Despite a year marked by

trade

and geopolitical uncertainty, the

Caisse de dépôt et placement du Quebec

generated a 9.3 per cent return in 2025, boosted by strong stock markets, credit and infrastructure investments, with net assets climbing to $517 billion.

While turning in a strong performance — surpassing the returns of some of Canada’s other large

pension funds

— the Quebec pension giant’s gain was below its benchmark portfolio return of 10.9 per cent.

Private equity

underperformed due to slowing growth while real estate is still recovering from factors including the widespread move to remote work during the COVID-19 pandemic.

“In an environment shaped by uncertainty and profound changes that are likely to persist,

diversification

remains essential, allowing each asset class to play its part across different market conditions,” said Charles Emond, chief executive of the Caisse.

In real estate, there are signs rental incomes and property values are stabilizing, but the Caisse noted that this was offset by the high cost of financing.

“We are seeing progress but there’s still challenges,” Emond said. “There have been no fire sales… (but) it’s been more than a transition. It’s been a crisis in certain segments, and I see a stabilization.”

Caisse executives said the fund’s exposure to the United States has been stable, at around 40 per cent, despite a slight reduction to the country’s stock markets in favour of other markets including those in developing countries and some real estate sales. Some U.S. assets were sold and the money reinvested in Asia and Europe, they said, noting that the U.S. nevertheless remains the most liquid  deep and dominating market.

“Are we exiting out of the U.S.? No,” Emond said. “But are we approaching it differently, given the circumstances… for sure.”

The fund has also taken steps over the past year to reduce exposure to the U.S. currency through hedging. Performance in private markets has also reduced U.S. exposure, though that’s not part of the strategy, the executives said.

“The U.S. remains the deepest, most liquid and most attractive market for investors, broadly speaking, but the U.S. exceptionalism has actually been eroded lately, and the level of trust has been put to test,” Emond said.

The Caisse, which has a dual mandate of generating returns for pensioners contributing to Québec’s economic development, said it achieved its ambition to have $100 billion invested in Québec a year ahead of schedule.

In addition, there were nearly 60 investments outside Quebec last year.

But the standout performer for the Caisse was equity markets, a portfolio that recorded a 17.7 per cent return in 2025, the third-best performance in ten years.

In the year ahead, the pension giant, which also invests on behalf of some insurance depositors, said it will be closely monitoring three key areas: the promise and impact of artificial intelligence, the ongoing primacy of U.S. assets, and dynamics between public and private markets.

Over the longer term, the Caisse has beat its benchmarks. The five year annualized return was 6.5 per cent, above the benchmark portfolio’s 6.2 per cent return. Over the ten years leading up to Dec. 31, 2025, the return was 7.2 per cent, beating the benchmark portfolio’s 6.9 per cent return.

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• Email: bshecter@nationalpost.com