Mr. Chair, members of the committee, my name is Vincent Delisle, and I’m Executive Vice-President and Head of Liquid Markets at Caisse de dépôt et placement du Québec. Joining me is Philippe Batani, Vice-President, Public Affairs and Communications at CDPQ.
We’re here to represent Caisse de dépôt et placement du Québec, which was created in 1965 by an act of Quebec's National Assembly. We have net assets of $402 billion and manage the funds of 48 depositors—primarily public and parapublic pension and insurance funds in Quebec.
Tonight, to further the objectives of the committee, we’ll provide an overview of CDPQ’s international activities, including our activities in the People’s Republic of China. We’ll also talk about the measures we’ve adopted to conduct the most rigorous environmental, social and governance, or ESG, assessments possible.
So if we take a closer look at our total portfolio’s international activities, the breakdown is as follows: Canada, 25%; United States, 40%; Europe, 16%; Asia Pacific, including Australia, 12%; and Latin America and other regions, 7%.
At the end of February 2023, our exposure to the PRC represented 2% of our total portfolio.
We invest more in liquid markets than private markets, which is a trend we expect to continue. Indeed, liquid markets—as the name suggests—give us more flexibility and agility to adjust our holdings based on the market environment and risks that may emerge over time.
Taking a more granular look at our exposure to the PRC, we have around 60% of our portfolio in liquid markets and 40% in less-liquid markets, particularly in real estate. Ultimately, we focus on Chinese companies that mainly serve their domestic market.
With total GDP of close to 20%, we see China as a market that contributes to our diversification and our depositors’ long-term performance. Its economy also generated a quarter of global growth over the last 10 years.
As a global investment group, we take the same financial, geopolitical and legal risks into consideration in all the markets we invest in, as well as to ESG-related risks.
We believe that sustainable investing is necessary in terms of our responsibility toward communities and that it is also an important factor for the long-term viability of the companies in which we invest. These companies generate returns for our depositors, which represent over six million Quebeckers.
We know that the environment investors must navigate is complex and involves significant geopolitical tensions, so we take a cautious and measured approach.
Wherever we invest around the world, including in the PRC, we comply with all Canadian sanctions under all circumstances.
In terms of risks related to ESG criteria, including social factors, we follow a rigorous approach based on a sustainable investment policy that defines the framework under which we integrate them into our assets management process. The policy also sets out the primary tools available to our teams for them to achieve our objectives.
When making investment decisions, our teams use a variety of tools that emphasize applying ESG criteria, including background checks and a review of partners involved in the companies, thorough analyses based on the targeted ownership stakes, and a review of the ESG processes of all our external managers.
To conclude, we hope that this overview has been helpful in understanding CDPQ’s approach to international markets and the vigilance we apply to ESG risks.
We'd be happy to answer any questions committee members might have.
Thank you.