(Bloomberg) — Caisse de Depot et Placement du Quebec posted the highest returns since 2010 last year, with growth boosted by its private equity holdings and public stock portfolio.
The Montreal-based pension manager, Canada’s second-largest, returned 13.5% in 2021, exceeding its benchmark, according to a statement on Thursday. Investment gains stood at C$49 billion ($38.2 billion), pushing net assets to C$419.8 billion from C$365 billion a year earlier.
“This shows that our strategies are working and effectively taking into consideration today’s key challenges: the climate transition, the digitization of the economy and ongoing changes on the international stage,” CDPQ Chief Executive Officer Charles Emond said.
The fund has decided to sell all securities affected by Western sanctions being imposed on Russia in response to its invasion of Ukraine, Emond told reporters at a briefing Thursday. “It’s impossible not to be exposed to Russia,” he said. “The consequences will last beyond the conflict when it comes to the market, and we need to position ourselves accordingly.”
‘Good Positioning’
The fund’s private equity holdings returned 39.2% due to “good positioning in the technology, finance, health care and consumer sectors,” according to the statement. The fund earned 16.2% in equity markets and 14.5% in infrastructure, stemming from renewable energy and telecommunications assets.
The firm also took advantage of liquid markets last year and sold C$13 billion of private-equity assets, compared with C$10 billion in acquisitions.
CDPQ’s new investments included leading a $147 million financing round in Druva Inc., a California-based cloud data protection firm, and taking a majority stake in Wizeline Inc., a technology services supplier operating in several countries.
Investments also included a C$1 billion investment in Constellation — a property, casualty and life insurance platform — and taking a “significant” stake in Grupo Diagnóstico Aries, a Mexican medical diagnostic services group.
Separately, CDPQ expects to be under pressure this year because of high inflation and impending interest rate rises, the firm’s head of liquid markets, Vincent Delisle, said at the briefing. “For us, 2022 is a year where the increase in interest rates would go together with a slowdown of economic growth,” he said, adding the Russian invasion of Ukraine “complicates things for central banks.”
French Language
Based in Canada’s majority French-speaking province, CDPQ said it has scheduled meetings with all of the Quebec-based companies in its portfolio that have annual meetings, know locally as assemblies, to “put French in the middle of the equation,” Emond said. “If a company in Quebec has a general assembly only in English, and we have some of them that do that, that’s unacceptable.”
The move comes not long after Air Canada’s chief executive officer sparked a public relations disaster when he admitted he’s not comfortable speaking in French despite 14 years at the Montreal-based airline. That development prompted the CEO to issue an apology to Quebeckers, including including Quebec Premier Francois Legault and ministers in Justin Trudeau’s federal government.
(Updates with 2022 outlook in ninth paragraph)
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