- Caisse de dépôt et placement du Québec, the province’s most prominent pension manager, has invested C$600 million with Fiera Capital (TSX:FSZ), a leading Quebec asset management firm
- The allocation is part of CDPQ’s ambition, announced in 2023, to more than double its allocation to Quebec asset managers to C$8 billion by 2028
- Fiera Capital, assets under management C$165.2 billion, delivers customized and multi-asset solutions across public and private markets to clients in North America, Europe and Asia
- Fiera Capital stock has added 25.38 per cent year-over-year, but has given back 25.79 per cent since 2019
Caisse de dépôt et placement du Québec (CDPQ), the province’s most prominent pension manager, has invested C$600 million with Fiera Capital (TSX:FSZ), a leading Quebec asset management firm.
Fiera will invest the capital in international expansion through its active and strategic fixed income and Fiera Atlas Global Companies strategies.
The allocation is part of CDPQ’s ambition, announced in 2023, to more than double its allocation to Quebec asset managers to C$8 billion by 2028. This pledge is in addition to the institution’s objective of reaching C$100 billion in Quebec-based investments by 2026.
Fiera’s capital infusion follows CDPQ’s investments in Quebec firms including Bastion Asset Management, Montrusco Bolton Investments and Van Berkom Global Asset Management, as well as widespread government and industry support for Canadian pension funds to increase domestic investments, foster innovation and bolster the country’s economic resilience.
Leadership insights
“Contributing to Quebec’s economic development is at the heart of CDPQ’s mission,” Vincent Delisle, executive vice president and head of liquid markets at CDPQ, said in a statement. “By entrusting C$600 million to Fiera Capital, a well-established and successful manager, we are benefiting from local financial expertise and supporting the growth of Quebec’s asset management industry, while also contributing to the diversification and performance of our portfolio.”
“CDPQ’s renewed trust in Fiera Capital, a pillar of Quebec finance, underscores our role as an investment leader,” added Maxime Ménard, president and chief executive officer of Fiera Capital Canada and Global Private Wealth. “Fiera Capital stands out for its ability to offer optimized portfolio solutions, combining innovation and precision in risk and return management. Our commitment to excellence allows us to meet the diverse needs of our clients.”
About CDPQ
CDPQ is one of the largest institutional investors in the world with more than C$434 billion in assets as of Dec. 31, 2023, spread across major financial markets, private equity, infrastructure, real estate and private debt.
About Fiera Capital
Fiera Capital, assets under management C$165.2 billion, delivers customized and multi-asset solutions across public and private markets to clients in North America, Europe and Asia.
Fiera Capital stock (TSX:FSZ) is down by 0.12 per cent trading at C$8.20 per share as of 9:53 am ET. The stock has added 25.38 per cent year-over-year, but has given back 25.79 per cent since 2019.
Private Capital Journal also reports CDPQ allocates $600M to Fiera Capital, part of an $8B allocation to Quebec fund managers:
CPE News (7.31.2024) – CDPQ has invested $600 million in Fiera Capital’s Active and Strategic Fixed Income and Fiera Atlas Global Companies strategies.
The investments is part of CDPQ mission/ambition to increase the funds entrusted to Québec asset managers to $8 billion by 2028. Within four years, CDPQ intends on more than doubling the amounts it entrusts to Québec fund managers.
This commitment is complementary to CDPQ’s global objective of reaching $100 billion in investments in Québec by 2026.
CDPQ has recently made investments in the Québec Emerging Manager Program (QEMP), and the Investi and Inovia Capital funds. It also entrusted sums to Québec portfolio firms including Bastion Asset Management, Montrusco Bolton Investments and Van Berkom Global Asset Management.
Earlier today, CDPQ issued a press release stating it is assigning $600 million to Fiera Capital as part of its ambition to allocate $8 billion to Québec fund managers:
CDPQ, a global investment group, today announced that it has invested $600 million with Fiera Capital, a leading Québec asset management firm, as part of its ambition to increase the funds entrusted to Québec asset managers to $8 billion by 2028.
This investment is part of CDPQ’s commitment to support Québec’s financial expertise and to stimulate growth in the local asset management industry. Within four years, CDPQ intends on more than doubling the amounts it entrusts to Québec fund managers. This commitment is complementary to CDPQ’s global objective of reaching $100 billion in investments in Québec by 2026.
The $600 million invested with Fiera Capital will also support the firm’s international expansion and will be allocated to its Active and Strategic Fixed Income and Fiera Atlas Global Companies strategies. In addition, CDPQ has recently made investments in the Québec Emerging Manager Program (QEMP), and the Investi and Inovia Capital funds. It also entrusted sums to Québec portfolio firms including Bastion Asset Management, Montrusco Bolton Investments and Van Berkom Global Asset Management.
“Contributing to Québec’s economic development is at the heart of CDPQ’s mission. By entrusting $600 million to Fiera Capital, a well-established and successful manager, we are benefiting from local financial expertise and supporting the growth of Québec’s asset management industry, while also contributing to the diversification and performance of our portfolio,” said Vincent Delisle, Executive Vice-President and Head of Liquid Markets at CDPQ.
“CDPQ’s renewed trust in Fiera Capital, a pillar of Québec finance, underscores our role as an investment leader. Fiera Capital stands out for its ability to offer optimized portfolio solutions, combining innovation and precision in risk and return management. Our commitment to excellence allows us to meet the diverse needs of our clients,” said Maxime Ménard, President and CEO of Fiera Capital Canada and Global Private Wealth.
ABOUT CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2023, CDPQ’s net assets totalled CAD 434 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.
It's Wednesday and I have to admit, when I first received this press release and only read the title, my first thought is why is CDPQ allocating to Fiera Capital and not other established funds here like Addenda Capital, LetkoBrosseau and others?
