After emerging from the horrors of 2008, the folks at the Caisse de dépôt et placement du Québec were no doubt looking to 2009 with sunny thoughts. The asset-backed commercial paper nightmare was over, Fernand Perreault replaced ailing Richard Guay as chief executive officer (CEO), and the hunt was on for a new president.
Then came word of a loss of nearly $40 billion—almost twice that of other Canadian fund managers—followed by rumours of political interference from the Quebec government. Exit Perreault as CEO and enter former Gaz Métro boss Robert Tessier as chair of the Caisse. Tessier’s first order of business was to find a new CEO—no small feat considering the Caisse’s significance as a symbol of Quebec nationalism and independence.
The candidate short list had barely touched his desk when Tessier announced his choice. He didn’t even bother interviewing the other contender after seeing Michael Sabia’s name, so confident was he that Sabia was the right man for the job. Although Sabia had no experience in the finance and investment industry, his successful turnaround of CN and BCE has shown him to be a decisive leader.
Cue the politics. Although Sabia has called Quebec home for 16 years, his appointment was labelled a “provocation” by Bernard Landry and a “takeover” of the Caisse by Ottawa by Jacques Parizeau (one of the architects of the Caisse). And Sabia’s inadvertent reference to the “Caisse de défauts” in a French-language interview didn’t help him to gain supporters. It was a rough welcome to the country’s most politicized pension fund.
However, Sabia seems to want to put the controversy behind him. “The past isn’t particularly interesting to me,” he told reporters after being named CEO. “What interests me is the future, and the steps we’ll take to strengthen the Caisse.” Whether that involves adjustments to the use of derivatives and currency hedging that got the Caisse into trouble is yet to be seen, but judging by his past performance, Sabia seems committed to accomplishing what he sets out to do. “I think we live in a ‘show me’ world,” he said. “Not a ‘trust me’ world.”
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