Caisse de depot earns 7.6-per-cent return in 2016

MONTREAL — La Caisse de depot said Friday it earned a 7.6 per cent return on investments last year, driven by the recovery in oil and commodity prices. Net assets grew to $270.7 billion as of Dec. 31, said Quebec’s pension fund manager, Canada’s second largest by assets. The annual result was better than the 5.8 per cent return for its benchmark portfolio, but less than the 9.1 per cent earned in 2015. Over five years, the Caisse has generated 10.2 per cent in returns, adding $100 billion to the institutional investor’s assets. “Our strategy, focused on rigorous asset selection, continues to deliver solid results,” CEO Michael Sabia said in a statement. “On the economic front, the fundamental issue remains the same: slow global growth, exacerbated by low business investment.” Last year’s growth was led by equity investments, which account for nearly half of its portfolio. With a return of 10.4 per cent, those investments added $12.3 billion or two-thirds of the Caisse’s 2016 returns. That return was the lowest in five years, which peaked at 22.9 per cent growth in 2013. A strong performance by the Canadian stock market and investments in companies with high U.S. exposure such as Alimentation Couche-Tard, Gildan and Magna generated a 22.7 per cent return. Real estate and infrastructure investments also performed well, raking in a 10.6 per cent return. Fixed income, which comprises one-third of the Caisse’s portfolio, lagged with a 2.9 per cent return as low interest rates depressed returns for bonds, real estate debt and short-term investments.