After having already quantified its difficulties in a stormy financial context – a loss of 33.6 billion dollars for the first half of 2022 – it revealed the extent of it on its annual performance: a negative return of -5.6%, and a decrease of $18 billion in net assets to $402 billion as of December 31, 2022.
The organization, often nicknamed the savings
of Quebecers, explains this loss by the significant drop in value in fixed income (-$20 billion in 2022), a category that has experienced a marked decline due to the fastest monetary tightening in decades
watch the CDPQ.
At issue: the rapid rise in rates in 2022 caused by the war in Ukraine and the uncertainty around supply chains, among other things, it is explained.
The CEO of the Caisse, Charles Emond, assured in a press conference that faced with this extraordinary context, all [les] asset classes managed to outperform their indices, when there were few places for investors to take refuge
.
Traditionally, bonds provide some protection against stock market corrections in a diversified portfolio, but rising interest rates weighed on the bond market last year.
The Caisse de dépôt et placement du Québec is posting a negative return of 5.6% in 2022, a year marked by a simultaneous drop in the stock and bond markets. The explanations of Gérald Fillion.
Mixed results
The leader also placed the difficult financial results of 2022 in a more general context to try to dispel any concerns about the investments of Quebecers.
years, where we have experienced extremes, our assets are higher by 62billion [de dollars]”,”text”:”Since a period of turbulence, for 3 years, where we have experienced extremes, our assets are higher by 62 billion [de dollars]””>Since a period of turbulence, for 3 years, where we have experienced extremes, our assets are higher by 62 billion [de dollars]
he summarized.
« Our pensions are in no way at risk, the plans are fully funded. I would like to reassure Quebecers that the financial situation of their plans is very, very, very reassuring. »
Some investment decisions haven’t been the shrewdest, Emond acknowledged, referring implicitly to the millions of dollars lost in Celsius Network, which acted as a bank in the cryptocurrency world.
No one is happy with this investment
recognized the CEO of the Caisse, describing the error as exception in portfolio
.
Negative returns also concern the “Equities” category (stock markets and private placements), for which the return over one year fell by -5.7%.
Avoid the worst
However, the Caisse is pleased to have surpassed its reference portfolio
in the limitation of losses during this a terrible year. 5,6% in2022, compared to –8,3% for the reference portfolio, representing more than 10B$ of added value”,”text”:”The weighted average return of its depositors’ funds stands at -5.6% in 2022, compared to -8.3% for the benchmark portfolio, representing more than $10 billion added value””>The weighted average return of its depositors’ funds stands at -5.6% in 2022, compared to -8.3% for the benchmark portfolio, representing more than $10 billion in value added
says the press release.
Mr. Emond recalled that the institution had already presented negative returns, in 2002, during the dotcom bubble, and more recently during the financial crisis of 2008, while affirming that the situation in 2022 was not comparable .
2008, we were at 6% below our index, [mais en2022] we outperformed our portfolios, he retorted, the Fund is three times bigger and the losses have not materialized compared to2008.”,”text”:”In 2008, we were 6% below our index, [mais en2022] we outperformed our portfolios, he retorted, the Fund is three times bigger and the losses have not materialized compared to 2008.””>In 2008, we were 6% below our index, [mais en 2022] we outperformed our portfolios, he retorted, the Fund is three times bigger and the losses have not materialized compared to 2008.
This same element of language was taken up by the Minister of Finance, Eric Girard, when he was invited to comment on the financial results, on leaving the National Assembly.
milliards de dollars]”,”text”:”The loss is real but you have to put that in comparison with the size of the Caisse’s assets [402milliards de dollars]””>The loss is real but you have to put that in comparison with the size of the Caisse’s assets [402 milliards de dollars]
, he told reporters on Thursday. To his eyes, portfolio construction remains well done
given the resistance of the Fund to markets sometimes rising (2021), sometimes falling (2022), he added.
The Minister reiterated his confidence in the CDPQ greeting its a good job under the circumstances
either an extremely difficult year in the financial markets
.
Finance Minister Eric Girard leaving the National Assembly
Photo : Radio-Canada
Of a completely different opinion, the interim leader of the Liberal Party of Quebec (PLQ), Marc Tanguay, judged the results of the Caisse worrying
. It is not good news
he said in Quebec on Thursday.
Investments in Quebec
In 2022, the Caisse made $4 billion in new investments in Quebec. The value of total assets in Quebec reached $78.4 billion. Last December, Mr. Emond announced a new goal of reaching $100 billion in assets by 2026.
Management costs also decreased from 0.57% to 0.48%.
The CDPQ was particularly notable for its investments in the real estate and infrastructure sectors, where its return reached 12% year-on-year, according to the financial report. In the real estate sector, 70 investments and disposals totaled 15 billion dollars. In the infrastructure segment, the Caisse achievedbillion in new investments and commitments”,”text”:”10billion dollars in new investments and commitments”}}”>$10 billion in new investments and commitmentsaccording to published data.
Over the past two years, the Caisse de dépôt et placement du Québec has posted a return of 13.5% for 2021 and 7.7% in 2020.