HIGHLIGHTS: John Graham - CEO of CPP Investments

Summary

Podcast Summary: HIGHLIGHTS: John Graham – CEO of CPP Investments

Podcast: In Good Company with Nicolai Tangen
Host: Nicolai Tangen (CEO, Norges Bank Investment Management)
Guest: John Graham (CEO, Canada Pension Plan Investment Board)
Date: July 10, 2026

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Overview

This episode features John Graham, CEO of CPP Investments (CPPIB), one of the most respected and influential pension fund managers globally, handling over $800 billion in assets for 22 million Canadians. The conversation explores the foundational principles of the Canadian pension model, the organization's distinctive investment approach, perspectives on asset classes like private equity, the evolving role of AI, and Graham’s philosophies on learning from failures.

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Key Discussion Points & Insights

1. The Canadian Pension Plan Model

[01:02–02:59]

• Structure & Genesis:

  • CPP Investments is the third-party asset manager for the Canada Pension Plan—a mandatory, inflation-protected, defined-benefit program for all working Canadians, akin to US Social Security.
  • The plan faced an existential threat about 30 years ago due to demographic shifts (aging population, fewer children, longer life expectancy) and was thoroughly restructured.
  • Quote:

    “People living longer is obviously a good thing. But the plan was on a path to being exhausted.”
    — John Graham [01:37]

• Management Mandate:

  • The fund transitioned from pay-as-you-go to a partially funded model, with CPP Investments responsible for investing surplus funds not needed for immediate benefit obligations.
  • The plan started with a $12 million investment and now manages approximately $800 billion.

2. Mandate and Investment Approach

[03:06–04:54]

• Mandate:

  • Federal legislation directs CPPIB to “maximize return without undue risk of loss, accounting for factors that impact the funding of the plan.”
  • Unlike Norges Bank, which receives specific strategic asset allocation instructions, CPPIB has full discretion and responsibility for portfolio construction.

• Strategic Decisions:

  • The three core decisions revolve around risk appetite, asset allocation, and deploying a total portfolio approach.
  • 70% of today’s $800B fund represents investment income, demonstrating the power of compounding.
  • Quote:

    “So 70% of the fund is investment income. And so we only own the entirety of the investment process.”
    — John Graham [04:13]

3. Views on Private Assets

[04:54–06:10]

• Private Equity & Credit:
  • CPPIB is a leader in private market investments globally.
  • Over the past decade, private equity has been among the greatest drivers of portfolio returns, despite recent underperformance.
  • Graham remains a believer in the private governance model, emphasizing the value of active investor engagement and the advantages of companies operating outside the public eye.
  • Quote:

    “At certain points in time private ownership makes a lot of sense.”
    — John Graham [05:41]

4. The Role of AI at CPPIB

[06:10–07:53]

• Operational Impact:
  • CPPIB is proactively increasing AI literacy and fluency across the organization, rolling out LLMs and running boot camps for employees.
  • AI is mainly enhancing operational efficiency rather than directly delivering better investment decisions—at least for now.
  • Quote:

    “Has AI made us a better investor? Have we made better investment decisions because of AI at this point? TBD at this point, unclear.”
    — John Graham [07:34]

5. Failure and Learning

[07:53–09:37]

• Openness to Mistakes:
  • Graham emphasizes that investing naturally involves failure and humility.
  • Persistent diligence or over-structuring cannot turn a fundamentally bad investment good.
  • He encourages young investors to recognize when to walk away and avoid the illusion that more analysis can salvage poor choices.
  • Quote:

    “You can’t diligence a bad investment into a good investment.”
    — John Graham [08:41]

  • Quote:

    “Sometimes you have to know when to quit, and you have to know when to back away from an investment.”
    — John Graham [09:09]

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Notable Quotes & Memorable Moments

• On the transformation of the CPP and power of long-term compounding:

  “Our very first check was $12 million about 27 years ago. Today the plan sits about 800 billion.”
  — John Graham [02:38]

• On private markets:

  “I continue to be a believer in the private governance model...Having the investors be very actively engaged from a governance perspective on the board.”
  — John Graham [05:32]

• On technology adoption:

  “We have rolled out multiple LLMs to every single employee… Pretty good, I think actually very good, adoption at the grassroots.”
  — John Graham [06:38]

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Timestamps for Important Segments

| Segment Topic | Timestamp | |:---------------------------------------------------|:-----------:| | The Canadian Pension Plan Model | [01:02] | | Mandate & Investment Approach | [03:06] | | The Power of Compounding and Portfolio Growth | [04:00] | | Private Assets: Private Equity & Credit | [04:54] | | The Role and Impact of AI | [06:10] | | Lessons from Failures & Investment Philosophy | [07:53] |

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This episode provides a concise yet substantial look into the values and strategies guiding one of the world’s premier pension funds, offering real-world lessons in long-term investing, organizational adaptation, and personal leadership. John Graham’s characteristic candor about setbacks and learning paves the way for a transparent and humility-driven investing ethos.

Transcript

[A]

Hi everybody.

[B]

Tune in to this short version of the podcast which we do every Friday. For the long version, tune in on Wednesdays. Hi everyone. I'm Nicola Tangen, the CEO of the Norwegian sovereign wealth fund. And today I'm joined by John Graham, the CEO of cppib, which is the Canadian pension fund, basically looking after the savings of 22 million Canadians. Now, CPPIB is one of the most respected pension funds in the world. And the Canadian model has become a blueprint globally. Now what makes John stand out is that he is a scientist first who found his way into one of the world's great financial institutions. And I'm really curious to dig in what your scientific mindset brings to investing. John, so big. Thank you for joining us.

