Caisse Turns to Private Markets to Control Volatility

More emphasis to go on private placements.

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quebec flagPension fund manger Caisse de dépôt et placement du Québec says it will be more selective in its stock market picks and put more emphasis on private placements in infrastructure and real estate.

Caisse head Michael Sabia says the changes will be made gradually and the pension fund manager will do more in-depth study on its investments to keep volatility in check.

Sabia told a luncheon speech in Montreal that the Caisse, for example, could hire geologists and telecommunications specialists as part of its research to pick the right investments.

He says the Caisse has had better returns in recent years from private companies, real estate and infrastructure.

The Canada Pension Plan Investment Board is using a similar strategy of investing in private companies and other opportunities less tied to macro economic factors.

The CPPIB hit a record high value of $161.6 billion last year, making it the biggest pension fund in Canada, based on latest reported results.

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