La Caisse de dépôt et placement du Québec, the management company for the pension funds of Québec, will be looking to increase its exposure to alternatives as its balance sheet increases.
Speaking at PEI's Hong Kong Forum, executive vice president Andreas Beroutsos said that as its assets under management, which hit CA$225.9 ($185.2; €165.9) billion at December 31st 2014, reach $300 billion over the next four or five years, La Caisse will look to push its allocation to real estate, infrastructure and private equity up from CA$75 billion to around CA$110 billion.
“We're trying heavily to increase illiquids,” Beroutsos said.
La Caisse – which began its direct investing programme before it began allocating to private equity funds – currently invests around $26 billion in private equity, with roughly $9 billion allocated to funds and $17 billion in direct investments. This is set to increase to between CA$35 billion and CA$40 billion, with the fund allocation increasing to between $12 billion and $14 billion.
Beroutsos says that although La Caisse has been successful in Europe and the US “we have been ineffective [in] cracking the Asia market”.
“We need to do this,” he said. “We've spent a ton of time analysing funds, analysing direct investments, and we've very, very little to show for it.”
Beroutsos, who said he tries to deploy between CA$500 million and CA$750 million in Asia per year, said he “really desperately need[s] to be in Asia”, but that he won't be pushed into making more deals or backing more funds in the region unless he can find the right opportunities.
“I still will not do this unless we actually find the right managers or the right deals,” he said.
Although La Caisse's private equity portfolio as a whole is more heavily weighted toward direct deals, Beroutsos said this is likely to be the reverse in Asia as the market is “a very, very, very hard market”. However, he added that La Caisse seeks to be an active investment partner rather than a passive source of capital.
“I'm trying to get a different way of interacting with people,” he said. “I'd like to be involved in transactions earlier, I'd like to be involved in transactions directly.”