Greater China property chief at Canada’s largest pension fund exits

The departure of the Canadian fund’s Greater China real estate head comes amid growing fears of a mainland property crisis and tension between Ottawa and Beijing.
Greater China property chief at Canada’s largest pension fund exits

Hong Kong-based Managing Director Guy Fulton has left the Canadian Pension Plan Investment Board (CPP Investments) after 14 years with the fund.

Guy Fulton

Fulton, who managed the fund’s Greater China real estate portfolio, was at the forefront of one of the largest Asia Pacific property deals in recent years, when CPP Investments sold its stake in six Raffles City Developments in China in 2021.

Net proceeds from the sale amounted to C$800 million ($649 million) before closing adjustments. CPP Investments did not disclose its exact shareholding in these projects.

CPP Investments – which manages $419 billion in investments - did not respond to AsianInvestor’s request for comment on the reasons for Fulton’s departure, or if he will be replaced.

According to the fund’s most recent annual report, CPP Investments has C$52 billion in real estate investments globally. They also have sizable real estate investments in China, though no country-wide investment figures are available.

While there is no substantial link, Fulton’s departure does come at time of tense relations between Ottawa and Beijing and amid fears of a looming property crisis in China.


Canada's largest pension funds continue to grapple with a challenging situation in China. While the country's rapid growth and immense size make it impossible to ignore, it has become increasingly risky to make sizable investments there.  

Moreover, as tensions between China and the US and Canada escalate both economically and diplomatically, pension fund managers are proceeding with caution when it comes to the world's second-largest economy.

Many of the largest pension fund investors in Canada have adjusted their risk appetite towards the mainland in subtle, yet meaningful ways.

In May, leaders of two of Canada’s largest public pension funds— Ontario Teachers’ Pension Plan and the BCI Investments—told a parliamentary committee of the Canadian government that they paused direct investments in China to reevaluate the associated risks.

Others have reduced their exposure and are primarily focusing on liquid public investments and index funds, which provide more flexibility to change strategies if needed.

However, no drastic measures have been taken to completely withdraw from the Chinese market.

During the same committee hearing in May, CPP Investments, Caisse de dépôt et placement du Québec (CDPQ) and PSP Investments said that despite notable risks, exposure to emerging markets like China was necessary to diversify pensioners' investments and mitigate overall investment risks.

At the time CPP Investments held 9.8% of its total assets in China, and saw the market as too big to ignore.

“As a global investor, we do feel it’s important to have exposure in China,” John Graham, chief executive officer of CPP Investments said in an interview days later.

“It’s important to understand the biggest economies in the world. And the way to understand them is to spend time studying them and investing in them.”

Despite Graham’s praise for the benefits of the Chinese market, a source close to the matter told AsianInvestor that CPP Investments was acutely aware of the significant geopolitical risks and is monitoring the situation closely.

The fund’s 2023 annual report also cites the tension between the two countries as a continuing risk to its portfolio.  

“U.S.-China and Canada-China relations remain tense, and uncertainty surrounding China’s regulatory and policy environment could negatively impact our investments,” says the report.


Meanwhile debate continues over the state of China's massive real estate market, which has remained sluggish despite recent policy stimulus.

In late July, the country’s top brass of the politburo pledged greater support for the property sector, paving the way for local governments to implement specific policies. But with new home sales slipping in July, significant cash flow issues for developers could arise.

Debt concerns are also looming, with one of China’s largest property developers Country Garden on the brink of default. Earlier this month, the developer missed two dollar coupon payments worth $22.5 million.

However, many investors and economists argue that such fears are overblown. They point out that dominant commercial banks in China remain strong, and the government has tools to intervene if necessary. A full-fledged bailout though, is unlikely.

While the Chinese banking sector has significant exposure to the property sector, a large portion of the loans are household mortgage loans, which are considered safe.

The risks appear to be concentrated in corporate bonds issued by developers and the shadow banking sector.

Investors are closely watching the situation, as any financial instability in the world's second-largest economy could have broader implications.

Some asset owners, such as CalPERS, are being cautious with their China exposure to avoid major losses. While the impact of the property debt issue may drag down economic growth over time, many experts now believe it is unlikely to cause a financial crisis.

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