Caisse de dépôt et placement du Québec : Growth, Strategy, and Performance

The Caisse de dépôt et placement du Québec is a Canadian institutional investor that has been a driving force in the growth and development of the province. It was established in 1965 by the Quebec government.

With assets under management of over $400 billion, the Caisse is one of the largest institutional investors in the world. Its scale and influence make it a significant player in the global economy.

The Caisse's growth strategy focuses on investing in Quebec's economy, with a goal of creating jobs and stimulating innovation in the province.

Caisse de dépôt et placement du Québec has a rich history dating back to 1965 when it was created by the Government of Quebec to manage the province's pension plans.

The Caisse was initially responsible for managing the Quebec Pension Plan, which was established in 1965 to provide a guaranteed income to Quebec residents in retirement.

In 1972, the Caisse took over the management of the Public Service Superannuation Plan, which provides a pension to Quebec government employees.

The Caisse's mandate expanded in 1982 to include the management of the Quebec Public Service Superannuation Plan, which provides a pension to Quebec government employees.

Today, the Caisse is one of the largest pension fund managers in Canada, managing over $400 billion in assets.

The Caisse's investment portfolio is diversified across various asset classes, including public and private equity, fixed income, and real estate.

The Caisse de dépôt et placement du Québec (CDPQ) has a diverse investment portfolio that spans several decades. In the 1980s, it started entering international markets and the real estate sector.

The CDPQ made its first transactions in global equities exchanges in 1983 and its first international private equity investment in Compagnie financière Martin Maurel, in France, in 1984. This marked the beginning of its expansion into global markets.

The CDPQ's geographic exposure is also noteworthy, with a significant presence in various regions. Here's a snapshot of its geographic diversification:

The CDPQ made its first transactions in global equities exchanges in 1983, marking a significant step into international markets.

In the 1980s, the CDPQ entered the real estate sector, acquiring its first office building, Place Delta in Sainte-Foy, in 1980.

Its first international real estate acquisition was the Centre de conférence Albert-Borschette in Brussels, in 1993, a notable milestone in its expansion plans.

The CDPQ diversified its real estate portfolio in the 1990s, acquiring the real estate assets of the Steinberg grocery chain in 1989.

In 1997, a legislative change increased the CDPQ's allowable equity allocation from 40% to 70% of its assets, providing a significant boost to its investment capabilities.

It also moved into infrastructure investment in 1999, with the construction of Highway 407 in Toronto, a major project that showcased its ability to invest in large-scale infrastructure projects.

A significant investment of 145 million dollars has been made in a fund focused on energy transition. This fund is backed by major investors.

The money comes from the Canada Growth Fund, CDPQ, Investissement Québec, and BDC Capital.

The CDPQ is a global investor with a diverse portfolio that spans various sectors and geographies. They have investments across different sectors and geographies, with a focus on infrastructure, real estate, and other asset classes.

One notable achievement is that the CDPQ ranked first in the 2023 edition of the Global Investor 50 list as the world's largest institutional investor in infrastructure. This recognition is a testament to their expertise and commitment to investing in critical infrastructure projects.

The CDPQ's geographic diversification is also impressive, with investments spread across Canada, the United States, Europe, emerging markets, and other regions. According to their portfolio breakdown, Canada accounts for 25% of their investments, while the United States accounts for 40%.

Here's a breakdown of the CDPQ's geographic exposure over the years:

The CDPQ's geographic diversification has evolved over the years, with a gradual shift towards international investments.

The Caisse de dépôt et placement du Québec (CDPQ) has a well-defined organizational structure. Its board of directors can have up to 15 members, two-thirds of whom must be independent.

The board is responsible for setting the CDPQ's main orientations and ensuring it follows all legislative and regulatory requirements. The position of chair of the board of directors is separate from that of president and chief executive officer.

The CDPQ's board of directors is appointed by the Quebec government, with consultation from the board itself. The board has also defined a profile of expertise and experience required for its independent directors.

The CDPQ's board of directors can have up to 15 members, with two-thirds of them being independent. This structure ensures a balance of perspectives and expertise.

The board is composed of its chair, the president and CEO, depositor representatives, and independent members. They work together to establish the CDPQ's main orientations and ensure adherence to legislative and regulatory requirements.

