Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
cdpq.com
Global Investor Presentation
Bloomberg ticker: CADEPO
This document cannot be transmitted or communicated without the prior consent of
CDPQ.
June 2020
Global Investor Presentation1
> This presentation and the accompanying oral presentation contain forward-looking statements within the meaning of applicable securities
legislation. Forward-looking statements are typically identified by words such as “projected,” “estimate,” “may,” “anticipate,” “believe,”
“expect,” “plan,” “intend,” “could” or similar words suggesting future outcomes or statements regarding an outlook (and the negative form
thereof). All statements other than statements of historical fact contained in these slides are forward-looking statements.
> Forward-looking statements involve numerous assumptions, risks and uncertainties. A variety of factors, many of which are beyond the
control of Caisse de dépôt et placement du Québec (“CDPQ”), may cause actual results to differ materially from the expectations
expressed in its forward-looking statements. These factors include, but are not limited to, risks related to financial markets and economic
conditions in Canada, the United States and internationally, changes in standards, laws and regulations, risks related to defaults by
financial institutions, risks related to financial instruments, fluctuations in interest rate levels, increased competition for assets, fluctuations
in investment returns, foreign exchange rate fluctuations, adverse changes in the credit markets, the risk of damage to CDPQ’s reputation,
CDPQ’s ability to access the capital markets for debt financing, changes in the real estate and infrastructure markets in Canada, the
United States and elsewhere, and risks more generally associated with the markets and CDPQ’s portfolios of investments.
> CDPQ does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on
its behalf.
> No information presented in this presentation and the accompanying oral presentation as of a date more recent than December 31, 2019
has been audited and only the consolidated financial statements of CDPQ as at December 31, 2019 and for the year then ended have
been audited.
> The information on, or accessible through, our website or any of the other websites or links to websites referred to in this presentation is
not part of or incorporated by reference into this presentation.
> Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to buy any
security of CDPQ, CDP Financial Inc. (“CDP Financial”) or any of their respective affiliates in the United States or in any other jurisdiction
where such offer or solicitation would be unlawful, and such information does not constitute an offer to sell or a solicitation of an offer to
buy or an advertisement in respect of securities in any province or territory of Canada. Any offer to sell or solicitation of an offer to buy
securities of CDPQ, CDP Financial or their respective affiliates in the United States may not be made absent registration under the
Securities Act of 1933, as amended (the "Securities Act"), or an exemption from registration under the Securities Act. Any offer of
securities of CDPQ, CDP Financial or their respective affiliates will be made pursuant to a private offering memorandum.
Cautionary statements
Global Investor Presentation2
CDPQ at a glance
Notes
All amounts in this presentation are as at June 30, 2020 unless otherwise indicated.
In this presentation, we use the USD/CAD exchange rate as at June 30, 2020: 1.3620
USD 244.5 BCAD 333 B
NET ASSETS
AS AT JUNE 30, 2020
40+PUBLIC AND PARAPUBLIC
DEPOSITORS, MAINLY
RETIREMENT FUNDS
AND INSURANCE PLANS
One of the largestPUBLIC PENSION ASSET
MANAGERS IN CANADA3
1965CREATION OF CAISSE DE DÉPÔT
ET PLACEMENT DU QUÉBEC
AAASINCE ITS FIRST ISSUANCE IN
2003 (DBRS, FITCH1, MOODY’S
AND S&P)2
66%EXPOSURE OUTSIDE CANADA4
1,285 EMPLOYEES4
12 OFFICES WORLDWIDE
1. Fitch began providing a rating as of February 2019.
2. Ratings are not a recommendation to buy, sell or hold securities and may be subjectto revision or withdrawal at any time.