In fact, I fired off an email to Charles Emond, Vincent Deslisle and Kim Thomassin stating I have nothing against Fiera Capital but why not allocate to other established players too (and mentioned the firms above)?
Kate Monfette, Director of media relations at CDPQ, responded to my earlier email this afternoon:
In response to your question to Charles/Vincent/Kim, the allocation of external mandates depends on our needs for complementary and performance. Our team has carried out several analyses and other potential candidates should join the list in the coming years. We already have mandates with firms such as Montrusco, Van Berkom, and Bastion.
My mistake as after reading the full press release in detail and realized this is part of an $8 billion program to allocate to Quebec fund managers and there will likely be more large tickets to come to established Quebec investment managers.
I had no idea about this program at all, didn't even know CDPQ had given large allocations to Bastion Asset Management, Montrusco Bolton Investments and Van Berkom Global Asset Management.
I have mixed feelings about this program and will explain in detail below.
On the one hand, this is all part of CDPQ's dual mandate to deliver high risk-adjusted returns and to develop Quebec’s economy.
That part I get and take no issue with as we have some very established investment firms here that have very longs and respectable track records (some better than others).
But when all is said and done that's $8 billion going to Quebec investment managers instead of going to the best private equity or global investment managers including elite global hedge funds.
Yes, CDPQ already invests there but the point I'm getting at is this: on the one hand we want Canada's large pension funds to invest more domestically which a case has been made but the flip side of this in my humble opinion is we need hell of a lot more transparency and accountability, just like we should have for foreign investments.
In other words, if CDPQ wants to allocate $8 billion to Quebec investment managers, great but please inform us of the exact criteria you're using, who is responsible for these allocations and what is the performance (short-term and long term) of these managers and the entire Quebec fund program.
I used to allocate to top global hedge funds when I was working at CDPQ 20 years ago (been that long) and saw my share of the good, the bad and the ugly in fund allocations.
More than anything, it's a relationship business and to be truthful, it's a very hard game to consistently produce decent returns.
The 2008 GFC rattled Ontario Teachers' mighty hedge fund program and shut down Desjardins Asset Management's fund of hedge funds which was the largest back then with over $5 billion in assets under management.
Since then, a lot of small hedge funds have sprung up in Quebec, some even got allocations from the Quebec Emerging Manager Program (QEMP), and the bulk of them have closed shop (again where is the transparency here???).
Seeding hedge funds is very tough, even guys and gals that come from elite hedge funds fail, so I was always very skeptical of this endeavour.
To be even more brutally honest, markets are tough, especially these markets where concentration risk is high as a few mega-cap tech stocks dominate the indexes.
Active managers have lagged their benchmark and I understand exactly why, and while this will not last forever, it's a very tough business managing money.
Every single day, I'm talking stocks BEFORE markets open and not just biotech stocks, all stocks with traders and investors I respect who know what they're talking about.
It's a crazy market when you see Tesla and Nvidia swinging like crazy but even in these markets, you can find gems (like AbbVie and Intact Financial Corporation here in Canada that are breaking out on their 5-year chart, making new highs, for example).
But there are so many risks, macro and idiosyncratic risks that managing money these days is anything but easy (it never was easy but it's increasingly getting harder and harder).
All this to say, there is an opportunity cost of investing in Quebec fund managers, it might be worth it because we are bolstering Quebec's economy and financial ecosystem but let's be completely transparent about it.
The other concern I have about this endeavour is some critics who email me stating we are going back to the old Quebec Inc days when Jean-Claude Scaire and Michel Nadeau were running the Caisse and giving handouts to Quebec companies and fund managers.
This "all in the Quebec Inc family" was disastrous back then precisely because there was no accountability and transparency and to be honest, it tarnished the reputation of the organization.
CDPQ isn't the old Caisse, that I'm sure of as post-Sabia, there's a lot better governance, risk management and accountability and Charles Emond has maintained this.
But we cannot go back to the the old Quebec Inc ways and like it or not, these large allocations has a lot of people talking.
I'll give you an example. Someone told me Charles Emond and Fiera's CEO Maxime Ménard go back to their Scotia Bank days and that's why they got the allocation. And Vincent Deslisle also came from Scotia Bank and also knows Maxime Ménard well.
So what? Maybe this has nothing to do with Charles Emond and Vincent Deslisle. Maybe Quebec premier and Finance minister Francois Legault and Eric Girard told CDPQ to allocate these monies to Quebec fund managers at their discretion to bolster Quebec financial sector.
Whatever the case, my point is simple, when well-known Quebec investment firms get large allocations from CDPQ, people talk a lot and nasty rumours are spread easily.
This is why I personally am against Canadian pension funds investing in Canadian funds with some exceptions (like Brookfield and some other global elite firms).
Lastly, Fiera Capital's founder, chairman and global CEO, Jean-Guy Desjardins, is already very wealthy as are the founders of other established Quebec funds, so some may rightly ask "why are we making these people even richer using Quebec pension monies?"
Well, my answer to that is the same as if we were giving an allocation to Ken Griffin or Izzy Englander, if they can deliver the long-term risk adjusted returns, they merit the allocation. Full stop.
But again, we need full transparency here to know how this program is performing.
And one last thing, why not allocate $2 billion to internal global macro fund at CDPQ? I can personally suggest very experienced people with tons of experience that can make a lot of money internally without paying external managers any fees. Just pay them properly.
Alright, those are my thoughts on this topic, if you have anything to add, you know where to find me.
Below, a recent interview with Fiera Capital's founder,chairman and global CEO jean-Guy Desjardins (in French) going over Canada's prospects after the latest federal budget.
I'll tell you right away, Canada is toast when the next global recession strikes and the sooner we get rid of the Liberals, the better off this country will be. FULL STOP!