Caisse Generates 9.6 per Cent Return in 2012; Assets Grow to $176.2 Billion

By Marowits, Ross | The Canadian Press, February 27, 2013 | Go to article overview

Caisse Generates 9.6 per Cent Return in 2012; Assets Grow to $176.2 Billion


Marowits, Ross, The Canadian Press


Caisse generates 9.6 per cent return in 2012

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MONTREAL - The Caisse de depot et placement du Quebec continued to make progress in rebuilding assets last year, generating above benchmark returns and claiming the title as Canada's largest pension fund manager.

The Canadian investment giant said Wednesday that it generated a 9.6 per cent return on investments in 2012, raising its assets to $176.2 billion from $159 billion in 2011.

The returns for its top seven depositors ranged between 8.2 and 10.5 per cent. The Quebec Pension Plan achieved the top returns after gaining just 2.8 per cent in 2011.

By slightly beating the benchmark index of 9.3 per cent, the Caisse added $14.9 billion in net investment returns and $2.3 billion in net deposits.

As a result, it has managed to supplant, at least temporarily, the Canada Pension Plan Investment Board as the country's top pension fund. The CPPIB recently reported $172.6 billion in assets as of Dec. 31, the end of its third quarter.

"We've made a lot of progress in delivering what needs to be done to reposition this institution and to make sure it has a bright future going forward and, because it does that, Quebecers can have confidence in the stability of their pensions," Caisse CEO Michael Sabia told a news conference.

Since July 2009, the Caisse has achieved an annualized return of 10.7 per cent, adding $50.7 billion in investments. It beat the benchmark portfolio of 9.2 per cent, the equivalent of adding $6.9 billion in net investment income.

Despite disastrous results in 2008, which saw its asset base drop by nearly 23 per cent to $120 billion, the Caisse's annualized returns over the last decade are 6.7 per cent.

While the risks of severe economic downturn have diminished, Sabia said the near-term growth prospects in Quebec and Canada are going to be more challenging because of headwinds facing the commodity and energy markets.

"We'll probably lag behind the United States by a reasonable margin and similarly the same phenomenon is going to be evident here in Quebec where growth prospects in the near term are going to be tougher than they have been," he told reporters.

Quebec Finance Minister Nicolas Marceau called the Caisse's results "satisfying."

"The performance obtained by the Caisse in 2012 clearly shows that the search for an optimal performance and economic development, far from being irreconcilable, go together," he said in a statement.

The Caisse said its investments in asset-back commercial paper, which are held in trust, added one percentage point to the 2012 results.

Helped by the strong performance of stock markets outside of Canada, its equity investments -- which account for 47 per cent of assets -- generated the strongest return of any class with a 12. …

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