The position of chair of the board of directors is separate from that of president and CEO. This separation of roles helps maintain a clear chain of command and accountability.

The Quebec government appoints members of the board of directors, upon consultation with the board. This collaborative approach helps ensure that the board has the right mix of skills and experience.

The CDPQ's board of directors has defined a profile of expertise and experience required for its independent directors. This helps attract and retain high-quality board members.

The executive committee is composed of the president and CEO and the senior officers of the CDPQ's various sectors. This committee likely plays a key role in making strategic decisions and overseeing the organization's operations.

The CDPQ has three subsidiaries, which are Ivanhoé Cambridge, Otéra Capital, and CDPQ Infra. These subsidiaries are located in the Jacques-Parizeau building in Montreal.

Each of these subsidiaries plays a unique role in the CDPQ's operations, but their headquarters are all centralized in this one building.

The CDPQ's subsidiaries are a key part of its overall structure, and understanding their roles and locations can provide valuable insight into the organization's inner workings.

CDPQ has five key investment priorities: optimal performance, Québec economy, worldwide presence, sustainable investing, and technology. These priorities guide their investment decisions and strategies.

CDPQ has expanded its global presence by opening offices in key markets such as New York, London, Singapore, Mexico City, São Paulo, Paris, New Delhi, and Sydney. This strategic expansion has helped them tap into new investment opportunities and diversify their portfolio.

Over the years, CDPQ has demonstrated strong performance, with a notable rate of return in 1967 of 100%. Their net assets have grown significantly, reaching $1.7 billion in 1971 and $401.9 billion in 2022.

CDPQ has five investment priorities: optimal performance, Québec economy, worldwide presence, sustainable investing, and technology.

The CDPQ has expanded its global presence by opening offices in key markets such as New York, London, Singapore, Mexico City, São Paulo, Paris, New Delhi, and Sydney. This strategic move has helped the organization achieve its goal of worldwide presence.

As of June 30, 2023, the CDPQ managed assets of C$424 billion, invested in sectors such as private equity, fixed income, real estate, infrastructure, and renewable energy in Canada and elsewhere. This significant growth is a testament to the CDPQ's commitment to its investment priorities.

In 2015, CDPQ Infra, a subsidiary of the CDPQ, was created to act as a principal contractor for public infrastructure projects. CDPQ Infra leverages the CDPQ's infrastructure expertise and adopts international best practices to execute work on time and on budget.

The CDPQ has received recognition for its efforts in sustainable investing. In 2022, Global SWF awarded the CDPQ its 2022 Fund of the Year award.

The performance of CDPQ has been impressive, with its net assets growing from $0.2 billion in 1966 to $401.9 billion in 2022. This represents a staggering increase of over 1,900 times in just 56 years.

The rate of return on investment has varied significantly over the years, with some years seeing returns as high as 100% in 1967 and 40.35% in 1982. In contrast, the worst year on record was 2008, with a return of -22.73%.

The data shows that CDPQ has consistently delivered positive returns over the long term, with only a few exceptions. In fact, the average annual return since inception is around 10-15%.

Here's a breakdown of the top 5 years with the highest returns:

It's worth noting that the performance of CDPQ has not been without its challenges, with several years seeing significant declines in net assets. However, the fund has consistently demonstrated its ability to bounce back and deliver strong returns over the long term.

Caisse de dépôt et placement du Québec has faced controversies surrounding its investments in companies with questionable environmental and social records.

The Caisse has been criticized for its investment in companies like Vale, which has been linked to environmental disasters and human rights abuses.

Some critics have also accused the Caisse of not doing enough to address these issues, citing a lack of transparency and accountability in its investment decisions.

The Caisse has responded to these criticisms by stating that it has a rigorous process in place for evaluating the environmental and social impact of its investments.

In the 2000s, the CDPQ faced a severe financial crisis that resulted in a staggering loss of $42.5 billion in 2008. This was a tough time for the organization.

The CDPQ adopted a series of measures to increase its effectiveness and strengthen its risk management to better sustain long-term yields. This included refocusing on its core competencies.

In 2009, the CDPQ launched a major plan to support Quebec businesses, which was a significant step towards recovery. This plan aimed to help local businesses thrive.

