Article content material

(Bloomberg) — The historic bond market rout didn’t spare the Caisse de Depot et Placement du Quebec, inflicting the pension supervisor to put up its worst outcomes because the international monetary disaster. 

Article content material

Canada’s second-largest public fund misplaced 5.6% and noticed internet property fall to C$402 billion ($297 billion), down C$18 billion from the prior yr. Its fixed-income portfolio was shredded by the fast rise in rates of interest, falling virtually 15%. 

Article content material

The outcome would have been a lot worse if not for CDPQ’s holdings of business property, infrastructure and personal fairness, all of which noticed positive aspects. If the agency held a conventional portfolio of 60% shares and 40% bonds, property would have plunged to C$367 billion, Chief Government Officer Charles Emond mentioned at a information convention. 

CDPQ’s complete return was its worst since 2008, however it outperformed a blended benchmark that was down 8.3%, the agency mentioned in a press release. 

Actual property and infrastructure investments have been two of the brightest spots, with the Caisse posting low double-digit positive aspects in every. “Our technique now focuses on extra logistics and extra residential, and fewer procuring facilities and workplaces,” Emond mentioned. 

Article content material

Public shares have been down 11.3% — outperforming the S&P 500 — whereas personal fairness was up 2.8%. CDPQ didn’t profit from the surge in power shares because it exited from oil manufacturing in 2021. The fund lowered its publicity to the expertise sector and elevated its holdings in additional defensive segments akin to insurance coverage, prescribed drugs and telecommunications.

Azure Energy

After writing off a $150 million funding in bankrupt cryptocurrency lender Celsius Community LLC final summer time, the Caisse stumbled with its majority stake in India’s Azure Energy World Ltd. The renewable-energy agency has misplaced two-thirds of its worth because the finish of August, when the brand new CEO stepped down and the corporate disclosed a whistleblower grievance about potential “manipulation of mission knowledge and data by sure workers.” 

Article content material

Score businesses have downgraded Azure’s debt and the corporate nonetheless hasn’t filed an annual report for the fiscal yr that ended final March. The Caisse holds a 56% curiosity within the firm. 

“There are ongoing investigations. On the facet of the scenario itself, as quickly because the Caisse was knowledgeable, Azure did every thing it needed to do,” Emond mentioned. 

“For us, we is not going to compromise on the governance or ethics of this firm. The subsequent steps would be the conclusions of the investigation. The story is just not over. It’s too early to speak about losses. Trying to the long run, all of the choices are on the desk.”

(Provides addition info on fairness portfolio return in sixth paragraph)