3. Based on net assets under management.
4. As at December 31, 2019.
Global Investor Presentation3
Our mission
CDPQ was created in 1965 by an Act
of the National Assembly of Québec to
manage assets for the newly created
Québec Pension Plan (mandatory for
all Canadians working in Québec)
CDPQ is not responsible
for its depositors’ liabilities
(e.g. pension liabilities)
CDPQ is operationally and
financially independent from the
Government of Québec
Québec Pension Plan
24%
Other public retirement funds
(ex.: municipalities)
10%
Insurance plans
10%Other
3%
Provincial government employees 2
53%
Global Investor Presentation4
> More than 98%1 of CDPQ’s net assets
come from exclusive legislated mandates
• These depositors are governed by their own
laws and regulations requiring them to invest
their funds with CDPQ
> Stable legal and legislative framework
> 41 depositors1:
• Pension plans for provincial government
employees account for more than 50% of net
assets2 (over 550,000 contributors, 325,000
beneficiaries)
• Québec Pension Plan is a compulsory public
insurance plan to provide workers with basic
financial protection in the event of retirement,
death or disability (over 4 million contributors,
2 million beneficiaries)
Our depositors: an exceptionally stable asset base
1. As at December 31, 2019. Please refer to the appendix for links to relevant legal documents, including the laws pertaining to CDPQ and some of its depositors.
2. Includes the following plans: Retirement Plans Sinking Fund, Government and Public Employees Retirement Plan, Pension Plan of Management Personnel.
CAD 333 B
2
Global Investor Presentation5
> Independence from Government, established
by legislation1,2
• The Government of Québec does not intervene in any
aspect of CDPQ’s investment decisions, operations or
finances, nor does it guarantee CDPQ’s debt
> Independent Board of Directors2
• At least 2/3 of members, including the Chair, must be
independent
• Strong fiduciary duty, including appointing the CEO,
establishing risk management policies, approving
CDPQ’s strategic plan and approving investment
policies
> Stable legislation and legal framework2
Governance
…governance came upagain and again asperhaps the single mostimportant factor in thesuccess of the Canadianmodel of pension funds.
World Bank Group3
“
”
1. “It acts with full independence in its administrative management and in the management of its investments…” Act respecting the Caisse de dépôt et placement du Québec (chapter C-2).
2. Please refer to appendix for link to legal documentation, including the law and regulations pertaining to CDPQ and some of its depositors.
3. ”The Evolution of the Canadian Pension Model, Practical Lessons for Building World-class Pension Organizations.” World Bank Group. November 2017.
Global Investor Presentation6
Providing value to our depositors to meet their long-term needs
Depositors and CDPQ’s portfolio
Advisory services to assist
our depositors
41separate
depositors
set their individuallong-term allocation targets
which translates into allocations among
10actively
managed specialized portfolios
total portfolio allocation and overlay strategies
CDPQ’s strategic
orientations
CDPQ’s
value added
Depositors’
orientations$$
Investment Portfolio
Global Investor Presentation8
Key orientations
Build on in-house expertise to
create our own opportunities
Focus on quality assets rooted
in the real economy
Continue the portfolio’s
globalization through partnerships
Invest for the long term with a focus on quality, resilient assets
Acquisition of private assets incl.
infrastructure, private credit and private equity
Strategic partnerships and a disciplined
approach in key emerging markets
Focus on absolute-return management and
on the fundamental value of companies
Act as a long-term and active partner to
companies
Continue building on our comparative
advantage in our local marketTake action with a climate change
strategy Integrate carbon-reduction targets into all
investment decisions
Global Investor Presentation9
Stewardship investing
An active leadership to generate sustainable growth
Governance
ESG analysis, dialogue with companies and exercise of voting rights
Climate change strategy
One of the first institutional investors to set carbon footprint targets across
all asset classes (2017)
• 25% reduction in the overall portfolio’s carbon intensity1 between 2017 and
2025
• USD 23 B in low-carbon assets by 2020 (enhanced target)
