The Caisse de dépôt et placement du Québec posted a return of 7.7 per cent in 2020, below its benchmark index of 9.2 per cent as the investment fund plans changes to its portfolio in response to the coronavirus pandemic.

The investment fund’s performance was dragged down by real-estate investments, which suffered during the pandemic. The Caisse’s real-estate portfolio, which includes shopping centers and office buildings, declined 15.6 per cent in 2020, the Caisse said.

Read: How will coronavirus affect real estate investing long term?

“In an unprecedented environment characterized by sharp contrasts between the various asset classes, CDPQ delivered returns that, overall, meet the needs of its depositors,” Caisse president and chief executive officer Charles Emond said in a statement.

The returns come after a turbulent year in financial markets, which saw stocks plunge at the start of the pandemic only to recover ground throughout the rest of the year as governments around the world mobilized to help the economy.

The Caisse’s depositors require a 6 per cent average return over the long term, the Caisse said. The investment fund’s annualized return over five and 10 years was 7.8 per cent and 8.6 per cent, respectively, the Caisse said. Still, the Caisse plans to alter its portfolio in response to the pandemic, particularly in real estate. The pandemic and associated government measures have taken a heavy toll on investments like commercial real estate as more people work remotely or order goods directly to their homes.

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“In real estate, certain sectors continue to struggle with significant challenges that the pandemic has only intensified,” Emond said. “During the year, we continued to transition this portfolio, including through various acquisitions in promising sectors.”

As of Dec. 31, 2020, the Caisse’s net assets stood at $365 billion, it said, up from $248 billion in 2015.