CPP Investments, the investment arm of Canada Pension Plan Investment Board, has appointed John Graham, the organisation’s former global head of credit investments, as its new chief executive officer.
Graham replaces Mark Machin, who departs under a cloud, having been accused in media outlets of jumping Canada’s covid-19 queue by flying to get a jab in the United Arab Emirates. “After discussions last evening with the Board, Mr Machin tendered his resignation and it has been accepted,” said a CPPIB statement.
So who is John Graham? Plenty of clues can be found in a wide-ranging interview Private Debt Investor conducted with him in late 2019 (read the interview in full here). One of the notable things about Graham is his unconventional background, having spent almost a decade as a research scientist at US business services firm Xerox, having gained a PhD in physical chemistry.
On the face of it, it was quite a sharp change of direction – and arguably a tough transition – when Graham joined CPPIB’s portfolio design group around 14 years ago. But he insisted to PDI that there was more of an overlap than met the eye: “It seems appropriate to view that as a stark shift but actually I think it was somewhat gradual because what I was brought in to do at CPPIB was somewhat quantitative, very analytical and involved a lot of problem solving – all skills I had developed in my prior career.”
From the portfolio design group, which mutated into the total portfolio management unit, Graham became part of the organisation’s push into credit. From a standing start when he joined the private debt group, it had soon become a major force in the market, racking up C$36.6 billion ($27.6 billion; €22.7 billion) in assets under management by March 2019.
Graham stayed with credit through various reorganisations which expanded the empire; renamed as “the principal credit investments group” and then the shortened “credit investments group”, it ended up bringing together all credit-related activities including in real estate debt and public credit. Rising swiftly through the ranks, Graham took on business management and portfolio strategy roles before becoming head of principal credit investments in 2016 and then head of the credit investments group.
A major preoccupation of Graham’s at the time of our interview was making the business genuinely global, including expanding into Asia-Pacific. “We really need to be a global investor,” said Graham. “We need to have the capabilities, the infrastructure and the relationships to invest around the world, and building out our business in Asia is about building a long-term, sustainable business. It’s not about deploying money tomorrow, it’s about creating something for the next 10 or 20 years.” Given that most of that time period remains, it can be assumed that this is still a key focus for Graham.
At the time, Asia-Pacific was only accounting for around 15 percent of CPPIB’s credit portfolio but Graham was keen for that proportion to grow bigger and was spending (in pre-covid times) around three months of the year in the region. China and India were the main focus, with Australia also a market the organisation was interested in.
Graham is a fan of bringing different strategies together to create synergies – which explains the different iterations the credit group went through.
Mainly a direct investor, CPPIB also has a fund strategy. Notably, Graham was instrumental in the acquisition of Chicago-based fund manager Antares Capital in 2015. Reflecting on the deal, Antares chief executive Dave Brackett told us: “Canadian pensions are widely held in high regard. We’ve benefited highly from the sterling reputation they have.”
In CPPIB’s case, that reputation may have taken a bit of a knock this week, but it will be hoping that Graham can fully restore it.