CDPQ posted a 9.4 percent return in 2024, trailing its benchmark, while equities and infrastructure gained
CDPQ reported a weighted average return of 9.4 percent on its depositors’ funds for the year ending December 31, 2024, below its benchmark portfolio’s 11.8 percent return.
Over five years, the annualized return was 6.2 percent, surpassing the benchmark’s 5.9 percent. Over ten years, CDPQ achieved a 7.1 percent return, exceeding the benchmark portfolio’s 6.5 percent.
As of December 31, 2024, CDPQ’s net assets stood at $473bn.
CDPQ President and CEO Charles Emond noted that the 2024 market environment was shaped by a strong US economy, rising long-term bond yields, and high concentration in major stock indexes led by technology firms.
“During this period, our performance was driven by our equity market, private equity and infrastructure activities, but was affected by persistent headwinds in real estate, particularly in the US office sector,” said Emond.
He highlighted that the Québec Pension Plan, which covers over six million Quebecers, posted an 11.0 percent return for the year.
CDPQ’s total investment results were $40bn for one year, $116bn over five years, and $223bn over ten years. It manages funds for 48 depositors, primarily pension and insurance plans, with investment strategies tailored to their individual risk tolerances and policies.
Returns varied significantly among the nine largest depositor funds due to differences in asset allocation. One-year returns ranged from 6.7 percent to 11.1 percent, while five-year annualized returns were between 4.2 percent and 7.3 percent.
Over ten years, annualized returns ranged from 5.7 percent to 8.1 percent.
The Québec Pension Plan’s base plan, managed by Retraite Québec, recorded an 11.0 percent return for one year, 7.3 percent over five years, and 8.1 percent over ten years.
Its net assets, including the additional plan, reached $142bn at year-end.
Equities performance
CDPQ’s Equity Markets portfolio was its primary performance driver, returning 25.5 percent in 2024, surpassing its benchmark’s 24.1 percent. The portfolio benefited from increased exposure to growth and tech stocks, particularly those in artificial intelligence.
Over five years, its annualized return was 10.5 percent, slightly below the benchmark’s 11.1 percent, due to underweighting US tech stocks in 2020.
The Private Equity portfolio rebounded in 2024, delivering a 17.2 percent return after a challenging 2023. Growth in the industrials and consumer goods sectors contributed to the recovery.
However, the portfolio trailed its benchmark, which posted a 20.8 percent return, reflecting a greater exposure to public markets and large tech firms.
Over five years, the portfolio’s annualized return was 15.4 percent, surpassing its index’s 14.1 percent due to allocations in financials, consumer goods, and technology, as well as investments in Québec.
Fixed income and real assets
Fixed Income saw a 1.3 percent one-year return, slightly below its benchmark’s 1.4 percent.
Despite monetary easing by major central banks, long-term US bond yields rose due to economic strength and fiscal policy uncertainties.
Over five years, the asset class had an annualized return of 0.2 percent, outperforming the benchmark’s -0.5 percent, with strong credit activities offsetting past market corrections.
Infrastructure assets posted a 9.5 percent return, supported by strong port and energy investments. The index, however, gained 15.0 percent, boosted by energy and electricity stocks benefiting from AI-driven demand.
Over five years, the portfolio returned 10.0 percent annually, exceeding its benchmark’s 5.4 percent, with renewable energy, ports, and telecommunications contributing the most.
Real Estate continued to face challenges, especially in the US office sector.
The portfolio returned -10.8 percent for the year, significantly below its benchmark’s 1.0 percent. High exposure to office assets in New York and Chicago weighed on performance.
However, logistics and shopping centres remained resilient. Over five years, the portfolio returned -2.2 percent annually, compared to its benchmark’s 0.7 percent, as past overexposure to shopping centres and US office properties continued to affect results.
Investments in Québec
CDPQ deployed $4.3bn in new Québec investments, bringing its total assets in the province to $93bn. It aims to reach $100bn by 2026.
Key investments included:
- $500m for National Bank’s acquisition of Canadian Western Bank
- Support for Nuvei’s transition to private ownership, valuing it at over US$6bn
- Equity investment in QSL International, a maritime logistics firm
- $158m in WSP for acquiring US-based POWER Engineers
- $378m in Saputo shares, making CDPQ one of its largest shareholders
- $25m in Groupe Dynamite’s IPO to support international expansion
Infrastructure projects included agreements with the Québec government for the TramCité project and continued testing of the Réseau express métropolitain (REM), set to expand in fall 2025.
CDPQ also provided a $103m loan for Vantage Data Centers’ Québec City expansion.
In sustainable investments, CDPQ backed Norda Stelo’s acquisition of InnovExplo to strengthen Québec’s critical minerals sector. It also committed $35m to MKB Partners Fund III for energy transition investments.
CDPQ plans to double external Québec asset management allocations to $8bn by 2028.
Sustainable investment and financial reporting
CDPQ ranked among the top pension funds for sustainability. It placed first among pension funds in Global SWF’s 2024 GSR Scoreboard and fourth in Top1000funds.com’s transparency ranking.
It also ranked second in the World Benchmarking Alliance’s Financial System Benchmark. CDPQ’s Sustainable Investing Report, set for spring release, will provide further details on its climate targets.
Operating costs fell in 2024, with total investment management costs at 67 cents per $100 of average net assets, down from 83 cents in 2023. Operating expenses were 23 cents per $100 of assets, down from 26 cents.
Credit rating agencies reaffirmed CDPQ’s AAA ratings from DBRS, S&P, Moody’s, and Fitch, with a stable outlook.
