Caisse portfolio: 33 billion evaporated

The Caisse de depot et placement du Québec (CDPQ) has finally written off its investment of around $200 million in Celsius Network, a turnip in the cryptocurrency sector.

BOOF! This is part of the colossal sum of $ 33.6 billion that the Caisse de depot et placement lost during the first half of 2022, on paper we agree, following the severe correction in the financial markets.

To fully “appreciate” this immense “loss on paper”, know that it is barely 6 billion dollars less than the gigantic loss of 39.8 billion dollars recorded by the Caisse de depot in 2008, when of the Canadian commercial paper crisis and that of American subprime mortgages.

That said, as everything is relative, it should be noted that the current half-year loss of $33.6 billion represents only a decline of 7.9% given the size of the Caisse de dépôt’s assets, i.e. 420 billion by the end of December 2021.

In 2008, the loss of nearly $40 billion represented a 25% drop from net assets of $155 billion at the end of 2007.

Self-congratulation session

The Caisse even found a way to congratulate itself by commenting yesterday on the half-year loss of nearly $34 billion and 7.9%.

“During the worst semester of the last 50 years for the stock and bond markets, the CDPQ recorded an average return over six months of -7.9%, significantly above its benchmark portfolio, which stands at -10.5% , says one in the press release on the results of the Fund. Over five years and over ten years, the annualized returns are 6.1% and 8.3% respectively, also higher than those of the benchmark portfolio. »

Eh yes ! the Caisse de dépôt boasts of posting a smaller loss than that recorded by “its” benchmark portfolio.

The big boss of the Caisse, Charles Emond, added, praising the work of his team of portfolio managers: “Despite these turbulences, the evolution of our strategy initiated at the start of the pandemic, the healthy diversification of our assets and the quality of the teams’ execution enabled the overall portfolio to continue to outperform its benchmark portfolio. »

Here is the Caisse’s “performance” in the major asset classes compared to that of “its” benchmark indexes, which you will find in parentheses.

  • Fixed Income: -13.1% (-15.1%)
  • Real assets: +7.9% (+2.4%)
  • Equities: -10.6% (-11.9%)

In the documents submitted to the media, the Caisse even boasts of having achieved during the first half of the year the “highest added value since 2010”, nothing less. The Caisse estimates this “added value” at $11 billion!

Explanation of this boast. With its six-month return of -7.9%, the Caisse lost $33.6 billion. The Caisse has calculated that this is $11 billion less than the theoretical loss of $44.6 billion for the benchmark portfolio, whose half-yearly return is -10.5%.

This is where the supposed $11 billion “added value” came from that Charles Emond and his team of portfolio managers realized by reporting a negative return of 7.9% in the first half of 2022.

Important fact to note: when portfolio managers, like those of the Caisse, insistently remind us that they have achieved a “better” performance than their reference portfolios, this suggests that they deserve bonuses, and this, even in the case of a negative portfolio return.


Since the start of the second half, the stock markets have recovered considerably from the heavy stock market losses incurred up to June 30.

The major North American indices (Dow Jones, S&P 500, Nasdaq, S&P/TSX) have managed to recoup more than half of their losses so far.

But from there to recovering by the end of the year the rest of the stock market losses incurred in the first half, it is far from the cut to the lips!

Inflationary pressures, rising interest rates, fears of a pronounced economic slowdown… remain omnipresent.

But let’s be reassured, by December 31, Charles Emond and his portfolio managers will just have to beat “their” benchmark indices for the Caisse to realize “added value” even if it were to end the year in the red!

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