Montreal

Quebec Caisse cuts spending by $20M

The Caisse de dépôt et placement du Quebec's continuing efforts to get back on track will see Canada's largest pension fund manager cut operating expenses by $20 million this year without resorting to layoffs.

Expenses to be trimmed, but layoffs avoided

The Caisse de dépôt et placement du Quebec's continuing efforts to get back on track will see Canada's largest pension fund manager cut operating expenses by $20 million this year without resorting to layoffs.

The Montreal-based investing giant said Wednesday its efficiency drive will see it refocus and simplify its operations to improve its finances.

"The measures announced today are part of continued improvements to our productivity and expense control," president and CEO Michael Sabia said in a release.

The move will require all divisions to cut spending specifically on external management fees, professional services and information technology projects. In addition, the fund manager is in talks to get lower prices from its suppliers.

The agency wouldn't specify which projects will be cut or how the reductions will be spread.

"These measures confirm the Caisse's need to continually adjust to the demands of a changing financial environment, and meet the expectations of its depositors," Sabia added.

The Caisse, which invests in stocks and bonds, private equity and real estate, said it doesn't plan to cut any jobs. It employed more than 800 people at the end of 2008.

Caisse spokesman Maxime Chagnon wouldn't rule out additional spending cuts.

"As we make progress and identify new ways of doing things, if we find some other ways we might change other things," he added.

The $20-million reduction in this year's spending will reduce expenses to $251 million. The move to improve productivity and expense control is in addition to more than $43 million in cuts last year, about 14 per cent.

It spent $117 million in salaries and employee benefits last year, down from $129 million in 2008. Spending on professional services decreased by $4 million, to $56 million.

During last year's shakeup, 55 positions were abolished and 24 new positions were created, mainly in risk management. Another 20 positions were cut last summer.

Sabia said the Caisse is making the cuts even though its expenses are in line with other large institutional investors.

An additional push has come from the Quebec government, which during this month's provincial budget urged all state agencies to cut their spending. No specific targets were enumerated for the Caisse.

In February, Sabia said the Caisse was on the path to recovery from a disastrous 2008 after earning a 10.04 per cent average return on its investments in 2009.

With a strong second half of the year, the Caisse's assets climbed to $131.6 billion by the end of 2009, up from $120.1 billion in 2008.

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