CDPQ Posts Negative 7.9% Return for 1H of 2022
Posted on 08/17/2022
Caisse de depot et placement du Quebec (CDPQ) experienced its worst six-month period of the last 50 years for stock and bond markets. CDPQ generated an average return of -7.9%, significantly above its benchmark portfolio’s return of -10.5%. Over five and ten years, annualized returns were 6.1% and 8.3% respectively, also outpacing benchmark portfolio returns. Net assets were C$392 billion.
“The first six months of the year were very challenging. The mix of factors we faced had not been witnessed in several decades: spiking inflation that triggered rapid and sharp interest rate hikes, rare simultaneous corrections in both stock and bond markets, fears of an economic downturn and the war in Ukraine with its many collateral effects,” said Charles Emond, President and Chief Executive Officer of CDPQ in a press release. “Despite this turbulence, CDPQ’s portfolio continued to clearly outperform its benchmark portfolio due to the strategy’s evolution since the pandemic started, sound asset diversification and the quality of execution by our teams.”
Over six months, CDPQ posted a -13.1% return in fixed income. Private credit investments and commitments continued in the first half of 2022, amounting to C$ 8.5 billion.
Real assets, a class that includes the real estate and infrastructure portfolios, generated a 7.9% six-month return, demonstrating their diversifying role which contributes to limiting inflation’s impact on the total portfolio. The real estate portfolio recorded a 10.2% return in the first six months, driven by its repositioning over the last two years, compared with 11.4% for its benchmark portfolio. The infrastructure portfolio generated a 5.8% return over six months, beating its benchmark portfolio’s -5.5%.
The Equity Markets portfolio recorded a six-month return of-16.0%, above its benchmark portfolio’s -17.2%. For six months, the private equity portfolio’s return was -2.4%, above the -4.1% return of its benchmark portfolio.
