Markets Need Builders Not Traders for Stability: Sabia

Markets need more investors acting like builders than looking for short-term gains to reduce expected volatility in the coming years, said Michael Sabia, who runs Canada’s second-largest pension fund manager.

“You have a world of uneven growth, a fragile economy, not a world in crisis, but one that is hanging onto growth by its fingernails,” Sabia, chief executive officer of the Caisse de Depot et Placement du Quebec, said today in a speech in Toronto.

Long-term investors like the Caisse are willing to weather the short-term fluctuations in the market, and help encourage CEOs to look past near-term gains in favor of building a sustainable business.

“We’re builders, not traders,” Sabia said.

Montreal-based Caisse oversees C$215 billion ($191 billion) in assets, and has been scouring the globe for real estate, infrastructure and other businesses opportunities. Such investments should provide stability through the volatile markets he expects in 2015 and 2016 as central banks scale back on their stimulus plans, Sabia said in an interview at Bloomberg’s headquarters in New York on Nov. 20.

Ivanhoe Cambridge Inc., the Caisse’s real estate arm, has been particularly active in the U.S. this year. Ivanhoe agreed earlier this week to acquire two adjoining office buildings in downtown Seattle for $280 million.

Ivanhoe last week also agreed to buy Manhattan’s 1095 Avenue of the Americas, a 42-story office tower on Bryant Park, from Blackstone Group LP for about $2.25 billion, Sabia confirmed during his speech.

Sabia has said there are plenty of investment opportunities in the U.S., in particular in developing its crumbling infrastructure, if state governments would only open the doors to outside investors like the Caisse.

“Even in the face of volatility and slower global growth there are opportunities if you know where to look, know what you’re doing and have the right partners,” Sabia said.

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