MONTREAL - Don't bother asking what investments are held by Canada's largest pension plan, the Caisse de depot et placement du Quebec. Better to ask what it's not invested in.
The fund applies its considerable influence in places as diverse as Hollywood and hockey, television and tech stocks, publishing and private equity. The breadth of its investments has helped the fund grow from C$11.7 billion (US$7.4 billion) in 1981 to C$125 billion today, but it also has opened it up to criticism at home.
In 2000, the Caisse flexed its muscle and thwarted a friendly cable industry merger between Quebec cable operator Groupe Videotron Ltee and Toronto-based Rogers Communications. Instead, the fund backed Quebec-based publishing giant Quebecor Inc., buying a 45% interest in the company's media division. Quebecor subsequently ousted Rogers and completed a hostile $5.4 billion takeover of Videotron.
Part of the fund's government mandate is to help the Quebec economy by investing in Quebec companies. That's one reason it intervened so aggressively in the Videotron deal, and in others before it.
Open to criticism
But that mandate, and the Caisse's perceived zeal in pursuing it, has opened the fund to criticism. An editorial in the National Post in October 2001 blasted the fund's management and recommended the Canadian auditor general audit the fund. The editorial also suggested limiting the Caisse's ownership of any corporation to 30%, banning the fund from participating in hostile takeovers and diversifying its 13-member board of directors beyond provincial political players.
The Caisse also has popped up elsewhere on the investment radar screen.
Last year the fund, through its CDP Capital d'Amerique subsidiary, lent Colorado businessman George Gillett C$140 million to assist him in closing a C$275 million deal to buy an 80.1% interest in the Montreal Canadiens, a professional hockey team, and 100% of the team's arena, the Molson Centre.
Most recently, Los Angeles-based CDP Capital Entertainment, the investment unit the Caisse created specifically to invest in Hollywood entertainment ventures, said it and two other investors would acquire a controlling interest in dick clark productions inc., Burbank, Calif. The company, founded by Mr. Clark 45 years ago, produces various awards shows, including "The Golden Globe Awards" and "The American Music Awards," as well as various network TV shows including "Dick Clark's New Year's Rockin' Eve."
The deal is reportedly worth $140 million.
Henry Winterstern, co-founder and managing partner at CDP Capital Entertainment, called his firm's investment in dick clark productions "the cornerstone of television production within our managed portfolio."
That's saying something, considering the Caisse, through another fund manager, CDP Capital, also has invested $100 million in television and movie giant Metro-Goldwyn-Mayer Inc., Santa Monica, Calif. At the same time the deal was announced, MGM said it would add Mr. Winterstern to its board of directors, giving the Caisse an indirect voice as one of Hollywood's players.