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Michael Sabia is stepping down from his post as chief executive officer of Canadian pension fund giant Caisse de dépôt et placement du Québec after a decade at the helm, leaving an institution once marred by crisis on stable footing but with several looming challenges.

The former BCE Inc. head said Tuesday he will be the longest-serving Caisse CEO when he leaves the job in February to lead the University of Toronto’s Munk School of Global Affairs and Public Policy.

Mr. Sabia said the time is right to depart because the Caisse’s portfolios are proving resilient amid global market swings while the pension fund’s global footprint is well-advanced. Two thirds of its assets are invested outside Canada.

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He denied he was at odds with Premier François Legault’s government and said he is leaving on his own terms. The Munk opportunity was some time in the making, he said, adding the university was willing to wait until he felt comfortable leaving the Caisse.

“This is a team sport, this isn’t about me. [We’ve] built an organization that is positioned well in the world, that is performing on a very solid basis,” Mr. Sabia said. “There’s always things to do but generally I think things are in very good shape here. And so it’s time to get on with [this new opportunity]. … At some point you say to yourself, you’ve got to be disciplined, time to move on.”

Mr. Sabia, 66, has led the Caisse through four changes in Quebec government, navigating the politically sensitive waters by defending the Caisse’s decision-making independence while boosting investments in local companies and real estate. He has always insisted that the best way to stoke Quebec’s corporate champions is by making them world beaters.

He will leave the job roughly a year ahead of the formal expiry of his mandate in March, 2021. He had said in recent months that he would not remain as Caisse CEO past that time, even if asked to stay.

“In doing this, he stays master of his own destiny,” said Louis Hébert, a management specialist at business school HEC Montréal. “He came in when there was lots of turbulence and questions being asked of the Caisse. He’s stabilized the situation and put in place processes" to withstand downturns, he said.

Mr. Sabia joined the Caisse at a low point in its history in March, 2009, and his appointment was not without controversy at the time. He was an outsider – a St. Catharines, Ont.-born anglophone and a former senior federal civil servant who had previously served as CEO of BCE Inc., the parent of Bell Canada.

His predecessor Henri-Paul Rousseau, a banker, had been recruited to clean up the institution, which manages money on behalf of Quebec public pension and insurance funds, after it posted poor results coming out of the dot-com meltdown. Mr. Rousseau departed in May, 2008, and replacement Richard Guay lasted just a few months. That year, the Caisse booked a $40-billion loss as it sustained heavy losses in the value of its investments in stocks, real estate and private equity after markets crashed globally that fall.

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Once in the door, Mr. Sabia moved swiftly to restructure the management team, book heavy writedowns in the company’s real estate business and reorient its investment strategy by focusing on assets anchored in the real economy. By the end of 2011, the Caisse’s assets under management were finally back to where they’d been four years earlier, at $159-billion.

He has since delivered steady if unexceptional returns, averaging 9.9 per cent annually in the past decade and more than doubling the Caisse’s asset base to $326.7-billion as of June 30.

While the Caisse under Mr. Sabia has become a far more global investor – just 36 per cent of its assets are now in Canada, from more than 50 per cent – it has also worked to live up to part of its founding mandate to support the Quebec economy.

The Caisse led efforts to build and operate a new light rail system in Montreal and has made high-profile investments in the province’s technology sector, including leading a $200-million financing of artificial intelligence startup Element AI. It has also financed expansion efforts of local champions including CGI Group and Laurentian Bank.

There are several unresolved challenges for the pension fund, including what to do about its sizable investment in beaten-down engineering firm SNC-Lavalin Group Inc. But progress on those challenges is being made, Mr. Sabia said. “I don’t see in any of those files flashing red lights or solid red lights.”

Quebec’s political leaders were effusive in their praise for Mr. Sabia and what he’s been able to accomplish at the Caisse. Mr. Legault singled out his “exceptional track record." Economy Minister Pierre Fitzgibbon said his rigorous management pushed the pension fund manager “to another level.”

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The Caisse’s board has begun the selection process for the next CEO and has hired an international consultancy to help in the search. The Caisse board recommends a candidate to the government for approval.

Speculation about who would take over from Mr. Sabia is already well under way in Quebec’s corporate and political corridors of power. External candidates whose names have been linked to the job include National Bank of Canada CEO Louis Vachon and Sophie Brochu, who is leaving her job as CEO of energy firm Energir at the end of the year. She would be the first female CEO to lead the Caisse were she to be selected.

“Certainly the Caisse is ripe to be run by a woman,” Quebec Finance Minister Eric Girard told reporters Tuesday. “We’re looking for the best possible person to manage the Caisse. It’s very possible that will be a woman.”

“The government is always in a hurry to name people. They undoubtedly have a candidate in mind,” said Michel Nadeau of Montreal’s Institute for Governance of Private and Public Organizations, himself a former Caisse senior executive.

Influential in government and business, Mr. Sabia, although not an academic, is a respected leader and an ideal candidate for a school that seeks to make an impact beyond academia. University of Toronto president Meric Gertler said one of the tasks entrusted to Mr. Sabia will be to look into whether the Munk School should become a separate faculty unto itself.

“We were looking for somebody who could act as a bridge between the great academic work being done inside the university and the school of global affairs and public policy and the realm of application,” Mr. Gertler said. “Michael brings tremendous credibility in both of those worlds.”

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With a report from Joe Friesen

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