A Strong Reverse in Sight！Sino-Canadian Securities JointVenture Direct Investments Seeking Superstar Investment Return in OverseasChinese Concept Stocks

China AMC

The Corporation holds a 10% interest inChina Asset Management Co. Ltd. China AMC was established in 1998 and was oneof the first asset management companies approved by the China SecuritiesRegulatory Commission. It is recognized as a leading company in the Chineseasset management sector.

CITIC 21CN (00241.HK)  +0.020 (+0.375%)   announced that in the Extraordinary GeneralMeeting held yesterday, shareholders approved with 96.46% vote for theinvestment of Alibaba and YF Capital.

In January, CITIC 21CN proposed to place4.423 billion new shares, accounting for about 54.3% of the enlarged sharecapital, to Alibaba and YF Capital for $0.3 per share. Upon completion, Alibabawill hold 38.1% of CITIC 21CN, becoming the largest shareholder.

CITIC Pacific

The Corporation holds an approximately 0.6%interest in CITIC Limited, a public corporation whose shares are listed on theHong Kong Stock Exchange. CITIC Pacific was renamed CITIC Limited after theacquisition of substantially all of the assets from China CITIC GroupCorporation on August 25, 2014. CITIC Limited is a diversified company withbusiness interests in financial services, resources and energy, manufacturing,real estate and infrastructure, engineering contracting, and other businessesin China and around the globe. Through its listed subsidiary CITIC SecuritiesCo. Ltd., CITIC Limited controls China Asset Management Co. Ltd.

Investment Platforms

Sagard Europe

Sagard SAS, a wholly owned subsidiary ofthe Corporation based in Paris, manages 3 private equity funds in Europe,Sagard Private Equity Partners (Sagard 1), Sagard II and Sagard 3. SagardEurope invests, as a core investor, in mid-sized private companies operatingprimarily in France, Belgium, Luxembourg and Switzerland.

Sagard United States

Sagard Capital Partners Management, aU.S.-based wholly owned subsidiary of the Corporation, invests in mid-cappublicly listed companies in the United States.

Sagard China

Power Corporation is also involved inselected investment projects in China and, in October 2004, was granted alicence to operate as a Qualified Foreign Institutional Investor (QFII) in theChinese “A” shares market.

Power Corporation began participating inChinese equities through the Chinese stock market in 2005 and in the Hong Kongstock market in 2010.

Power Energy

Power Corporation established a newinvestment platform in 2012, Power Energy, with an objective to invest in therenewable energy sector. Power Energy invests in and develops energy companiesthat can provide stable and growing long-term recurring cash flows.

Power Energy currently holds investments intwo companies: Potentia Solar, a rooftop solar power producer based in Ontario,and Eagle Creek Renewable Energy, a U.S.-based owner and operator of hydropowerfacilities.

Private Equity and Venture Capital Funds

Power Corporation has invested for manyyears in third-party private equity funds and hedge funds.

Canada Pension Plan fund tops $200-billionfor first time

JANET MCFARLAND

The Globe and Mail

Published Friday, Feb. 14 2014, 9:55 AM EST

Last updated Friday, Feb. 14 2014, 11:22 AMEST

The Canada Pension Plan fund has topped the$200-billion mark for the first time, pushed higher by stock market returns inits last fiscal quarter.

The Canada Pension Plan Investment Boardsaid Friday it earned a return of 5.9 per cent in the quarter ended Dec. 31,which is the fund’s fiscal third quarter, pushing total assets under managementto $201.5-billion. It’s an increase of $8.7-billion from $192.8-billion at theend of September.

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CPPIB chief executive officer Mark Wisemansaid the fund had one of its best quarters ever, but said he prefers to focuson longer-term returns.

“The bottomline is that everything did well -- it’s one of those quarters,” he said in aninterview.

The fund said the 5.9-per-cent return added$11.1-billion in new income after operating costs. But it also paid out$2.4-billion toward benefits, leaving a net gain of $8.7-billion.

For the first nine months of the year, thefund earned returns of 8.9 per cent, boosting assets by $18.2-billion from$183.3-billion last March 31.

Mr. Wiseman said the gains in the pastquarter are due to “the exceptional performance of public equities” in thefund’s portfolio, but said all other asset groups also performance strongly.

“You’re goingto have quarters like this one where everything works -- our privateinvestments did well, our real estate investments did well, and obviously thepublic markets did well,” he said.

“We look atthat as further proof of the importance of having a highly diversifiedportfolio. You’re going to have quarters when everything does well, andquarters when everything doesn’t do well, but on average some things will dowell and some won’t and we’ll produce a long-term, high-quality, risk-adjustedreturn.”

CPPIB invests about half its holdings inequities, with 32 per cent in public stock market holdings and 18 per cent inprivate equity, which typically means taking ownership stakes in privatecompanies. A further 33 per cent of its holdings are in fixed income securitiessuch as bonds, and the remaining 17 per cent is in real estate andinfrastructure.

The fund’s 5.9-per-cent return in thequarter ended Dec. 31 was in line with other Canadian pension plans, whichearned average returns of 6.1 per cent in the final quarter last year,according to data from RBC Investor & Treasury Services.

Mr. Wiseman said the fund has an investmenthorizon that “extends over multiple generations” so is more focused onlong-term growth than returns in a single quarter.

“That’s whatwe’re focused on -- the 25 years, not the 90 days,” he said.

The Chief Actuary of Canada has calculatedthe CPP is sustainable at its current contribution rate for the next 75 yearsas long as it earns an average annual 4-per-cent real rate of return afterinflation.

The fund says its 10-year annual rate ofreturn after inflation is currently 4.9 per cent, so above the requiredthreshold.

Also Friday, Mr. Wiseman said he is happyabout news Thursday that the Toronto Stock Exchange will require all its listedcompanies to develop so-called majority voting policies, which requiredirectors to tender their resignations if they fail to win majority support inannual board elections.

Shareholders such as CPPIB have advocatedthe change for years, arguing the current system is undemocratic becauseshareholders can only vote for a director, or withhold their votes so they arenot counted, but cannot vote against anyone. It means directors can be electedwith even a single vote.

“It’s aboutshareholders having a right to elect directors, and it’s simply a question offairness in terms of shareholders being able to properly exercise their rightsin terms of who goes on the boards of directors of companies they own,” Mr.Wiseman said. “This is very positive news in our view.”