Our Profession, Investor

 
Sophisticated Investment Expertise

The Caisse de dépôt et placement du Québec is one of Canada’s largest institutional investors. It invests the funds of its clients, the depositors, and strives to make profitable investments by using a range of financial products.

These investments are made by teams of portfolio managers and financial analysts. They are supported by other finance specialists, including traders, economists, actuaries, accountants and lawyers. They invest assets under management in accordance with the performance objectives and risk limits established by each depositor.

The depositors are mainly Québec public or private pension funds and insurance plans. They deposit with the Caisse sums they administer on behalf of their contributors. The depositors are responsible for managing the programs and commitments for their contributors (employees, pensioners, beneficiaries, etc.) and for paying them directly their pensions and benefits. The Caisse is a fund manager. It does not administer any pension or insurance plan.

SIX GUIDELINES
The Caisse’s portfolio managers follow six main principles to make profitable investments and achieve an attractive return on the funds entrusted to them: 

1- Active Management
Capitalize on investment opportunities in all financial markets by adapting strategies to the different economic, political and social issues.

2- Fundamental, Opportunistic Approach
Emphasize the intrinsic value of companies as well as their potential for profitability and value creation over the medium and long terms.
 
3- Open Management
Use external management or partnerships to complement in-house expertise, particularly in the case of certain distant markets.

4- Internal Research and Investment Process
Invest on the basis of research performed by internal teams and a rigourous analytical process.

5- Risk Management
Optimize the risk level and allocation by using a range of financial products and various management styles and by investment diversification based on company size, geographic location or sector of activity.

6- Manager Accountability
Ensure that portfolio managers are fully accountable for the results they produce.

WELL-ORGANIZED DIVERSIFICATION
When managing a large portfolio the size of that of the Caisse, the notion of diversification is fundamental in order to:

• Take advantage of the returns offered by the different financial markets;
• Ensure sound risk management;
• Generate the returns depositors expect.

The Caisse makes sure its overall portfolio is well diversified by choosing an asset mix that reflects the investment decisions of all its depositors. The investment teams then pay special attention to the diversification of their respective portfolios by selecting the most promising securities, companies, sectors and countries.

Overall, the Caisse’s investments are widely diversified in three ways: by investment type, by region of the world and by industrial sector.

For more information: Breakdown of Portfolio.

A RESPONSIBLE INVESTMENT APPROACH
In exercising its profession, the Caisse acts as a responsible company as it believes that good governance practices, respect for the environment and a contribution to the community have a positive influence on company profitability and growth.

The Caisse has adopted the following approach with respect to responsible investments:

• Gradually  integrate social, ethical and environmental criteria into the models it uses to analyze business performance;
• Encourage companies in which it invests to act responsibly;
• Make its positions clearly known by exercising its right to vote at shareholder meetings;
• Collaborate with international investors to promote the UN’s Principles for Responsible Investment;
• Participate in other initiatives that help achieve this objective, such as the Carbon Disclosure Project.

For more information: Corporate Responsibility brochure (PDF).