Headquarters of the Caisse de dépôt et placement du Québec in Quebec CityJacques Boissinot
The past three years have not been kind to Quebec's iconic pension fund manager. It has been squeezed from three directions:
COMMERCIAL PAPER: The Caisse gambled nearly $13-billion on third-party asset-backed commercial paper (ABCP), complex securities that appeared safe - until the market for them froze up in August of 2007. The Caisse took large charges as the value of its holdings declined. It still holds a large portfolio of the paper and has put a team together to manage it as a legacy investment.
STOCKS: When stock markets tanked in the fall of 2008, most investors felt the pain, but few as badly the Caisse. It underperformed average market performance and posted a loss of $39.8-billion - an amount equal to 25 per cent of its portfolio. Its real estate investments slid 16.1 per cent, private equity tumbled 36 per cent, and stock market holdings sunk 36.7 per cent.
REAL ESTATE: The Caisse has one of the 10 largest real estate portfolios worldwide. Months after Mr. Sabia arrived in March, 2009, it became apparent that some of its riskier real estate bets had turned sour. In a bid to boost transparency, Mr. Sabia announced that in the first half of 2009, the pension fund manager had taken $5.7-billion in writedowns, mostly because of its real estate activities. That wiped out the gains it had in other areas.
Tara Perkins