Caisse de dépôt et placement du Québec’s (CDPQ) President and CEO Michael Sabia has announced he will be departing from the institution in February 2020 after more than 11 years.
He departs to become head of the Munk School of Global Affairs and Public Policy at the University of Toronto. Before joining CDPQ, he was the chief executive of BCE Inc., a Canadian telecommunications holding company.
Under his stewardship, CDPQ’s portfolio enjoyed significant diversification while nearly tripling its assets under management ($120.1 billion to $326.7 billion), with a focus on helping to grow the local Quebec economy.
“With this approach, CDPQ has diversified sources of return to meet the needs of our depositors,” the institution said in a statement. Sabia helped shepherd a substantial globalization of the portfolio, bringing its holdings, which were 64% invested in Canada in 2009, to being 64% invested in global markets.
Notably, he also fully embraced a vision for intertwining public pension fund and infrastructure projects while substantially benefitting the local economy. Sabia helped CDPQ engage, fund, and develop the Réseau express métropolitain (REM), a C$6.3 billion rapid transit system in the Greater Montreal area, linking several suburbs to the downtown area.
CDPQ’s efforts represent the first time a public pension fund has attempted to design, build, and operate a public transit system.
“Throughout this period, my goal has been to realize the full potential of this unique institution to benefit the people of Québec,” Sabia said in a statement. “I know that I am leaving CDPQ and its people in a strong position to seize the many opportunities that lie ahead for them as I move on to my next challenge.”
Sabia and his team also developed an investment strategy to address climate change, seeking to ultimately reduce the portfolio’s carbon intensity by 25%.
CDPQ beat its benchmark with an annualized return of 8.3% for the five fiscal years ending June 30 2019, representing net investment results of C$103.8 billion. The pension’s efforts in real assets produced the most profound returns for the C$309.5 billion institution, generating 9.0%, higher than its fixed income and equities portfolios, which generated 2.1% and 3.5% in the period, respectively.
“Courageously stepping up to the challenge of leading CDPQ in 2009 following the financial crisis, Michael and his team step by step have rebuilt the organization and repositioned it with new ideas, while creating international career opportunities for Québec’s finance professionals,” said Robert Tessier, CDPQ’s chairman of the board. “Today, CDPQ is a world-class investor with a strong reputation in global markets and a major contributor to the revitalization of the Quebec economy.”