Caisse de Depot et Placement du Quebec, Montreal, returned a net 7.6% on its investments in 2016, topping its benchmark's 5.8% return for the year, Caisse said Friday in a news release.
The returns helped push total assets as of Dec. 31 to C$270.7 billion ($201 billion) for Caisse, which manages assets for provincial, municipal and other pension funds in Quebec as well as other provincial entities. That's up 9.2% from the end of 2015.
The 2016 return was above the 6.8% return from Canadian pension plans surveyed by RBC Investor & Treasury Services for the same period.
Caisse returned 9.1% in 2015 vs. 6.7% for its custom benchmark.
In 2016, C$18.4 billion was added through investment returns, while net contributions totaled C$4.3 billion.
For the year ended Dec. 31, the best-performing asset class was real assets, which returned 10.6%; followed by combined public and private equities, 10.4%; and fixed income, 2.9%.
Caisse's overall asset allocation as of Dec. 31 was 49% total equities, 33% fixed income, 17% real assets and the remainder in asset allocation and overlay strategies for which Caisse did not provide returns.
For five years, Caisse returned an annualized 10.2% vs. the benchmark's 9.1%.
“On the economic front, the fundamental issue remains the same: slow global growth, exacerbated by low business investment,” Michael Sabia, president and CEO of Caisse, said in the news release. “At the same time, there are also significant geopolitical risks. Given the relative complacency of markets, we need to adopt a prudent approach. However, taking a prudent approach does not mean inaction, because there are opportunities to be seized in this environment”.
Further details will be released in Caisse's 2016 annual report in the spring.
