La Caisse de dépôt et placement du Québec has posted a return of five per cent for the first half of 2017 and a five-year annualized return of 10.6 per cent.
The return, which is for the six months ended June 30, 2017, represents an improvement from the same period last year when the Caisse reported a two per cent return.
Read: Caisse posts strongest half-year return since 2010
The fund’s net assets increased to $286.5 billion, up $15.8 billion from $270.7 billion at Dec. 31, 2016. It attributes the growth to net investment results of $13.3 billion, in addition to net deposits of $2.5 billion.
The Caisse is pursuing a diversification strategy to combat a lacklustre Canadian equity market performance so far this year, said Michael Sabia, president and chief investment officer of the fund, in a press conference on Friday morning.
“In the first half of 2017, global equity markets continued producing good returns, while both volatility levels and interest rates remained low. In other words, it was an environment not all that different from what we’ve seen in recent years. That said, the weak performance of the Canadian stock market this year contrasts with its strong returns last year and with those of major markets abroad,” he noted in a press release.
Read: Caisse focuses on ‘all-terrain portfolio’ as return drops to 7.6%
“Looking ahead, a key question is the future of monetary policy. There appears to be an emerging bias among central bands in favour of tightening monetary conditions. However, it remains to be seen whether these actions will be relatively modest and short term or more substantial and sustained over a longer period,” he added.
Looking at the performance of specific asset classes during the first six months of 2017, the Caisse’s fixed-income portfolio returned 2.7 per cent, its real estate and infrastructure portfolios returned 3.6 per cent and equities returned 6.7 per cent. The Caisse attributed the high return in equities to its active selection of securities and a hefty exposure to U.S. markets.
Investment highlights for the first half of 2017 include:
- Ivanhoé Cambridge, the Caisse’s real estate arm, acquired U.S.-based Evergreen Industrial Properties.
- Ivanhoé Cambridge also broke ground on the new CIBC headquarters in downtown Toronto, as well as a Paris-based headquarters for Natixis bank.
Read: Ivanhoé Cambridge acquires U.S. industrial property manager
Read: Ivanhoé Cambridge buys land for Toronto office project
- The Caisse created a US$2-billion aircraft leasing and financing platform with GE Capital Aviation Services.
- It invested $1.9 billion to support SNC-Lavalin Group Inc.’s expansion projects, including SNC’s acquisition of Britain-based consulting firm WS Atkins.
Read: Caisse invests $2.6B in global aircraft financing platform
Read: Caisse invests $1.9B to support SNC-Lavalin acquisition