SYDNEY—After a year in which tens of billions of dollars fled global hedge funds as investors flagged disappointing returns and high fees, the industry is in need of friends. It still has one in Canada’s largest pension fund.

CPP Investment Board, which ranks among the world’s 10 largest pension funds, has around 10% of its 298.1 billion Canadian dollars (US$227.5 billion) in assets invested with external fund managers.

“As an asset class, it’s been pretty attractive for us. The returns have been very positive,” Alain Carrier, CPPIB’s head of international, said Tuesday.

Several pension funds and endowments have opted to yank money out of the sector recently. CPPIB’s approach is to dedicate a team to analyzing hedge-fund performance, which allows it to quickly cut its losses and move on to better-performing funds, Mr. Carrier said.

“We spend a lot of time making sure that we invest in the right hedge funds and that we hold them to their performance standards,” he said.