Diversification Is an Act of Humility: CPP Investments' John Graham on Running $800B for 22 Million Canadians
Key takeaways from In Good Company (Norges Bank Investment Management) interview with CPP Investments CEO John GrahamDealroom has a profile for this one. Try Dealroom →, hosted by NBIM's Nicolai Tangen:
$800B, and 70% of it is investment income. CPP Investments manages roughly $800B for the Canada Pension Plan; its first cheque 27 years ago was $12M, and $550B of today's total is investment income — a demonstration of long-run compounding. Its legislated mandate: maximise return without undue risk of loss.
Pension plan, not a wealth-maximising vehicle. Unlike a sovereign wealth fund, CPP has liabilities — a promise to 22 million Canadians. Graham says that at times (arguably now, given market concentration) the fund will give up some upside to protect the downside.
Total portfolio approach. The fund avoids hard asset-class or country allocations, thinking instead in factor space (duration, inflation sensitivity) — Graham doesn't view public and private equity as different asset classes, just different ownership structures.
“Diversification is an act of humility.” He frames diversification across asset classes and geographies as fundamentally a risk-management tool: “We don't know.”
Still a believer in private equity. Despite a tougher couple of years, PE has been one of the biggest return drivers over 10–15 years; Graham backs the private governance model via a partnership approach — investing with the best managers, then co-investing and co-underwriting at advantageous economics.
Geographic focus and hard limits. CPP has exposure to ~50 countries but is only truly active in ~12; ~45–50% sits in the US (which it actively manages down) and ~12% in Canada. It has never blanket-divested (it still backs oil and gas) but has never directly invested in crypto — “that's been pretty good lately.”
AI: faster decisions, better decisions still TBD. CPP has rolled out multiple LLMs to every employee with training and bootcamps. Headcount is roughly flat over three years while assets grew ~$300B — operational leverage — but Graham insists it's “madness” to stop hiring juniors, and remains unconvinced AI yet makes them better investors.
Leadership: purpose over stars. Graham — a former experimental scientist who calls investing “a quantitative art,” not a science — says CPP is the opposite of a founder culture and can't build around individuals; his hardest lesson is that leaders wait too long to get the right senior team in place.
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