La Caisse delivers 5.1% first-half return as private equity weighs on performance
La Caisse de dépôt et placement du Québec generated a 5.1% return in the first half of 2026, trailing its benchmark as a sharp decline in private equity investments offset strong gains from listed equities, according to a report by Bloomberg.
The Quebec-based investment fund, La Caisse de dépôt et placement du Québec, posted a 5.1% return during the first half of 2026, according to Bloomberg. This modest gain trailed its benchmark index, which delivered a 7.5% return over the same period. La Caisse manages investments on behalf of the Quebec government and other clients, with its net assets standing at CAD552 billion ($396 billion) as of June.
The fund's sharp decline in private equity investments was the primary factor behind the underperformance. The private equity portfolio, valued at CAD85 billion at the beginning of the year, dropped by 4.3% amid concerns over potential disruption from artificial intelligence (AI). This decline affected significant holdings such as WSP Global and Alstom, which saw their shares fall by 29% and 40%, respectively, during the six-month period.
La Caisse's head of liquid markets, Vincent Delisle, noted that investors viewed WSP as an example of a business vulnerable to AI-driven disruption. However, Delisle argued that technology could ultimately enhance productivity and allow companies like WSP to expand their client bases. La Caisse's digital wealth management platform, FNZ Group, also faced pressure due to concerns about AI's impact on the financial services industry.
Despite the private equity underperformance, La Caisse's public equity portfolio delivered a strong 14.6% return in the first half, marking its best combination of returns and value creation in two decades. This performance was largely driven by exposure to global technology stocks, although the fund highlighted the unusually high concentration of market gains among a small number of AI-related companies.
Other private assets provided a positive contribution, with real assets returning 5.5%. Infrastructure and real estate investments were particularly strong, while office properties and shopping centers showed signs of recovery after the COVID-19 pandemic disruption. Fixed income assets generated a 1.7% return, albeit constrained by higher long-term US interest rates.
La Caisse's chief executive, Charles Emond, cautioned that the outlook for the remainder of 2026 remains uncertain, citing several factors such as the conflict involving Iran, its potential impact on inflation and interest rates, and questions over the sustainability of the current AI investment cycle. Emond noted that investor expectations for AI demand and the profitability of existing capital deployed in the sector were exceedingly high, potentially leading to greater volatility if these expectations are not met.
Despite these concerns, La Caisse continues to invest in alternative assets and infrastructure. The pension manager recently acquired a 25% stake in Air Canada's Aeroplan loyalty program for CAD2.5 billion alongside other Canadian pension funds and Blackstone.
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