The Caisse de dépôt et placement du Québec is reporting a net return of 4.2 per cent for the first half of 2023.
The result is a small increase from its established benchmark portfolio of 4.1 per cent. As of June 30, 2023, the investment organization had $424 billion in net assets, a 5.3 per cent increase from the $402 billion held in the previous quarter.
According to the Caisse, equities provided the largest net return for the first six months of the year, netting a 6.4 per cent increase to reach $11.3 billion. Real assets and fixed income also aided the bottom line with an increase of 1.8 per cent and 4.6 per cent, respectively.
In a call with media on Wednesday, Charles Emond, the Caisse’s president and chief executive officer, said the boost from equities can be credited to a prudent strategy amid volatile times including investments in the technology sector. The year has shown contradictory signs, he noted, due to high inflation and interest rates combined with a strong jobs market.
A historical increase in interest rates has put pressure on the real estate market, added Emond, referring to the Caisse’s real estate arm Ivanhoé Cambridge. “We’re in an environment [where] rates increased by over 500 points in the year. It’s historical as an increase in rates and it’s not favourable for real estate values or availability of debt. It’s been translated by a first semester that is more volatile.”
Half-way through 2023, he noted, the Caisse has completed fewer than half of the real estate investment transactions it did at the same time last year. And looking ahead, the investment organization will consider diversification in the investment tactics it uses while prioritizing an even longer-term outlook.