Quebec's Caisse de depot bets on quant strategies and is bullish to do more

financialpost.com:

Quebec’s public pension fund manager has grown its quantitative equity team to more than US$14 billion of assets in less than four years, and one of its top executives is bullish on doing even more.

Data-based strategies are helping Caisse de depot et placement du Quebec (CDPQ) bring new rigour and ideas to the fund’s stock portfolio, Vincent Delisle, the firm’s head of liquid markets, said.

“Our quant team has outperformed in the last three years, so we are quite happy with their contribution to the portfolio,” Delisle said, though he declined to give specific return figures.

CDPQ isn’t the only large money manager relying more heavily on quantitative-driven strategies. Abu Dhabi’s US$1 trillion wealth fund is using a 125-person division of data scientists to guide in-house investing, officials said in rare public comments to Bloomberg News. Vanguard Group Inc., famous for its index funds and ethos of low-fee investing, has been using machine learning across a number of active stock funds.

Delisle, who previously worked at Bank of Nova Scotia in equity research and quantitative strategy roles, jumped to the US$452 billion investment manager in 2020 as part of an overhaul by new chief executive Charles Emond, himself a former Scotiabank executive.

Among the biggest changes that followed was a shift toward technology stocks. CDPQ was underexposed to the sector when the COVID pandemic hit, missing out on some of the huge gains made by big-cap tech companies during the period of ultra-low interest rates. “We have to make sure that our portfolio takes a digital turn to follow the economy,” Emond said in August 2020.

That same month, Delisle took up his role at CDPQ. Under the radar, he set up a quantitative team that has now