Quebec's largest pension fund manager will improve returns and support Quebec's economic development moving forward, its head said Tuesday.
Michael Sabia, CEO of Caisse de dépôt et placement du Quebec, has vowed improved performance at Quebec's largest pension plan. (CBC) Michael Sabia, CEO of Caisse de dépôt et placement du Quebec CEO, says change is needed because old strategies no longer ensure future success.
"We don't have to choose between seeking returns for our depositors and contributing to the development of Quebec. The two go together," Sabia said.
The pledge comes on the heels of an underwhelming year at the money manager. The Caisse reported a $40-billion loss last year, a drop of 25 per cent, compared to an average return of minus 18 per cent for its rivals.
Speaking at a Caisse-sponsored conference on the future of Quebec businesses around the world, Sabia said the world has changed, and so has the Caisse.
Normand Provost, Caisse's vice-president of private investments, said the Caisse will offer its expertise and funding to help Quebec companies expand global operations.
"We have to realize that the new reality of Quebec is international," he said during the first of several forums planned across Quebec over the coming months.
Sabia has been in charge of Quebec's largest pension plan since March, after previous CEO Richard Guay stepped down in January for personal reasons. Sabia previously held the top job at BCE Inc., the corporate parent of Bell Canada.
'The new reality of Quebec is international.'—Normand Provost, Caisse VP
Sabia says the pension fund has simplified its structure and investment strategy, distanced itself from complex derivatives, is more focused on its core skills and manages risk better.
This was all done to ensure the organization has a solid foundation to better serve its customers, Quebec public agencies that deposit their pension funds.
In August, the Caisse announced it would revamp its real estate arm and abandon riskier commercial loans after $5.7 billion in losses wiped out other gains during the first half of 2009.
Some $4 billion of the losses were in real estate, including $1.7 billion in other less liquid investments.
As of June 30, it also lost $1.3 billion from private equity and $400 million in asset-backed commercial paper.
On Friday, the Caisse announced it will issue up to $8 billion in bonds in Canada, the U.S. and Europe by the end of 2010.
Sabia says the Caisse plans to leverage its own expertise and broad global network to advance the province's competitive advantage.
With files from The Canadian Press
