New Caisse CEO stresses caution after 10-year bull market and soft 2019 returns

New Caisse CEO stresses caution after 10-year bull market and soft 2019 returns
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MONTREAL — The Caisse de depot et placement du Quebec says it missed its benchmark portfolio last year due to lacklustre performance of real estate and infrastructure assets and a focus on long-term stability, even as enjoyed its strongest return on investment in five years.

The Quebec pension fund manager generated a 10.4 per cent annual return on investments in 2019, or $31.1 billion, growing its net assets to $340 billion. Its benchmark portfolio, however, grew 11.9 per cent.

The Caisse says its real estate holdings, which saw a 2.7 per cent negative return on investment, suffered from the decline of shopping malls across the country and weaker residential real estate in New York following rent control regulations.

The infrastructure portfolio’s return of 7.1 per cent was well below the benchmark index’s return of 17.7 per cent, which the Caisse says is due up to lower-risk assets with long-term promise.

Chief executive Charles Emond, who succeeded Michael Sabia as CEO this month, says he expects the coming decade to be more challenging than the past one, when investors rode what he called “the longest bull market in history.”

Emond says the Caisse is aiming for caution amid a growing gap between real economic performance and a soaring stock market.

This report by The Canadian Press was first published Feb. 20, 2020.

The Canadian Press

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