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THE
WALL STREET JOURNAL.
Markets
Activists Beware: Huge Investors Debut New Long-Term Index
Investors will allocate $2 billion in the index to track shares of
companies that focus on long-term goals
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Mark Wiseman, chief executive of Canada Pension Plan Investment
Board in a file photo from January 2015. Mr. Wiseman says CPPIB
will invest slightly under $1 billion in the companies in the
long-term index. PHOTO: BLOOMBERG NEWS |
By
Charles Forelle
Jan. 21, 2016 4:30 a.m. ET
DAVOS, Switzerland—Six
large institutional investors said they would allocate $2 billion to
track a newly created index of shares of companies that focus on
long-term strategies.
The S&P Long-Term Value
Creation Global Index comprises 246 companies that meet criteria for
return-on-equity, leverage and other financial factors, as well as a
score for corporate governance.
“We are trying to use
the index to change corporate behavior,” said Mark Wiseman, chief
executive of the Canada Pension Plan Investment Board, in an interview
at the World Economic Forum here. Mr. Wiseman said financial markets
are too focused on short-term results.
Mr. Wiseman said CPPIB
would invest slightly under $1 billion in the companies in the index.
The five other institutions participating in the index’s launch are
Singapore fund GIC, Danish pension plan ATP, Dutch pension plan PGGM,
the New Zealand Superannuation Fund and the Ontario Teachers’ Pension
Plan.
He said he hoped retail
products would also be developed so that individual investors can
track the index. CPPIB, which manages C$273 billion ($188.23 billion),
will move funds from its passive stock-market investments to the new
index.
Mr. Wiseman also said
CPPIB has been “extremely busy” amid the market turmoil of the past
several weeks, saying battered asset prices are providing
opportunities.
“Up until the last year,
it was very hard to find value in the market,” he said.
Write to
Charles Forelle at
charles.forelle@wsj.com
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