With all of its portfolios performing well, La Caisse de dépôt et placement du Québec was able to record a 5.9 percent return for the six-month period ending June 30, as well as an annualized return of 10.2 percent between 2011 and 2014, exceeding its benchmark in both instances.
“Over a four-year reference period, La Caisse has achieved solid results, exceeding both our clients' long-term needs and our benchmark indices,” said Michael Sabia, the Canadian pension fund's president and chief executive.
“Like all investors, La Caisse has certainly benefitted from bull markets that have been fueled by stimulative monetary policies. But beyond market growth, our teams have identified the right strategies and they have deployed them rigorously,” he said.
La Caisse ended the first half of 2015 with net assets of C$240.8 billion (€166.0 billion; $183.7 billion), a C$14.9 billion increase since December 31, 2014. This growth is attributable to net investment results of C$13.1 billion, in addition to net deposits of C$1.8 billion, the fund said in a statement.
Net investment results over the four-year period totaled C$75 billion, with all portfolios making a positive contribution. “These strong results are attributable to several factors, including private debt and credit activity, real estate debt activity, the repositioning of the Canadian equity portfolio toward absolute-return management, the strategy aimed at selecting quality securities, and the performance of our private equity, real estate and infrastructure portfolios,” La Caisse said.
The pension fund's inflation-sensitive portfolio, which comprises real estate, infrastructure and real return bonds, generated a return of 11.9 percent, slightly below its 13.9 percent benchmark. For the six month-period ending June 30, it recorded a 4.6 percent return, generating net investment results of C$1.6 billion.
La Caisse did not provide individual results for its infrastructure portfolio specifically. A spokesperson had not responded to a request for comment at press time.
“Continuing to do well will be even more challenging in the months and years to come,” Sabia said. “Against a backdrop of high asset valuations and growing economic and geopolitical risks, we will need to be even more rigorous in choosing our investments. We will need to raise our game and to innovate to find the most attractive investment opportunities,” he added.
One example of La Caisse's innovative approach in the past six months is the launch of CDPQ Infra , a wholly-owned subsidiary that will act as the owner-operator of major infrastructure projects. The new subsidiary is the result of an agreement struck between the pension fund and the government of Quebec earlier this year . Two projects that are already under consideration are a public transit system on Montreal's new Champlain Bridge and a public transit system linking downtown Montreal to the Montreal-Trudeau International Airport and the West Island.
La Caisse, which serves 32 depositors – primarily public and private pension and insurance funds in Quebec – has been investing in infrastructure for the past 15 years. It officially launched its infrastructure programme in 2003. As of December 31, 2014, its infrastructure portfolio totaled C$10 billion, representing approximately 4 percent of the fund's total assets under management.