GLOBAL - The Caisse de dépôt et placement du Québec - asset manager for a number of government and private pension schemes in Canada's French-speaking province - generated a 4% return in 2011 due mainly to its infrastructure assets.
According to its annual results, the pension fund manager returned 4% over 2011, slightly below its benchmark portfolio of 4.2%, but realised its strongest performance in the infrastructure area, which returned 23.3%.
The Caisse attributed the return to the "robust" operational performance of portfolio companies and falling long-term interest rates.
It also cited the performance of energy and airport service assets, which returned substantially above their infrastructure benchmark index of 12.7%.
Infrastructure assets are part of the Caisse's Inflation-Sensitive Investments category, alongside real estate and real return bonds.
In 2011, the Canadian pension fund manager saw its infrastructure assets grow to CAD5.7bn (€4.2bn) in total due to the acquisition of two projects in the oil and gas sector.
In September, the Caisse increased its capital in Belgian gas infrastructure company Fluxis and invested $850m (€640m) in Colonial Pipeline, the largest pipeline network in the US, in November.
Michael Sabia, the Caisse's chief executive, said: "Since 2009, we have worked on improving our ability to face turbulent markets. We have simplified our investment strategies, reduced our leverage and developed new tools, thereby enhancing our efficiency and agility."
He added: "We still have substantial ground to cover. However, our performance over the last three years shows the changes we have implemented are bearing fruit with respect to returns, operational efficiency and risk reduction."
In comparison, however, real estate assets performed poorly against their benchmark, returning 11%, while the index recorded a 15.6% return.
The Caisse attributed this to the fact that, for certain sectors in the US and Europe, commercial real estate investment fully offset the losses suffered during the 2008 financial crisis.
Furthermore, in Europe, sales by banks and governments resulted in an increased supply of real estate assets and, consequently, a certain price stabilisation towards the end of the year, according to the Canadian manager.