An anemic private equity return of 2.3% dragged down the portfolio of Canadian pension La Caisse (formerly Caisse de dépôt et placement du Québec) in 2025, as its overall 9.3% gain fell short of the fund’s benchmark portfolio’s 10.9% return. The pension fund’s asset value rose to C$517 billion ($378 billion) from C$473.3 billion in 2024.
For the year, all of the pension fund’s asset classes underperformed, except for its fixed-income portfolio.
However, over the longer term, La Caisse has outperformed the benchmark. Five-year annualized returns were 6.5%, topping the benchmark’s 6.2% return; and over 10 years, the portfolio registered a 7.2% annualized return, versus 6.9% for its benchmark.
The year’s private equity performance was a far cry from the 12.6% benchmark return, which La Caisse attributed to slowing earnings growth for its portfolio companies, as well as lower multiples in the tech and health care sectors. Despite performing well since their initial investments, some had a setback, according to La Caisse, putting a drag on its performance. The pension also noted that the benchmark index is half made up of public stocks, which outperformed the private market during the year.
Despite the equity markets portfolio’s 17.7% return, its third-best performance in the last 10 years, it still fell short of its benchmark’s 18.2% gain. La Caisse blamed the 50-basis-point gap on a “limited contribution” from local Quebec investments and on low exposure to gold, which rose significantly during the year.
The real assets portfolio missed its benchmark by a wide margin, gaining 9.2%, versus a 13.4% return for its benchmark. The pension’s top performers within the asset class were its energy, ports and highway investments, while real estate was a burden on the portfolio, eking out a 0.2% gain, while its benchmark returned 1.8%.
Among its real estate investments, La Caisse registered a promising 4.4% on its direct portfolio assets in the logistics and residential sectors, as well as in offices and shopping centers. The pension took this as a sign that that property values and rent income are becoming stable. However, this was nearly canceled out by disappointing returns among its assets in China.
Fixed income was the only asset class that outperformed, returning 6.6% against its benchmark’s 4.6% gain, which was its largest recorded margin over the index. La Caisse attributed the strong performance to its credit investments, which returned 9.6%, buoyed by emerging market sovereign debt holdings.
La Caisse manages the funds of 48 depositors—mainly for pension and insurance plans in the Canadian province of Quebec.
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Tags: Asset Allocation, Caisse de dépôt et placement du Québec (CDPQ), fixed income strategies, investment performance, Private Equity