[A]

Well, thank you for having me lot to cover.

[B]

Absolutely. Now first of all, could you help us understand what the Canadian pension plan is? Just how is it different from a fund like ours?

[A]

Sure. So CPP Investments were the third party asset manager for the Canada pension plan. The Canada pension plan is the mandatory program that all working Canadians contribute to. So it'd be somewhat similar. People are in the US to social media security. So it's meant to provide a inflation protected defined benefit for working Canadians. How big is it today the fund, the CPP Fund, is around $800 billion, but it actually is a hybrid plan. So just one of the things I think is important to appreciate because it really has a big influence on how we manage the money is about 30 years ago, the Canadian government realized that the CPP at its current contributions and benefit rates was on a path to be exhausted. And this was because it was a pay as you go program. Money comes in immediately goes out, and demographics were changing. You had a aging population, you had people having fewer kids, people living longer. People living longer is obviously a good thing. But the plan was on a path to being exhausted. So they restructured the plan, they increased the contribution rate, modified benefits, and they created CPP Investments as the money manager to invest the funds, the surplus funds that aren't immediately needed to pay out benefits. And I think what's when we started out that plan is it was about 15% funded. So really it was still a pay as you go plan. And over time, our very first check was $12 million. So we got a check for $12 million about 27 years ago. Today the plant sits about 800 billion and the plan is partially funded.

[B]

So here you are, 800 billion. Just how do you decide where the money goes? How do you decide how to split

[A]

the asset classes so we are very linked to our, our mandate, Max. Our mandate enshrined in federal legislation is to maximize return without undue risk of loss, accounting for the factors that impact the funding of the plan. That's our mandate and said that you got to invest the money, maximize return, try to grow the funding ratio of the, of the plan and make sure that we can meet these obligations or these promises that have been made.

[B]

And you don't have like we have a mandate which the ministry gives us, which tells us, you know, how much shares, how much bonds, you don't have

[A]

that, we don't have that. Literally our mandate is maximize return without undue risk of loss, taking into account the factors that impact the plan.

[B]

So, you know, here you are, John Graham, 800 billion. Go and see what you can do with it.

[A]

Well, it started as 12 million and now it's 800 billion. And of that 800 billion, 550 billion is investment income. It does show the power of compounding. Right. So 70% of the fund is investment income. And so we only own the entirety of the investment process. So to be a little bit technical, we take that and think there's kind of three big decisions we make and we take a total portfolio approach and fundamentally we try to maximize the total return of the total portfolio. So the first big decision, what level of risk are we going to take? What level of risk will maximize return without undue risk of loss? How do we thread that needle of taking our time horizon? So recognizing, and I think this is really important, we're a pension plan, we're not a wealth maximizing vehicle.

[B]

One asset class, where you are, where we are not is private assets. So private equity, private credit. Now you have one of the largest private market portfolios or anybody in the world. So what is your view on that asset class just now?

[A]

Yeah, so I think we have to take a long term view and private equity undoubtedly has had a more challenging couple years. We can get into that. But if I look over the past 10, 15 years, it's been one of the biggest drivers of return for the portfolio. I personally continue to be a believer in the private governance model. I think for certain companies at certain times in their life cycle, private ownership makes a lot of sense. Getting out of the scrutiny of the public markets, having the investors be very actively engaged from a governance perspective on the board of directors. I think there's, at certain points in time private ownership makes a lot of sense. So we continue to be constructive on private equity. Recognizing though that right now the returns has Been well documented over the past couple of years, have not been at expectations, but if I look over 10, 15 years, it's been a big driver of value for CPP investment.

[B]

How does AI change the way that you run your organization?

[A]

That's a good question. That's a good question. I mean, I think we're figuring it out like lots of people and probably go through lots of peaks and troughs and thinking about the impact of AI as an organization. We certainly have prioritized literacy and fluency, certainly prioritize trying to have a employee base that is very fluent in the tools and the technologies. So we have rolled out multiple LLMs to every single employee in the organization, and we have provided training, we've provided courses, and in fact, we have these kind of boot camps that employees can sign up for. So we've seen pretty good adoption. Pretty good, I think, actually very good adoption at the grassroots level from AI, more senior level. There's probably half a dozen processes we're thinking through on where can we really embed AI to do it more efficiently, more effectively, but a little bit more from the operations side. Has AI made us a better investor? Have we made better investment decisions because of AI at this point? TBD at this point, unclear. But we are dedicating a lot of time and effort to figuring that out.

[B]

Now, our listeners are. When we, when we kind of poll them and ask them how they want to. What. What do they want to have more of? In the podcast, they say they want to hear more about failures. You know, we only talk about successes and everything is so great. And, you know, tell me about some of your biggest mistakes in life.

[A]

So. My big failures?

[B]

Yeah.

[A]

Okay. Well, I think, as you know, in investing, you do have the opportunity to have failures and you have the opportunity to be humbled. And any investor who says they haven't been humbled is probably not either taking a lot of risk or is not being overly truthful. So certainly some of the investments I've been actively engaged on have not turned out as planned. So what have I learned from that? One of the things, and one of things I try to tell our younger colleagues too, which I do believe is you can't diligence a bad investment into a good investment. Spending another week is not going to turn a fundamentally bad investment into a good investment. And in fact, you may just convince yourself that it is. And sometimes you have to know when to quit, and you have to know when to back away from an investment. If I think about where mistakes I made and failures I had just this belief that if you just did more work, if you just structured it, or you could take a bad investment, if you could just structure it a little bit more, you could turn it into a good investment.

[B]

What's the worst one you had?

[A]

I'm not going to name the name of it.