Quebec pension fund manager Caisse de dépôt et placement du Québec had net assets of $517-billion at the end of 2025.Christinne Muschi/The Canadian Press
Caisse de dépôt et placement du Québec tallied a 9.3-per-cent return last year as gains from stock holdings offset a neutral performance by real estate investments in an environment marked by continuing trade strife, global conflict and the expansion of artificial intelligence across society.
Net assets stood at $517-billion at the end of 2025, up from $473-billion the year before, the Montreal-based pension fund manager said in a statement Wednesday. The annualized return over five years was 6.5 per cent.
“It’s really a new world order out there,” Caisse chief executive Charles Emond said in an interview, noting the power of AI-related themes over stock markets among other major shifts taking place. Investment diversification remains the key to delivering stable returns as the uncertainty persists, he said.
“The main risk we’re dealing with – and I would have never thought I’d say that during my career – is the U.S.,” Mr. Emond said. U.S. exceptionalism is still there but it has eroded lately and “the level of trust” has been put to the test, he said. “It’s actually paid off to be invested elsewhere.”
The U.S. remains the deepest, most liquid and most attractive market for investors and the Caisse is not exiting the country, Mr. Emond insisted. But it is being more prudent in the way it invests there.
The pension fund pared back U.S. stock holdings last year while boosting credit activity. It also sold some U.S. office buildings while hedging more than usual on its U.S. dollar exposure. Roughly 40 per cent of its total assets are invested across the border.
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The pension fund’s gain on equity market investments was 17.7 per cent for the year, the third-best over the past decade, as it added to positions in other markets such as Europe and South Korea. Its infrastructure portfolio generated a 9.2-per-cent showing, driven by energy, ports and highway investments, while fixed income returned 6.6 per cent.
On the other end of the spectrum, the Caisse’s real estate holdings remained under pressure, delivering a 0.2-per-cent return as the market recovers. Private equity, usually a strong motor for the pension fund, generated a 2.3-per-cent gain as profit growth slowed for its portfolio companies and valuation multiples dropped in the technology and health care sectors.
The Caisse’s mixed results for 2025, which closely matched the previous year’s 9.4-per-cent return, highlight the magnitude of the challenges for Mr. Emond, a former Bank of Nova Scotia executive who took over as Caisse CEO in early 2020.
His tenure, which was recently extended to 2029, has been fraught with turmoil from the COVID-19 pandemic, record inflation and wars in Ukraine and the Middle East. Donald Trump’s reclaiming of the White House has presented a new test: The President’s unpredictability has repercussions for trade and on the decisions of central bankers and corporate leaders.
The Caisse, which is independently run at arm’s length from the Quebec government, has a dual mandate to manage deposits with a view to achieving optimal returns while contributing to Quebec’s economic development. It is omnipresent in the province, investing in companies such as Alimentation Couche-Tard Inc. and WSP Inc. and pushing into transit development with Montreal’s $8-billion Réseau express métropolitain light-rail system.
Quebec Premier François Legault said last November that the Caisse “needs to do even more” to back local projects and business in the face of Mr. Trump’s trade war against Canada, which has hurt aluminum makers and forestry companies in the province. “I think the situation is critical right now,” the Premier said at the time.
The Caisse now has assets in Quebec topping $100-billion, a target it set three years ago. It hasn’t set a new goal, vowing instead to be “more intentional” on the impact of future investments in strategic sectors such as natural resources, defence and energy, Caisse executive vice-president Kim Thomassin told reporters at a news conference.
Among its biggest domestic deals in the past 12 months, the Caisse bought Innergex Renewable Energy Inc. for about $2.8-billion and struck a $1.3-billion deal with Telus Corp. for a minority stake in a new cellphone tower spinout called Terrion. It also made a US$100-million equity investment in Champion Iron Ltd. to support the miner’s acquisition of Norway’s Rana Gruber SA.
Earlier this month, the pension fund briefly suspended its deal-making with DP World Ltd. in the wake of revelations linking the chairman and chief executive of the logistics multinational to disgraced financier Jeffrey Epstein. It has since resumed working with its long-standing partner after the executive resigned.