Canada Pension Plan Investment Board Chief Executive Officer David Denison said he expects to complete more commercial real estate transactions after the fund made its first investment in the Manhattan market.

Canada’s second-biggest manager of retirement funds agreed in May to buy a 45 percent stake in 1221 Avenue of the Americas from SL Green Realty Corp. for about $576 million including debt. It also worked with SL Green to buy a 45 percent stake in 600 Lexington Ave. for about $87 million.

“We’ve looked at Manhattan for five years; I’ve lost track of how many building opportunities we’ve looked at,” Denison said today in a telephone interview. “We’ve never felt that the pricing was sensible for that market. Now we’re starting to see some very good pricing in Manhattan.”

Denison, whose pension fund today posted a 1.3 percent decline on investments in the fiscal first quarter, said the outlook for real estate transactions is “quite good” for the next year to 18 months.

Canada Pension Plan Investment Board also said it will continue investing in emerging markets, such as India, China and Brazil.

“We see that as an important area of focus for our fund,” Denison said. “They’re important markets for us to be involved with, learning, putting some capital to work.”

The investment board lost C$1.7 billion ($1.63 billion) in the quarter ended June 30, the Toronto-based manager said today in a statement. A drop in government stimulus efforts and higher “concern about economic conditions in Europe” led to declines in global stock markets, the fund said. Canada’s benchmark Standard & Poor’s/TSX Composite Index declined 6.2 percent in the quarter.

Credit Markets

Denison said challenges in international credit markets will hamper the manager’s ability to complete private-asset transactions.

Canada Pension last month offered A$3.47 billion ($3.2 billion) for Intoll Group, an Australian toll-road operator. The fund and Onex Corp. also agreed last month to buy auto parts firm Tomkins Plc. for about $4.5 billion.

The fund, which includes investment earnings and contributions not needed to pay current pensions, had C$129.7 billion in assets at the end of June. That’s up from C$127.6 billion at the end of March. The fund, which manages pensions for 17 million people in Canada, returned 15 percent last fiscal year.

Source: http://www.bloomberg.com/