Trump's policies push CAAT to eye Canadian infrastructure and diversify beyond volatile US markets
CAAT Pension Plan has increased its focus on domestic infrastructure and real estate investments, as it continues to pursue long-term returns while responding to volatility in global markets.
This shift aligns with ongoing disruptions stemming from US President Donald Trump's unpredictable trade policies, according to Bloomberg.
The pension plan, which is based in Toronto, stated on Tuesday that Canadian investments now account for about one-quarter of its $23.3bn portfolio. CAAT reported a 15.2 percent return for 2024.
Chief Investment Officer Asif Haque said in an interview, “We are very interested in continuing to invest in our own country.”
He added that CAAT is also “intrigued” by European private markets and investment prospects in Asia.
CAAT's investment returns for the year were driven by a mix of public and private assets.
Public equities rose by 29 percent, private equity returned 16 percent, commodities gained approximately 17 percent, and credit increased by 11 percent. Real assets delivered a return of 4.6 percent.
Real assets currently represent 17 percent of CAAT’s holdings.
The fund plans to expand that share to 25 percent. It has already made moves in this direction by investing in energy transition projects, industrial real estate and multiresidential properties.
Originally established to serve Ontario’s college system, CAAT now manages pensions for more than 700 employers and over 110,000 members across multiple sectors.
Canadian pension funds more broadly are facing new challenges in 2024. Trump’s trade policy has affected the outlook for US private equity and disturbed public markets.
While Haque acknowledged the concern around volatility, he said he also sees “pockets of opportunity” in both public and private markets.
Other major institutional investors in Canada have also begun reassessing their positions in the US.
According to The Financial Times, the Canada Pension Plan Investment Board (CPPIB) is considering shifts in its US strategy amid risks to tax advantages and increasing political instability.
Similarly, Caisse de dépôt et placement du Québec (CDPQ) acknowledged that while it retains significant US exposure, the environment has become more difficult to navigate.
As reported by Business Insider, Canada’s exposure to US real estate faces heightened risk as pensions reassess their global positions under the threat of trade reprisals.
