Quebec pension giant hit by commercial real estate headwinds, braces for tariff turmoil

financialpost.com:

The Caisse de dépôt et placement du Québec posted a weighted average return of 9.4 per cent last year, which was below its benchmark portfolio’s 11.8 per cent return, with net assets rising to $473 billion.

The provincial pension and insurance manager’s results for the year ending Dec. 31 were helped by buoyant equity markets and the performance of technology companies, but hurt by challenges in the United States office segment of the commercial real estate sector.

However, the Caisse beat benchmark returns over five and 10 years, posting an annualized return of 6.2 per cent over five years compared to the benchmark of 5.9 per cent. Over 10 years, the return was 7.1 per cent, above the benchmark portfolio’s 6.5 per cent return.

Meanwhile, the base plan of the Québec Pension Plan, which represents the pensions of more than six million Quebecers and is the largest fund invested with the Caisse, posted a return of 11 per cent.

“While uncertainty is high, particularly due to ongoing tariff negotiations, discipline and the sound diversification of our portfolio will remain key to delivering the long-term returns our depositors need,” said Charles Emond, chief executive of the Caisse.

“Their plans remain in excellent financial health, and our results for one, five and 10 years have made a significant contribution, despite the turbulence.”

Emond said the market environment last year was characterized by the vitality of the U.S. economy, rising long-term bond yields and a historic level of concentration in the main stock indexes that were boosted by technology companies.

“During this period, our performance was driven by our equity market, private equity and infrastructure activities, but was affected by persistent headwinds in