Summary:
The article summarize about Canada Pension Plan Investment Board have buy eight malls to invest to their company. The Canada Pension Plan Investment Board is a federal Crown corporation that collects funds not needed by the Canada Pension Plan and using it to invest. The Canada Pension Plan is a earnings-related social program that recommend people who are 18 years or older to contribute some of their earnings to them and in exchange they will get benefits when they are older. They now own 100% ownership to six malls and 90% ownership to two malls which bring a total of 333.5 millions in investment. The money they got to purchase the eight malls is from a past investment which equal up to 230.5 million dollars and they also get 105 million dollars in a loan. They want to invest in malls because it would help expand their company in Canada and it would also boast their assets in their company too. CPPIB have invested many of their real estates around the world like Asia, United States, Mexico, and continental Europe. All of their real estates have added up to 7.9 billion dollars and 3.6 billions belong to Canada. They also have invested everything from public and private equities to real estates, infrastructure, and fixed-income instruments.
Connections:
The article show examples of financing, operating, and investing activates. One connection is when CPPIB got a loan of 105 million dollars to purchase the eight malls is a perfect example of financing activities because they decide to borrow money to help expand their corporation. Also accordingly to chapter 1 this decision of borrowing money can decide whether the corporation will grow and make profit or they will make a bad investment in this situation. Another connection is CPPIB invests everything from public and private equities to real estate, infrastructure and fixed-income instruments is a perfect example of operating activities because they are using their investments to earn revenue. The last connection is CPPIB investing on the eight malls is a perfect example of investing activities because they must spend a lot of money to purchase the properties (eight malls) and to generate assets to be used in operating activities.
Reflection:
CPPIB is a corporation that is owned by the government which means people who are 18 years or older must contribute a prescribed portion of their earnings to the Canada Pension Plan. But the funds not needed from the Canada Pension Plan is used to invest to the CPPIB so they basically take that extra funds and invest it to get more revenue for them. Basically I think that people shouldn’t trust anything the government supplies to us because they’re just taking our money we give to get benefits and using the extra funds to invest and get revenue for them not for us. Also does CPPIB have enough money to supply elderly people because by the time we get older is there any funds left for us? I think the pension plan would give us a small amount of benefits back than today because they basically try to get gain as much profits as they can and only giving elderly people small amount of it.
