Caisse de Depot et Placement du Quebec, Montreal, posted a 2.3% return in the first half of this year, bolstered by investments in private equity and infrastructure.
The results beat the 1.4% average loss of Canadian pension funds for the first half of 2010, as estimated in a July report by RBC Dexia's investment services unit.
Caisse's net assets under management rose 3.2% in the first six months of 2010 to C$135.8 billion (US$130.7 billion), the fund said Thursday in a statement.
“The markets were challenging and volatile in the first half of the year, with sharp declines in global stock market indicators and significant concerns about European and U.S. economic outlooks,” Michael Sabia, who took over as CEO in March 2009, said in the statement. “The Caisse navigated this unfavorable environment well.”
Caisse benefited from pursuing an “offensive” strategy of focusing on fixed income and alternative assets, while taking a “defensive strategy” by reducing holdings of stocks, Mr. Sabia told reporters on a conference call.
Caisse reported a 6% return for fixed income and a 3.8% gain on inflation-sensitive investments, countering a 1.7% loss on stocks.
Caisse had a 15% return on its private equity holdings and 10% on its investments and infrastructure portfolio. The pension fund's fixed-income gains were mostly from corporate and real estate debt investments.
Caisse had a 10% return on investments last year with gains in equities and fixed income, after reporting an unrealized first-half loss of C$5.7 billion on real estate.