Quebec’s Caisse posts 9.3% return in 2025 despite uncertainty

The Caisse de dépôt et placement du Quebec generated a 9.3 per cent return in 2025 Photo by Allen McInnis/MONTREAL GAZETTE filesArticle contentDespite a year marked by trade and geopolitical uncertainty, the Caisse de dépôt et placement du Quebec generated a 9.3 per cent return in 2025, boosted by strong stock markets, credit and infrastructure investments, with net assets climbing to $517 billion.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentWhile turning in a strong performance — surpassing the returns of some of Canada’s other large pension funds — the Quebec pension giant’s gain was below its benchmark portfolio return of 10.9 per cent. Private equity underperformed due to slowing growth while real estate is still recovering from factors including the widespread move to remote work during the COVID-19 pandemic.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle content“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,” said Charles Emond, chief executive of the Caisse.Article contentPosthasteBreaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentIn real estate, there are signs rental incomes and property values are stabilizing, but the Caisse noted that this was offset by the high cost of financing.Article content“We are seeing progress but there’s still challenges,” Emond said. “There have been no fire sales… (but) it’s been more than a transition. It’s been a crisis in certain segments, and I see a stabilization.”Article contentCaisse executives said the fund’s exposure to the United States has been stable, at around 40 per cent, despite a slight reduction to the country’s stock markets in favour of other markets including those in developing countries and some real estate sales. Some U.S. assets were sold and the money reinvested in Asia and Europe, they said, noting that the U.S. nevertheless remains the most liquid deep and dominating market.Article content“Are we exiting out of the U.S.? No,” Emond said. “But are we approaching it differently, given the circumstances… for sure.”Article contentArticle contentThe fund has also taken steps over the past year to reduce exposure to the U.S. currency through hedging. Performance in private markets has also reduced U.S. exposure, though that’s not part of the strategy, the executives said.Article contentRead More Cogeco shares fall 6% as Quebec's Caisse trims stake in $229-million share sale Why Caisse CEO Charles Emond thinks Canada is close to getting the infrastructure formula right Article content“The U.S. remains the deepest, most liquid and most attractive market for investors, broadly speaking, but the U.S. exceptionalism has actually been eroded lately, and the level of trust has been put to test,” Emond said.Article contentThe Caisse, which has a dual mandate of generating returns for pensioners contributing to Québec’s economic development, said it achieved its ambition to have $100 billion invested in Québec a year ahead of schedule.Article contentIn addition, there were nearly 60 investments outside Quebec last year.Article contentBut the standout performer for the Caisse was equity markets, a portfolio that recorded a 17.7 per cent return in 2025, the third-best performance in ten years.Article contentIn the year ahead, the pension giant, which also invests on behalf of some insurance depositors, said it will be closely monitoring three key areas: the promise and impact of artificial intelligence, the ongoing primacy of U.S. assets, and dynamics between public and private markets.Article contentOver the longer term, the Caisse has beat its benchmarks. The five year annualized return was 6.5 per cent, above the benchmark portfolio’s 6.2 per cent return. Over the ten years leading up to Dec. 31, 2025, the return was 7.2 per cent, beating the benchmark portfolio’s 6.9 per cent return.Article content• Email: bshecter@nationalpost.com Article contentTrending Canada's housing market suffers largest price decline among major economies, says BIS Real Estate Australia ships LNG 25,000 kilometres to Eastern Canada amid Asian slump Oil & Gas Posthaste: Canadian dollar is facing a big risk that markets seem to be overlooking News B.C. widow worried about retirement income with OAS clawbacks Family Finance Garry Marr: Mexico chaos shows it's time to start thinking of your vacation as an investment and hedge your bets Personal Finance Share this article in your social network Get the latest from Barbara Shecter straight to your inbox Sign Up CommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. 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