Skip to main content

After suffering from a drip, drip, drip of nasty speculation over its losses last year, the Caisse de Depot et Placement du Quebec broke with tradition on Tuesday by being up front with its problems, taking a $5.7-billion writedown on real estate and commercial paper holdings.

Under newly-named CEO Michael Sabia, Canada's largest pension plan opted to go public with problems in its portfolios during the middles of the year, rather than waiting until its traditional reporting period, in February. Mr. Sabia also rolled out the latest update in an evolving investment strategy.

The $120-billion fund announced unrealized losses on $2.2-billion on real estate debt holding. It took a $1.80-billion writedown on the value of its properties. The private equity portfolio was marked down by $1.3-billion. And there was yet another writedown of ABCP holdings, this time for $400-million.

The Caisse decided to preannounce these writedowns because of the important role the fund plays in the Quebec economy, Mr. Sabia said in French during a media conference call.

Last year, the Caisse lost $39.8-billion or 25 per cent of its assets, making it among the worst performing pension funds in the country. The pension fund stubbornly refused to release its financial results, despite numerous reports of its losses, and the Caisse's performance became a hot-button in Quebec political circles and the province's election campaign.

The Montreal-based fund manager will exit its mezzanine loans business and merge its residential-and-hotel property unit into its office-building business, Bloomberg reported, citing a French press release from the fund.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe