The deposit fund wants to substantially increase the sums of money it entrusts to private funds even if it employs more than 1900 people in Quebec.
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• Read also: Caisse of deposit: management fees now exceed $ 3 billion
This is what two leaders of the Quebec institution have declared to specialized publication Private Equity International in recent months.
Bureau of the Caisse de Dépôt in Montreal.
Photo Pierre-Paul Poulin
Currently, 75% of the assets of the Caisse private investment portfolio are investments that the institution holds directly in unlisted companies on the stock market. The remaining share of 25% is made up of investments in private funds.
From 25% to 35%
By 2029, the fund wants investments in such funds to represent 35% of its private investment portfolio.
At the end of 2024, this portfolio was worth 90 billion $. From this amount, $ 22.5 billion (25%) were invested in private funds. If we use the new target of 35%, we get the sum of $ 31.5 billion. It’s $ 9 billion or 40% more.
You should know that private funds have management fees that can reach 2% of the sums placed. This is much more than the overall costs of the cash register, established at 0.67% in 2024. Internal placements cost even cheaper.
Last year, the head of private investment at the cash register, Martin Longchamps, explained to Private Equity International that the increased appeal to funds aimed to obtain better access to potential transactions thanks to the business relations cultivated by large investment firms and to identify “optimal” yields.
The head of private investments for America and Asia-Pacific, Alexandre Décary, told the publication last month, that the decision to bet more on the funds was “critical” for the fund.
“Direct investments [dans des entreprises] will remain most of the portfolio, “he said.
Alexandre Décary.
Photo Finance Montréal
The proportion of private investments of the fund which has been invested in external funds has been around 25% since 2017.
It reached 44% in 2014 and 2015.
“It is important to clarify that this target of 35% for private funds, in the long term, relates to the international portion [hors Canada] of the wallet only and not on the wallet [de] private investments as a whole. Currently, for the international, the proportion of funds is around 30%, “said a spokesperson for the cash register, Marjaurie Côté-Boileau.
According to her, “reinforced relations with fund managers will allow us to have access to more direct investments”.
Nearly $ 1.7g in fees
Last year, the cash management fees exceeded $ 3 billion for the very first time.
From this amount, no less than $ 1.66 billion were paid to external managers, especially in the private investment and real estate sectors.
The internal management of the cash register cost $ 1.05 billion while the transaction costs amounted to $ 335 million.