Quebec pension manager’s head of real estate departs as Caisse consolidates operations

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Ivanhoé Cambridge chief executive Nathalie Palladitcheff is leaving the real estate investor and developer in April after its majority owner, the Caisse de dépôt et placement du Québec, announced restructuring plans to bring its real estate subsidiaries in-house and slash costs.

The Caisse, which is one of Canada’s largest pension fund managers with $424-billion in assets, said it expects to save about $100-million annually with a plan announced on Wednesday to integrate Ivanhoé Cambridge and another subsidiary, commercial real estate debt provider Otéra Capital Inc., with the Caisse’s investment and corporate services teams.

The integration process starts next week and is expected to take 18 to 24 months, though some teams will start reporting to leaders at the Caisse next week. The investment teams at Ivanhoé and Otéra will formally join the Caisse on April 29, at which time Ms. Palladitcheff will depart.

The Caisse expects to announce a new head of its real estate investment group by the end of the transition in April to replace Ms. Palladitcheff.

The Caisse will also buy out stakes in the two companies held by minority investors to become the lone shareholder. The Régime de rentes du Mouvement Desjardins holds minority stakes in both Ivanhoé and Otéra, while the Northern Trust Co. Canada and Montreal police pension fund ABRPPVM each own shares in Ivanhoé.

Ivanhoé and Otéra will continue to operate under their current brands and their “investment partners and clients will pursue their business relationships in the normal course of activities,” the Caisse said in a news release. Ivanhoé is one of Quebec’s largest property owners and managers, with 80 properties and $77-billion of assets as of the end of 2022, while Otéra’s debt portfolio totalled nearly $29-billion.

The Caisse said it expects a sharper focus on investment expertise, stronger business relationships, smoother governance and other benefits from the changes.

“We want to work as one team – one CDPQ – and build on the unique know-how of our talent to create value for our depositors,” CEO Charles Emond said in a statement.

The integration plan is similar to a restructuring undertaken by Ontario Teachers’ Pension Plan starting last year, which brought its real estate investment operations in-house from subsidiary Cadillac Fairview Corp. Ltd., absorbing its entire 37-person investment team.

Ms. Palladitcheff’s forthcoming departure from the Caisse is the latest in a series of shakeups in the senior ranks of the country’s most prominent real estate investors and developers, several of which are owned by large pension funds. When Teachers made its changes last year, it replaced long-time Cadillac Fairview head John Sullivan with a new CEO, Sal Iacono.

Also last year, Ontario Municipal Employees Retirement System hired Daniel Fournier to lead its real estate arm, Oxford Properties Group, as executive chairman, succeeding Michael Turner, who stepped down to a more limited role. Mr. Fournier came out of retirement to take the job, having previously been chairman and CEO of Ivanhoé Cambridge before Ms. Palladitcheff took over.

In a statement, Ms. Palladitcheff said Ivanhoé's role has evolved from a dual mandate to operate properties and invest in real estate to a focus on “its primary vocation – investing.”

“Combining our abilities with those of the CDPQ group is the logical next step of this evolution,” she said. “My transformation mandate will conclude at the end of the transition period in which I will be fully engaged.”

Mr. Emond said Ms. Palladitcheff “has distinguished herself by her vision and strong leadership” through COVID-19 and a period of change and upheaval in the real estate sector.

Ms. Palladitcheff has been named by some Quebec media as a potential candidate to be the inaugural CEO of the newly created provincial agency Santé Québec, which will take charge of operations for the provincial health care sector, aiming to make them more efficient.