• Targeting a carbon-neutral portfolio for 2050
Diversity and inclusion
Initiatives to increase diversity and inclusion to execute our priorities
1 Total portfolio’s CO2 emissions (tCO2) divided by total assets ($).
Net-Zero Asset Owner Alliance
-
20
40
60
80
100
120
2015 2016 2017 2018 2019 Jun-20
Cumulative net returns Cumulative depositor's contributions
9.1% 7.6% 9.3% 4.2%
Global Investor Presentation10
Solid results, consistent asset growth
6.3%Five-year annualized
return1
Cumulative net asset growth
8.7%10-year annualized
return1
CAD 84.7 BFive-year net investment
results
84.72
Net
returns1: -2.3%
1. Weighted average return on depositors’ funds.
2. From June 2015 to June 2020.
As at June 30, 2020
CAD
billions
7.22
COVID-19
The COVID-19 crisis continues to impact the global markets and CDPQ. CDPQ
continues to monitor and assess the impact of this crisis. It has built a diversified
portfolio and maintains a sizeable reserve of high-quality liquid assets. CDPQ follows
very closely any developments and anticipates it will maintain its ability to fulfil its
mandate and any obligation towards all of its creditors.
10.4%
Global Investor Presentation11
Close to 90% of all our investments managed in-house5
World-class investment platforms with strategic partnerships across the globe
Investment offering
1. Preqin, 2017.
2. Includes the following Specialized portfolios: Short term investments, Long-term bonds and Real return bonds.
3. IPE Real Assets Magazine, 2018, as at December 31, 2018.
4. Preqin, 2018.
5. As at December 31, 2019.
EQUITIES
USD 118 billion (48%)
Public Equity ( 33%)
> Focus on absolute return:
active quality-based approach
Private Equity ( 15%)
> Cutting-edge expertise: around
75% of direct investments
> 45 years experience
> TOP 10 investor in the world1
FIXED INCOME
USD 75 billion (31%)
Credit ( 21%)
> Corporate and sovereign credit in
developed and growth markets
> Commercial real estate debt
> Private debt, project finance and
specialty finance
Rates and other2 ( 10%)
> High-quality liquid government
securities
REAL ASSETS
USD 48 billion (20%)
Real Estate ( 11%)
> Ivanhoe Cambridge: TOP 10 investor
in the world3
> Holds interests in more than 1,000
buildings in key cities
> Develops, invests and operates
Infrastructure ( 9%)
> TOP 10 investor in the world4
> Over 20 years of investments
0 $
25 $
50 $
75 $
100 $
Fixed Income Public equity Private equity Real estate Infrastructure
Dec-14 Jun-20
Global Investor Presentation12
As at June 30, 2020
> Increased asset diversification, a result of our long-term investment approach
• High quality assets creating long-term value, irrespective of market volatility
> Substantial liquidity, minimizing liquidity risk and providing flexibility
• Including more than USD 36 billion of cash and high-quality and liquid government securities
Breakdown by asset class
Fixed Income(31%)
Public Equity(33%)
Private Equity (15%)
Real Estate (11%)
Infrastructure
(9%) Other (2%)
244.5 G$ US
USD B
June 2020 vs. Dec. 2014*
Total net asset growth: + 47%
Note
Totals may vary due to rounding.
Amounts as at Dec. 31, 2014 and as at June 30, 2020 are both converted to USD using the exchange rate as at June 30, 2020 (1.3620).
+ 22%+ 30%
+ 129%
+ 57%+ 185%
Global Investor Presentation13
> Substantial increase in international exposure since 2014
• From 47% to 66% of overall portfolio
> Globalization is a key part of CDPQ’s strategic investment orientations
• Building a diversified and resilient portfolio with rigorous selection of international investments
Geographic exposure as at December 31, 2019
Note
Totals may vary due to rounding.
CDPQ’s priority growth markets include, but are not limited to, India, Brazil, Mexico, Colombia and China.
*
64%
53%
34%
17%
22%
33%
11%
14%
14%
4%
7%
14%
3%
5%
5%
2009
2014
2019
Senior Debt Issuance Program
Global Investor Presentation15
Why issue debt?
