Caisse de Depot et Placement du Quebec, Montreal, returned a net 7.7% on its investments in 2020 and reported net assets of C$365.5 billion ($285.9 billion), said a news release Thursday.
The return was 1.5 percentage points below its benchmark, which the pension fund attributed primarily to the impact of the COVID-19 pandemic on real estate returns, specifically on the retail and office building sectors, the news release said.
For the five and 10 years ended Dec. 31, CDPQ returned an annualized net 7.8% and 8.6%, respectively.
For the year ended Dec. 31, 2019, CDPQ returned a net 10.4%.
By asset class, equities posted the strongest return for the year, at a net 12.4% (slightly below its benchmark of 12.7%), followed by fixed income at 9% (above its 8.2% benchmark) and real assets at -7% (well below its benchmark return of 0.2%).
As of Dec. 31, the actual allocation was 49.9% equities, 30.2% fixed income and 18.4% real assets, with the rest in asset allocation and overlay strategies.
"In an unprecedented environment characterized by sharp contrasts between the various asset classes, CDPQ delivered returns that, overall, meet the needs of its depositors," said Charles Emond, president and CEO, in the news release.
He cited strong returns in private equity and the resilience of the pension fund's infrastructure portfolio as other highlights for the year.
"That said, we are working to better position some of our activities for the coming years. In real estate, certain sectors continue to struggle with significant challenges that the pandemic has only intensified. During the year, we continued to transition this portfolio, including through various acquisitions in promising sectors," Mr. Emond said.