Canada Pension Plan Investment Board Triples Its $300m Skype Investment

With Microsoft confirming its outright purchase of Skype for $8.5 billion today (to possibly rival FaceTime), we noted last night the Canada Pension Plan Investment Board was expected to gain a notable return on investment. This should come as fantastic news for Canadians.

The CPPIB invested $300 million in September of 2009, with Morgan, Barclays, and RBC Dominion Securities helping advise and finance the investor group in their decision. The decision to invest in a technology company such as Skype was questionable at the time, but it looks like the gamble has paid off.

According to Mark Wiseman, executive vice president of investments for CPPIB, after the settlement of a patent infringement suit in November 2009, the pension plan’s stake in Skype was diluted to 11.7%.

CPPIB’s share of the US$8.5-billion price tag for Skype stands at just North of US$933-[million], Mr. Wiseman said.

“We’re obviously delighted with the outcome,” he said in an interview.

This massive ROI is a result of the CPPIB taking a calculated risk in Skype, and will help maintain steady growth of the CPP. We should all be saying this for once: thanks, Microsoft.


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