The CDPQ also adopted a responsible investing policy in 2004 and signed the UN’s Principles for Responsible Investment in 2006. This marked a shift towards more sustainable and responsible investment practices.

Otéra Capital, a subsidiary of the CDPQ, was created in 2009 to act as a leader in commercial real estate debt across North America. Otéra Capital offers innovative financing solutions for various real estate sectors.

The CQDP has been criticized for its investments in the private security industry, particularly in Allied Universal and CAE Inc. Critics argue that these choices have poor economic value and raise social and ethical concerns.

Allied Universal became a bigger problem for the CQDP after it acquired G4S, a company with a history of controversies that led many public pension funds to divest from it. G4S holds a significant stake in Policity Corporation, which operates Israel's National Police Academy.

The global ESG rating of G4S in 2019 was a concerning C−, highlighting the company's poor environmental, social, and governance practices. This rating is a stark reminder of the potential risks associated with investing in companies like G4S.

Ivanhoé Cambridge, the real estate subsidiary of CDPQ, aims to invest in real estate assets including office space, shopping centres, and multi-residential buildings.

Some of its notable projects include CIBC Square in Toronto and Tours Duo in Paris, showcasing its global reach and diverse portfolio.

Ivanhoé Cambridge's focus on real estate investments is a key aspect of CDPQ's overall strategy, enabling it to diversify its assets and generate returns for its beneficiaries.

Ivanhoé Cambridge is the real estate subsidiary of the CDPQ. It focuses on investing in real estate assets such as office space, shopping centers, and multi-residential buildings. Ivanhoé Cambridge has invested in notable projects like CIBC Square in Toronto.

Cdpq Infra is a subsidiary of CDPQ, dedicated to the development and management of infrastructure. It was mandated by the Couillard government to evaluate two public transit projects for Greater Montreal. CDPQ Infra unveiled plans for the Réseau express métropolitain (REM) on April 22, 2016. The REM is a 67-km light metro system that will link downtown Montréal, the South Shore, the West Island, the North Shore, and the airport. CDPQ Infra is committing $3 billion as the majority shareholder for this project.

The Caisse de dépôt et placement du Québec (CDPQ) is a unique institution that has been around since 1965. It's remarkable to think about how far it has come.

The CDPQ is driven by a clear mission: to ensure the prosperity of its depositors and the pensions of millions of Quebecers. This is reflected in its goal to be a top-performing investor and a global partner of choice.

At the heart of the CDPQ's operations are its depositors, who represent the vast majority of its net assets. Let's take a look at the eight largest depositors:

These depositors represent a staggering 96.4% of the CDPQ's net assets, as of December 31, 2022.

The Caisse de dépôt et placement du Québec (CDPQ) has a clear mandate to achieve optimal returns on capital while contributing to Québec's economic development. This mandate is explicitly stated in their founding statute.

In 2005, the CDPQ's statute was amended to make its mission more explicit, and in 2015, the statute was further amended to ensure the CDPQ acts with full independence. This independence allows the CDPQ to make decisions without interference, ensuring that its decisions are made in the best interest of its depositors.

The CDPQ's commitment to ethics and governance is likely to be put to the test as investors increasingly prioritize environmental, social, and governance (ESG) factors in their decision-making.

CDPQ's mandate is clear: to manage funds with a focus on optimal return on capital while contributing to Québec's economic development. This mission was made explicit in 2005, when article 4 of the founding statute was amended.

The institution's independence is also a key aspect of its governance. In June 2015, the statute was amended to specify that CDPQ acts with full independence in accordance with the Act.

La Caisse de dépôt et placement du Québec (CDPQ) est probablement sur le point de réduire ses investissements dans le gaz et les pipelines.

La décarbonisation des investissements financiers sera probablement remise à l'ordre du jour par bien des investisseurs institutionnels soucieux de respecter l'éthique de leur clientèle et de leurs membres.

La CDPQ gère l'épargne-retraite du quart des Québécois·es, ce qui soulève la question de la nécessité de considérer des critères sociaux pour garantir le caractère éthique des décisions financières prises par cette société publique.

La CDPQ devrait peut-être s'attaquer à la dimension sociale de son éthique financière pour garantir que ses décisions sont équitables et respectueuses de tous les parties prenantes.