Who’s Left To Blame?

Losses and management turmoil causes Canada’s largest pension fund to come under fire.

A woman walks out of the Caisse de depot et placement du Quebec head office in Quebec City

A woman walks out of the Caisse de depot et placement du Quebec head office in Quebec City February 25, 2009. Canadian pension fund Caisse de depot et placement du Quebec said on Wednesday it lost C$39.8 billion ($31.6 billion) in 2008, hit by tumbling stock prices and a depreciating Canadian dollar. REUTERS/Mathieu Belanger (CANADA)


When Caisse de Dépôt et Placement du Québec announces its 2008 returns at the end of this month, the news won’t be pretty. Caisse, one of Canada’s largest pension funds, with assets of C$155 billion at the end of 2007 (then worth $152 billion), is expected to report one of the worst performances among Canadian public pension plans. The culprit? The fund’s hefty C$12.6 billion exposure to asset-backed commercial paper. Caisse has taken C$1.9 billion in write-downs on the position, which dates back to 2007, and some analysts believe it will have to write off half of its exposure. Caisse officials would not comment.

The losses and management turmoil have left the fund reeling. President and CEO Richard Guay resigned in early January after only four months on the job, half of which was spent on medical leave; he cited personal reasons for his departure. Guay had replaced Henri-Paul Rousseau, who stepped down last May after five years on the job to join Power Corp. of Canada. Fernand Perreault, formerly head of real estate investments, will serve as interim CEO until July. Meanwhile, Quebec Premier Jean Charest said last month that he will replace nine of the fund’s 14 board members. “The whole world is saying to Caisse, ‘What’s going on?’” says Leo Kolivakis, a former senior investment analyst at the fund.