactly who

I want with me at this point. Because

one thing we've also found is I've been

in this role for over five years,

it has gone by in a blink of an eye.

>> Absolutely.

>> [sighs]

>> Uh same here. I've been close to six.

It's just like bang, as if we started

yesterday.

Now, um

tell me about the culture. What do you

How would you describe the culture?

>> Yeah, I would describe the culture of

CPPIB Investments as very

purpose-driven.

So, who we are, right? Like it's not

lost on anybody

the important work we do for for

Canadians.

And every time we do, which I'm sure you

do, employee engagement surveys and

various kind of

employee suggestion kind of uh surveys,

the one thing that always comes back

that is a pretty much always our highest

score

is that people

believe in and are are really motivated

by the purpose of the organization.

And I think the culture has largely

formed around that

the the kind of the purpose-driven

nature of the of the organization.

>> How do you set the expectations beyond

which you perform well above average

well above expectations and you know,

the proportion who you think needs to

improve? Just where you set it.

>> Yeah. Yeah. And and and I think this is

one of the challenges um for

organizations such as such as ours. The

we are ultimately investing as a

talent-based organization as a

talent-based business.

Um and so I think we have to be very

rigorous on talent.

One of the things that I will tell the

senior leadership in the organization is

at the end of the week you should be

able to look at yourself in the mirror

and and answer two questions. One, that

you helped drive performance, and two,

that you help develop the next

generation of leaders.

So, every single leader, that that

performance and people are two of the

the expectations to be a leader at CPP

Investments.

So, I think we take talent development

very seriously, ensuring that that we

really do

um

have the best people working here. I

think one of the needles we have to

thread

is

we're this enduring institution, similar

to you.

In that

we have to be here 50 years from now. We

have to be here 75 years from now.

We are almost by definition the exact

opposite of a founder organization.

We're almost the exact opposite of a

founder-led culture.

So

we have to actually, in some ways,

institutionalize the culture,

institutionalize

the uh investment process.

And it can never be about the

individual.

Um because that's not how you build a

durable, sustaining organization. It has

to be about the purpose. It has to be

about the mission. It has to be about

the mandate. But, investing is a lot

about individuals, right? And and

investing is a lot about, you know, you

these great investors.

Um so, what we can't have at CPP

Investments is a star culture. We

We can't build investment programs

around individuals. We have to build

investment programs around

organizational strengths and advantages.

>> What other part of the culture are you

trying to improve?

>> Trying to improve the

I would say a a a little bit on just

what I what I mentioned.

And

it's

ensuring that everybody really

understands

why we're here.

Um

we have one fund.

We have really kind of one mandate to

maximize return without undue risk of

loss.

So, how do we really embed that owner's

mindset into the organization? How do we

really embed that one fund mindset into

the organization to

ensure that everybody is thinking long

term and everybody is thinking about how

do we maximize

um

the long-term returns of the of the of

the portfolio. And

investing's an interesting

you know, it's an

it's a fascinating business to to be in.

Um

so, in a lot of organizations, it's very

much about the individual. They're

selling almost an individual's kind of

je ne sais quoi with investing.

And here at CPP Investments, saying,

"How do we get people to really buy into

that one fund mentality?"

And to really think about how do we

compound the value of the platform? How

do we make this organization a more

valuable platform 5 years from now than

it is today?

>> Do you think Do you think the culture is

a reflection of your own personality?

>> I actually don't. I actually don't.

>> And where is it different from you?

>> Well, well, I'm not sure if if it's

different because I don't think you can

lead this organization if if if if you

cuz I think the culture I set is very

purpose-driven.

So, Yeah, but you are you So, are you?

Yeah, exactly. So, I I think people who

aren't purpose-driven

will either self-select out or be

selected out. You know, I

I think when when people exit this

organization,

um it's often because that they're

they just aren't aligned to the purpose

of the of the organization and want to

do something else. We have a lot of

amazing uh ex-ex-colleagues. So,

I think from a from a culture

perspective, I think the I I I

you know, it's terrible to say, but I I

think you got to conform to what the the

CPPIB culture is if you want to be a

leader here. And one of the things I

find amazing, and I I do find this

amazing, we have seven offices outside

of Toronto, and and we all get it. We're

the We're the Canada Pension Plan. It's

in the name, right? Like Like

we we are managing

the

retirement savings of 22 million

Canadians.

