The Caisse de dépôt et placement du Québec is reporting a net return of 7.2 per cent for 2023, with net assets increasing to $434 billion.
The investment organization’s year-end report said public equities returned 17.7 per cent in 2023, driven by large U.S. technology stocks as well as growth stocks and the Caisse’s large positions in Quebec-based companies.
Read: Caisse returns 4.2% in first half of 2023, boosted by exposure to tech sector
Fixed income returned 8.1 per cent, in line with its benchmark index of 7.7 per cent, said the report, adding 10-year bond yields fluctuated between 3.3 per cent and five per cent throughout the year. It noted this return was partly attributable to the portfolio’s positioning in government debt, which benefited from lower rates in certain emerging countries, good execution in corporate credit and premiums on private debt that foster a high current return.
While infrastructure, driven by investments in transportation and renewable energy, returned 9.6 per cent, private equity returned just one per cent for the year, partly attributable to increased financing costs. This slowdown was expected after the portfolio produced considerable returns in recent years, said the report, noting health-care investments were hit particularly hard after the sector returned to normal activities following the end of the coronavirus pandemic.
Real estate returned negative 6.2 per cent due to economic challenges and structural issues in sectors such as commercial office space.
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In a call with media on Thursday, Charles Emond, president and chief executive officer of the Caisse, said that while the institutional investor weathered a range of market conditions over the last four years, its portfolio has grown by nearly $100 billion over the period.
“We may reach a crossroads in the year ahead, with many central banks likely to pivot, but the scope and sequence remain unknown. With a backdrop of downward but persistent inflationary pressure combined with lingering volatility, our portfolio remains well positioned to keep delivering the long-term returns our depositors need.”
Read: Caisse reporting -5.6% return for 2022, expects 2023 to be a ‘year of transition’