Caisse de Depot Favors Big Companies Over Fixed Income

Caisse de Depot et Placement du Quebec is “significantly” reducing its weighting of bond assets and favoring stocks of large, global companies such as Nestle SA and Colgate-Palmolive Co., said Chief Executive Officer Michael Sabia.

“To me, there’s less risk sitting in that portfolio than sitting in a fixed-income portfolio,” Sabia said at the Bloomberg Economic Summit today in Toronto.

The Caisse posted a 9.6 percent investment return last year with the help of gains in real estate, public and private equity. Investment income amounted to C$14.9 billion ($14.5 billion) and depositors made net contributions of C$2.3 billion, the Montreal-based fund manager said in February. Net assets rose to C$176.2 billion as of Dec. 31, overtaking the C$172.6 billion managed by the Canada Pension Plan Investment Board.

Sabia, 59, is planning to increase investments in assets such as real estate, infrastructure and private equity to reduce volatility in its returns. He told reporters in January that the Caisse plans to add C$10 billion to C$12 billion in what it calls less-liquid investments in the next two years because the markets “are no longer a good gauge of value.”