Pension fund manager Caisse earns over 9 percent return in 2017

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Quebec’s Caisse de depot pension fund manager says it earned a 9.3 percent return in 2017, ending a three-year streak of decreasing returns.

The efficiency partially exceeded its reference index and compared to a development of 7.6 per cent in 2016.

Caisse CEO Michael Sabia said the institutional investor achieved its five-year goal of providing a solid return that exceeds its comparator group and the long-lasting requirements of its customers.

“The essence of our method is to provide trusted outcomes every year with the objective of accomplishing excellent long-lasting efficiency. That’s what occurred in 2017,” he said in a news release.

Total assets since Dec. 31 were $298.5 billion, up $24.6 billion in one year, while net deposits totalled $3.2 billion.

Its 8 main customers got returns in between eight and 10.9 per cent in 2015.

Returns were $110 billion over five years for a 10.2 per cent annualized return over the period.

Net properties increased by $122 billion given that 2012, including $12.6 billion from its customers.

Yearly returns last increased between 2012 and 2013, when they rose 3.5 percentage points to 13.1 percent.

In 2014 the fund manager published a return of 12 per cent, marking the beginning of a three-year streak of decreasing returns. It finished 2015 with a return of 9.1 per cent, and 7.56 percent in 2016.

Equities did the heavy lifting in 2017, rising 13.6 percent to $149.5 billion, while fixed earnings was up 3.5 percent to $96.7 billion. Property increased 8.7 percent to $50.4 billion.

Property was the only portfolio that cannot exceed its reference index.

The Caisse said the strong development in equities doesn’t fully catch the rise in multiples for tech companies and those with speeding up development.

Sabia said financiers are dealing with an “uncommon environment” as markets face fairly strong economic fundamentals, synchronized international growth and financier concerns over how efforts to curb inflation will affect interest rates.

He stated the Caisse is developing a more resistant portfolio to hold up against market volatility, however that geopolitical risks and stress connected to social inequality continue.

The Caisse said it has diversified its geographical direct exposure over the last five years by expanding worldwide presence by $105 billion to reach $190 billion invested worldwide to date.

It also more than doubled its exposure in development markets considering that 2012 to more than $35 billion.

Canada’s second-largest pension fund supervisor made $6.7 billion in brand-new financial investments with the province’s economic sector, which it stated is the main chauffeur of the economy and tasks.

It is now partners with more than 750 business based in the province.

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