> Optimizing portfolio construction (better risk taking)
> More flexibility in deploying our long-term strategy across asset classes
> Increased efficiency in liquidity management
Our approach
> Multicurrency senior debt program (144A / Reg S) launched in 2019
> Debt issued by CDP Financial, a direct wholly owned subsidiary of CDPQ
> Fully and unconditionally guaranteed by CDPQ's net assets
> Regular benchmark issuance in the SSA* market, mostly in USD, EUR and CAD
• Increase and diversify investor base globally
• Reduce cost of funds and increase flexibility of access to funds
Senior debt issuance program
Supranational, Sub-sovereign and Agency
Providing value to investors as a high-quality AAA issuer
Global Investor Presentation16
AAA ratings1 since our first issuance in 20032
1. Ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
2. Fitch began providing a rating as of February 2019.
2003
2005
2007
2009
2013
2014
2019
Launch CAD 3 billion
CP program
and
CAD 1.5 billion term
debt program
Increase of CP program
from CAD 5 billion to
CAD 7 billion
and
multicurrency flexibility
(£, €, JPY and CHF)
Increase of CP program
(from CAD 3 billion to
CAD 5 billion)
Launch USD 8 billion
term debt program
(USD, CAD, EUR)
New USD 5 billion
CP program and
Reduced existing CP program
from CAD 7 billion to
CAD 3 billion
New USD 20 billion program
(144A / Reg S)
Four benchmark-size
issuances so far
CADEPO 2.75% 03/2022
USD 2 billion, 3-year
CADEPO 2.125% 06/2021
USD 2 billion, 2-year
CADEPO 1.00% 04/2023
USD 2 billion, 3-year
CADEPO 0.875% 06/2025
USD 2.5 billion, 5-year
Highest rating supported by
> Low leverage, substantial liquidity and
high-quality diversified assets
> Creditors’ priority of claim over depositors’
participation deposits
> Strong governance, stable legal and
legislative framework
AAA/F1+
AAA/R-1 (high)
Aaa/P-1
AAA/A-1 (high)
Increase of US CP program
(from USD 5 billion to
USD 10 billion)
Global Investor Presentation17
Fair value as at June 30, 2020
Outstanding senior debt
1. Senior debt / (net assets + senior debt), at fair value.
Term notes: USD 13.5 B
Total senior debt: USD 17.6 B
CAD 0.8 B outstanding
CAD 3 B program
USD 3.5 B outstanding
USD 10 B program
CAD 1.0 B*
Consistently low debt ratio1
* Face value in local currency
USD 2.0 B*
USD 2.0 B*
USD 1.25 B*
10% BOARD-SET LIMIT ON SENIOR DEBT RATIO1
Short-term notes: USD 4.1 B
USD 2.0 B*
USD 2.0 B*
USD 2.5 B*
Global Investor Presentation18
As at June 30, 2020
> Available assets to cover debt after a stress
event1: An illustration
A sizeable safety cushion for creditors
14x Asset coverage of
unsecured debt after a
hypothetical market stress1
Gross
assets
Severe
market
stress1
Secured
liabilities2
Available
stressed
assets
Senior
unsecured
debt3
USD 36 BUnencumbered
high-quality and liquid
government securities4
US$ B
10% BOARD LIMIT ON
SENIOR DEBT RATIO5
6.7%Senior debt ratio5
1. Illustrative market stress scenario reflecting the portfolio’s loss over 1 year that could be exceeded in 5% of cases. Based on a historical value at risk using observations from 2006 to today.
2. Including securities sold under repurchase agreements (USD 14.5 billion), securities sold short (USD 2.4 billion) and liabilities related to derivatives (USD 1.3 billion).
3. Face value.
4. Including cash, short-term notes and bonds issued or guaranteed by the Government of Canada or by Canadian provincial governments.
