The Caisse de dépôt et placement du Québec saw overall returns of 13.5 per cent in 2021, its best performance since 2010.
By the end of last year, the institutional investor’s managed assets reached $419.8 billion, up from $342 billion at the beginning of the year. The Caisse exceeded its own performance expectations by about $10 billion, having benchmarked annual returns to reach 10.7 per cent during the year.
On an annualized basis, the Caisse has seen 8.9 per cent returns in the past five years, having held just $149.1 billion in assets at the beginning of 2016. In the same period, gains from investments, at $141 billion, eclipsed growth from the $8.1 billion collected through deposits.
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In a press conference on Thursday morning, Charles Emond, the Caisse’s president and chief executive officer, said the performance of all portfolios was strong in 2021. Overall equity returns reached 24.6 per cent during the year, above the 22 per cent prediction. While fixed income generated losses of 0.6 per cent, it had benchmarked losses of 1.2 per cent.
He also noted that certain alternative investment portfolios had performed particularly well. Though expected to generate 11.4 per cent returns, infrastructure actually secured gains of 14.5 per cent. Real estate, which was predicted to grow in value by 6.1 per cent, actually grew by 12.4 per cent. And private equity made gains of 39.2 per cent, well above the 32.1 per cent gains predicted.
“Infrastructure and private equity generated exceptional returns, equity markets leveraged the benefits of the portfolio’s evolution, real estate’s repositioning yielded clear results and we successfully navigated a pronounced rate hike in fixed income,” said Emond in a press release.
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Despite the fund’s performance, the Caisse’s leadership team expressed some concern about the financial climate expected in 2022. Emond noted the institutional investor is expecting pandemic-induced imbalances, rising interest rates and growing inflation to increase the complexity of the business environment this year.
“Very disciplined execution of our strategy, rigorous investment selection and sound diversification will be essential to continue performing well in the coming years.”