Despite market conditions causing 2011 to be a “roller coaster ride”, according to Caisse de dépôt et placement du Québec’s chief investment officer, real estate investments provided strong returns for the Canadian institutional fund manager last year.
According to La Caisse’s earnings statement released Thursday, its real estate portfolio generated C$3.1 billion (€2.31 billion, $3.1 billion) during the year, returning 11 percent, 4.7 percent below its benchmark.
Additionally, La Caisse's total assets in Québec grew by more than C$4.5 billion in 2011, now exceeding C$41 billion. During the year, the manager invested in approximately 100 different projects, including C$160 million in the acquisition of Montréal's Rockhill complex and nearly C$50 million in a dozen real estate projects, including the renovations of Mail Champlain and Château Frontenac.
After increasing the number of commitments to emerging markets following the granting of management mandates in equity markets in Brazil, China and India, La Caisse has adopted a plan to invest upwards of C$700 million in Brazilian real estate. “These investments are made in collaboration with local partners and are in step with the Caisse's long-term strategy,” according to the fund manager.
La Caisse’s private equity portfolio posted a 7.1 percent return in 2011, a year in which the institutional fund manager deployed C$2.5 billion in direct and fund investments and reaped more than C$1 billion in secondary sales.
“The past year was a real roller coaster ride, and market conditions considerably deteriorated in the second half of the year,” La Caisse executive vice president and chief investment officer Roland Lescure said in a statement.
La Caisse’s private equity performance came in slightly below its benchmark private equity return of 7.4 percent, and less than the 26.7 percent and 10.8 percent returns recorded in 2010 and 2009, respectively. La Caisse’s private equity performance brought the value of its private equity portfolio up to C$15.7 billion last year.
Additional reporting by James Comtois