La Caisse de dépôt et placement du Québec generated a 5.1% return in the first half of 2026, trailing its benchmark as a sharp decline in private equity investments offset strong gains from listed equities, according to a report by Bloomberg.
The Montreal-based pension manager, which invests on behalf of the Quebec government and other clients, ended June with CAD552bn ($396bn) in net assets. Its six-month return compared with a 7.5% gain for its benchmark.
Private equity was the main drag on performance. The portfolio, which was valued at about CAD85bn at the beginning of the year, declined 4.3% during the period as investors reassessed companies exposed to the potential disruption from artificial intelligence.
The portfolio includes listed holdings WSP Global and Alstom, in which La Caisse is the largest shareholder. Their shares fell 29% and 40%, respectively, during the first six months.
Vincent Delisle, La Caisse’s head of liquid markets, said WSP had been treated by investors as an example of a business vulnerable to AI-driven disruption. He argued, however, that the technology could ultimately improve productivity and allow companies such as WSP to expand their client bases.
Digital wealth management platform FNZ Group, another significant La Caisse investment, has also faced pressure related to concerns about AI’s impact on parts of the financial services industry.
La Caisse’s public equity portfolio gained 14.6% in the first half, its strongest combination of returns and value creation for a six-month period in two decades, according to the pension manager.
Performance was boosted by exposure to global technology stocks, although La Caisse highlighted the unusually high concentration of market gains among a relatively small number of AI-related companies.
Other private assets provided a more positive contribution. Real assets returned 5.5%, supported by infrastructure and real estate investments. Office properties and shopping centres also showed signs of recovery following the disruption caused by the Covid-19 pandemic.
Fixed income generated a 1.7% return, with gains partly constrained by higher long-term US interest rates. La Caisse said conditions remained favourable for private credit, particularly in real estate and infrastructure.
Over the past decade, the pension manager has generated an annualised return of 7.5%, broadly in line with its benchmark.
Chief executive Charles Emond said the outlook for the remainder of 2026 is clouded by several factors, including the conflict involving Iran, its potential impact on inflation and interest rates, and questions over how sustainable the current AI investment cycle will prove.
Emond said investor expectations around AI demand and the profitability of the capital already being deployed into the sector were exceptionally high, creating the potential for greater volatility if those expectations are not met.
Despite those concerns, La Caisse continues to deploy capital into alternative assets and infrastructure.
Its latest transaction saw the pension manager join other Canadian pension funds and Blackstone in acquiring a 25% interest in Air Canada’s Aeroplan loyalty programme for CAD2.5bn.
