Shortly after Rachel Reeves became UK chancellor, she urged the UK pension sector to study Canada’s model while heading to Toronto to meet the leaders of the nation’s biggest plans. Canada has long guided global pensions, especially through the Canada Pension Plan Investment Board, the world’s seventh‑largest fund. That model relies heavily on direct stakes and in‑house management of assets.

The CPPIB has delivered 5.9% real‑term returns over the last decade, yet its latest annual report shows a 7.8% net gain that trails benchmarks by 5.4 percentage points—its longest underperformance streak since 2007. Private‑equity holdings, 24% of the portfolio, added only 2% after fees and have under‑performed expectations over five and ten years, eroding value for members.

Underlying causes include a sluggish private‑equity market: deals and exits lag, with $172bn of mergers and acquisitions signed in the first quarter of this year—a 36% drop from the prior quarter and 8% from a year ago. Bain’s data shows fund managers now hold stakes for roughly seven years before exit, up from five‑six years in 2010‑21, squeezing returns.

For investors, the dip signals a need to reassess the long‑term value of Canada’s internally managed model. While the country still holds the third largest pension wealth globally, CPPIB’s recent drag may prompt a shift toward external managers or diversified strategies to safeguard member returns. The fund’s performance will be a key benchmark for other large pension plans worldwide.