Quebec's Caisse Achieves 9.3% Return in 2025 Amid Global Uncertainties
The Caisse de dépôt et placement du Quebec, one of Canada's largest pension funds, has reported a robust 9.3% return for the year 2025, showcasing resilience in a period marked by significant trade and geopolitical uncertainties. This performance has propelled the fund's net assets to an impressive $517 billion, underscoring its strategic investment approach.
Strong Performance Driven by Diversified Investments
The fund's success was primarily fueled by strong performances in equity markets, credit investments, and infrastructure assets. Notably, the equity portfolio delivered a remarkable 17.7% return, marking the third-best performance in the past decade. This highlights the Caisse's ability to capitalize on favorable market conditions despite broader economic challenges.
However, the return fell slightly below the benchmark portfolio's 10.9% target. Private equity investments underperformed due to slowing growth trends, while the real estate sector continues its recovery from the impacts of the COVID-19 pandemic, including the widespread shift to remote work.
Strategic Adjustments and Market Exposure
Charles Emond, Chief Executive of the Caisse, emphasized the importance of diversification in navigating an uncertain environment. "In an environment shaped by uncertainty and profound changes that are likely to persist, diversification remains essential, allowing each asset class to play its part across different market conditions," he stated.
The fund has maintained a stable exposure to the United States at approximately 40%, despite making strategic adjustments. Some U.S. assets were sold and reinvested in Asian and European markets, though executives clarified that this does not signify an exit from the U.S. market. "Are we exiting out of the U.S.? No," Emond said. "But are we approaching it differently, given the circumstances... for sure."
Additionally, the Caisse has taken steps to reduce exposure to the U.S. dollar through hedging strategies, reflecting a cautious approach to currency risks.
Real Estate Challenges and Long-Term Success
In real estate, there are signs of stabilization in rental incomes and property values, but this progress is offset by high financing costs. Emond noted, "We are seeing progress but there's still challenges... it's been more than a transition. It's been a crisis in certain segments, and I see a stabilization."
Over the longer term, the Caisse has consistently outperformed its benchmarks. The five-year annualized return stands at 6.5%, above the benchmark's 6.2%, while the ten-year return up to December 31, 2025, is 7.2%, surpassing the benchmark's 6.9%.
Future Focus and Quebec Investments
Looking ahead, the pension giant will closely monitor three key areas: the promise and impact of artificial intelligence, the ongoing dominance of U.S. assets, and the dynamics between public and private markets. These factors are expected to shape investment strategies in the coming year.
The Caisse also achieved its goal of investing $100 billion in Quebec's economy a year ahead of schedule, fulfilling its dual mandate of generating returns for pensioners and contributing to provincial development. In addition, nearly 60 investments were made outside Quebec in 2025, demonstrating a balanced approach to local and global opportunities.
This performance positions the Caisse as a leader in the pension fund sector, navigating complexities with a diversified and adaptive strategy that ensures long-term growth for its stakeholders.
