CDPQ posts negative return of -5.6% “against worst market in 50 years”
The Caisse de dépôt et placement du Québec unveils its financial results for the year 2022. The institution had already posted a significant negative return of -7, 9% at the end of the first six months of the financial year.
Charles Emond, CEO of the Caisse, in a press briefing
The fall in the financial markets has placed the Caisse de depot et placement du Québec (CDPQ) on the razor's edge in 2022, according to the annual financial results presented Thursday. In the context, however, the institution is pleased to have “outperformed”, said its CEO Charles EEmond.
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 an $18 billion decrease in net assets.
The organization, often nicknamed the woolen stocking of Quebecers, explains this loss by the significant drop in value in fixed income (-$20 billion in 2022), a category which experienced a marked decline due to the fastest monetary tightening in decades, observes 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.
Since a period of turbulence, for 3 years, where we have lived through extremes, our assets are higher by 62 billion [dollars], he summarized.< /p>
“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.
—Charles Emond, CEO of the CDPQ
Some investment decisions have not been the most skilful, Mr. Emond acknowledged, making implicit reference to the millions of dollars lost in Celsius Network, which acted as a bank in the crypto world.
Nobody is happy with this investment, recognized the CEO of the Caisse, calling the error a mistake. exception in the portfolio.
Negative returns also concern the “Equities” category (stock markets and private investments), for which the return over one year shows -5.7%.< /p>
The Caisse is however pleased to have exceeded its benchmark portfolio in limiting losses during this annus horribilis. 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 added value, the press release said.
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.
In 2008, we were 6% below our index, [but in 2022] we outperformed our portfolios, he retorted, the Fund is three times bigger and the losses are not materialized compared to 2008.
The CDPQ particularly stood out for its investments in the real estate and infrastructure sectors, where its return reached 12% over a year, according to the financial report. In the real estate sector, 70 investments and disposals totaled $15 billion. In infrastructure, the Caisse made $10 billion in new investments and commitments, according to published data.
Over the past two years, the Caisse de depot et placement du Québec has posted a return of 13.5% for 2021 and 7.7% in 2020.