5. Senior debt / (net assets + senior debt), at fair value.
284
Global Investor Presentation19
Recent issuances
Banks35%
Central Banks / Official
Institutions47%
Asset Managers16%
Other2%
Banks39%
Central Banks / Official
Institutions43%
Asset Managers
16%
Other2%
Asia17%
US & Canada
56%
EMEA18%
Latin America
9%
March 2019USD 2 billion, 3-year
(UST +29 bps, M/S +23 bps)
By Geography
June 2019USD 2 billion, 2-year
(UST +23 bps, M/S +19 bps)
Asia9%
US & Canada
51%
EMEA25%
Latin America
15%
By Investor Type
April 2020USD 2 billion, 3-year
(UST +67 bps, M/S +52 bps)
Asset Managers
7% Other2%
Banks21%
Central Banks / Official
Institutions70%
Asia11%
US & Canada
44%
EMEA45%
June 2020USD 2.5 billion, 5-year
(UST +54 bps, M/S +50 bps)
Asset Managers
12%
Other4%
Banks28%
Central Banks / Official
Institutions56%
Asia27%
US & Canada
37%
EMEA34%
Latin America2%
Appendix
Global Investor Presentation21
Main depositors as at December 31, 20191
Government and Public
Employees Retirement Plan
USD 59.2 billion
• 552,000 contributors
• 282,000 retirees and 19,000 surviving
spouses and orphans
• CAD 6.0 billion in retirement benefits
paid annually
• 4.2 million contributors
• 2.1 million beneficiaries
• CAD 14.5 billion in benefits paid annually
Québec Pension Plan
USD 63.0 billion
Supplemental Pension Plan for
Employees of the Québec
Construction Industry
USD 19.9 billion
• 164,000 contributors
• 98,000 retirees or surviving spouses
• CAD 890 million in benefits paid annually
Québec’s occupational
health and safety plan
USD 14.0 billion
• 224,000 contributing employers
• 3.9 million workers covered
• CAD 2.2 billion in benefits paid annually
Québec’s public automobile
insurance plan
USD 10.0 billion
• 5.5 million driver’s licences holders
• 6.6 million registered vehicles
• CAD 1.1 billion paid in compensation
annually
Pension Plan of Management
Personnel
USD 7.0 billion
• 28,000 contributors
• 32,000 retirees and 2,700 surviving
spouses and orphans
• CAD 1.5 billion in benefits paid annually
Generations Fund
USD 7.1 billion
• Fund used to repay Québec’s debt
• Fund used by the Government of
Québec to capitalize the employer’s
portion of retirement benefits of
employees in the public and parapublic
sectors
Retirement Plans
Sinking Fund
USD 71.7 billion
1. USD/CAD exchange rate as at December 31, 2019: 1.2968.
Global Investor Presentation22
Investor relations
CDPQ
https://www.cdpq.com/en/investor-relations
Laws and regulations
CDPQ
https://www.cdpq.com/fr/a-propos/gouvernance/loi
Laws pertaining to our depositors: a sample
Québec Pension Plan
http://legisquebec.gouv.qc.ca/en/showDoc/cs/R-9
Government and Public Employees Retirement Plan
http://legisquebec.gouv.qc.ca/en/showdoc/cs/R-10
Supplemental Pension Plan for Employees of the Québec
Construction Industry
http://legisquebec.gouv.qc.ca/en/ShowDoc/cs/R-20
Our depositorshttps://www.cdpq.com/en/about-us/clients
Key links
Investments and Performance
Overall portfolio
https://www.cdpq.com/en/investments/overall-portfolio
Annual reports
https://www.cdpq.com/fr/performance/rapports-annuels
Risk management
https://www.cdpq.com/en/investments/risk-management
Stewardship investing
https://www.cdpq.com/en/investments/stewardship-investing
Governance
Policies
https://www.cdpq.com/en/about-us/governance/law
Board of Directors
https://www.cdpq.com/en/about-us/governance/board-directors
Executive Committee
https://www.cdpq.com/en/about-us/governance/executive-committee
Caisse de dépôt et placement du Québechttps://www.cdpq.com/en
Note
The information on, or accessible through, our website or any of the other websites or links to websites referred to in this presentation is not part of
or incorporated by reference into this presentation.