But we have colleagues in London, in São

Paulo, in New York, in Hong Kong, in

Mumbai, and

the culture there is remarkably similar.

Remarkably similar. Like

they are I'm motivated by the purpose.

They get it. We spend a lot of time

talking about it, and

I bring people to our offices around the

world, and one of the common things they

say is like

wow. Like

we're in Mumbai, or we're in Hong Kong,

but you would have thought we were in

Toronto the way they were talking about

the purpose of the organization.

>> Mhm. How do you make sure it doesn't

become bureaucratic?

>> Well, that's a very good question, and I

would say that is a

constant and um

requires constant effort, cuz most

bureaucracy is is put in place for very

good reasons, and uh made sense at the

time, and then it just kind of takes on

a life of its own, like a

like a Frankenstein that grows over time

and gets fed and and becomes

unmanageable at uh at some point.

I am sure if you ask some of our

colleagues, they would give you very

different views on how bureaucratic we

are. Um

I think it's something that we try to

thread that needle.

Sometimes well, sometimes not as well as

How do we empower people

to

and delegate to people so they can make

decisions. I am a big believer that

decisions should be made by the people

who are closest to the information.

So, how do we delegate to people, let's

say on the investment side,

into the various geographies and asset

classes so they can make decisions,

but ensuring that they are aligned, you

know.

Delegation without alignment leads to

chaos. So, how do we make sure they're

aligned and they understand what we're

solving for?

And then, um,

I have to periodically,

you know,

I found in this job like once every so

many years, kind of hit a pause button

and do a decluttering of the of the

bureaucracy because

uh, I've also learned that it only goes

one way. It

>> Absolutely.

>> you will not naturally, you know,

de-bureaucratize. [laughter]

It'll just always add, always add, and

then every once in a while you got to

slam that pause button and just start

purging some of it out and then let it

to start accumulating again.

>> Yeah.

How do you switch off uh, outside work?

>> Yeah, probably not well. Probably not

well, but the

I think we we learn things about

ourselves. We learn what recharges our

batteries. It probably speaks to whether

we're introverts or extroverts

uh, at heart.

>> How do you charge?

>> How do I charge it? I I actually charge,

I have learned this and you can ask my

friends and my family.

I have three dogs.

I will

um,

put on my ear put in my earbuds,

take the dogs for like a 45-minute walk

at night, listen to podcasts, listen to

audiobooks,

and just in some ways kind of disconnect

a little bit. It's not the best way

when you have to recharge by basically

being alone for 45 minutes at the end of

the day, but I have found in this role

that it it's probably what charges the

battery the fastest.

>> Hm. What do you listen to?

>> What do I listen to? So, I don't listen

to fiction. I don't read fiction.

Um

I like to listen to podcasts on history,

a lot of podcasts on history.

I came across one recently that was an

older one called the history of Rome. I

think it had 170 episodes that I

listened to. I loved it. Um so a lot on

history and a lot on business, whether

it be the Financial Times or Bloomberg,

the various

business or investing podcasts.

>> Mhm.

Now, we have

a lot of young listeners. What would be

your advice to them?

>> So, yeah, I have two children. They're

23 and and 20. So,

um

I always give the the advice that I give

them. So, it's it's the [laughter] same

advice that I give my own

children who are really just starting

their professional career.

And the advice I give them both of them

is

keep learning.

Um

just always keep learning.

Yeah.

Keep learning about your job.

Um never stagnate. Uh this is one thing

I've seen in my career is it was people

going to cruise control and they become

complacent. And jobs evolve and jobs

will evolve away from them. So, keep

learning. Keep learning about your job.

Keep learning about other jobs that

people are doing

in your in your organization.

Don't be don't be complacent and you are

going to have to take some ownership of

your career. And

think about what you want to do and make

sure that you know, your value to the

company is only increasing.

>> Yeah.

Well, John, that seems like really sound

advice. It's been really great talking

to you.

Please keep up all the good work on

behalf of 22 million Canadians.

>> Great. Thank you very much. I really

appreciate the opportunity to share the

story.

>> Mhm.