With Expectations of Commodities Boom, Caisse de Depot to Focus on Energy and Minerals

As demands for energy are expected to climb by as much as 40% in the next 20 years as incomes rise in emerging markets and as the global economy rebounds, the Caisse de Depot et Placement du Quebec plans to invest more heavily in energy and minerals.

(September 29, 2010) — The Caisse de Depot et Placement du Quebec, Canada’s biggest pension fund manager, aims to increase investments in energy and minerals.

According to Bloomberg, Chief Executive Officer Michael Sabia said investment in natural resources would position the fund to benefit from an unexpected commodities boom. More than half of the pension fund manager’s US-listed stock holdings are in energy and materials, Sabia told Bloomberg News in an interview. “Natural resources, energy, those are areas where we think there’s an opportunity to play offense because of what the structural trends are and what our capabilities are,” he said.

The Caisse oversees about $132 billion in assets including stakes in Quebec gas distributor Gaz Métro LP and Suncor Energy Inc., the country’s biggest oil company. An August 11 regulatory filing revealed more than half of the Caisse’s US-listed stock holdings of $11.3 billion consisted of shares in energy and materials.

Sabia has been touted for his “defensive” strategies, which have helped the Caisse beat its benchmark in the first half of 2010 with a return of 2.3%. “Defense is necessary but it’s not sufficient in the long term,” Sabia told Bloomberg. “We also need an offensive game plan.”

Excluding its real-estate operations, Caisse has approximately 700 employees, with about two-thirds of the Caisse’s net assets coming from Canada.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742