CDPQ posts double-digit private equity returns in 2016

The C$270bn Canadian pension and insurance asset manager’s net private equity assets also rose 16% from 2015 to 2016.

The private equity portfolio of la Caisse de dépôt et placement du Québec (CDPQ) had strong returns for 2016 compared with those in the previous year.

According to CDPQ’s annual results for 2016 released on Friday, the Québec-based investor realised a 14 percent net internal rate of return for the year ended 31 December. This is a significant improvement from performance of the year ended 31 December 2015, when the private equity portfolio realised 8.4 percent net IRR, according to its 2015 annual report.

The private equity portfolio also beat its index benchmark, which returned 8.8 percent for 2016.

CDPQ’s outperformance in private equity contrasts with its American counterparts, such as the California Public Employees’ Retirement System and the California State Teachers’ Retirement System.

As reported by Private Equity International, CalPERS’ private equity portfolio returned 1.7 percent net IRR for the fiscal year ended 30 June, while CalSTRS’ private equity portfolio returned 2.85 percent for the fiscal year ended 30 June, mostly hurt by its Underserved Urban & Rural California strategy that targets investments in underserved Californian communities.

During 2016, CDPQ invested C$7.8 billion ($5.93 billion; €5.61 billion) in private equity, including in the US its co-investment alongside fellow Canadian pension fund Public Sector Pension Investment Board, Bahrain-based Investcorp Group and advisor AlixPartners founder Jay Alix in AlixPartners in November.

CDPQ managed C$30.4 billion in net private equity assets as of 31 December, up from C$26.1 billion at the end of 2015. The recent figure represented 11.2 percent of CDPQ’s total portfolio of C$270.7 billion, slightly above the 10.5 percent private equity allocation at the end of 2015.

According to the 2015 annual report, CDPQ’s target allocation range for private equity is between 8.1 percent and 14.9 percent.

CDPQ was not available to comment.