Canada's second-largest pension fund grew net assets to $552 billion despite underperforming its benchmark, as private equity losses offset strong equity market gains
La Caisse de dépôt et placement du Québec posted a 5.1% overall return for the first six months of 2026, generating $26 billion in gains and pushing its net assets to $552 billion as of June 30 but the result fell short of its benchmark of 7.5%, dragged down by a sharp decline in private equity.
The mid-year figures, released by the Montreal-based institutional investor, reveal a portfolio navigating a turbulent macroeconomic environment shaped by artificial intelligence enthusiasm and ongoing geopolitical instability.
Over five years, CDPQ delivered an annualised return of 6.4% (benchmark: 6.8%), and 7.5% over ten years (benchmark: 7.6%).
"The first half of the year was dominated by two major trends: excitement for AI and the geopolitical tensions in the Middle East," said Charles Emond, President and Chief Executive Officer of CDPQ.
Equity strength couldn't mask private equity pain
Public equity markets were the standout performer, returning 14.6% over the period against a benchmark of 13.6% — one of the few asset classes where CDPQ outpaced its index. Fixed income also beat its benchmark, delivering 1.7% against 1.1%, as rate dynamics provided a modest tailwind.
The drag came from private equity, which posted a -4.3% return against a benchmark of 8.0% — a significant gap that weighed heavily on the overall result. Infrastructure returned 7.2% but trailed its 12.7% benchmark, while real estate delivered 2.7% against a benchmark of 3.2%.
For Canadian financial advisors and wealth management professionals who monitor large institutional portfolios for signals about broader asset allocation trends, the divergence between public and private markets in the first half of 2026 is notable.
Private equity valuations have come under pressure globally as higher-for-longer interest rate environments in prior years have repriced assets and slowed exit activity.
Quebec investments anchor domestic strategy
Despite the mixed performance picture, CDPQ continued deploying capital into significant domestic transactions. The fund participated in a joint acquisition of Boralex, a renewable energy producer, at an enterprise value of approximately $9 billion, doubling its stake to 30%. It also provided $240 million in financing to Cologix for a new Montreal data centre, participated in a $302 million Series E funding round for nesto, a Canadian digital mortgage platform, and acquired full 100% ownership of the A25 Concession for $280 million.
In infrastructure finance, CDPQ supported a $1.85 billion green bond issuance for the Réseau express métropolitain (REM), Quebec's light rail network — a signal of the fund's continued commitment to sustainable infrastructure financing.
Credit ratings remain bulletproof
CDPQ's credit quality was reaffirmed by all four major rating agencies, each maintaining the fund at the highest possible rating: AAA from DBRS Morningstar, S&P Global, and Fitch, and Aaa from Moody's; all with stable outlooks.
For a fund managing assets on behalf of 48 depositors including major Quebec public pension and insurance plans, the ratings underpin confidence in long-term solvency.
The fund's size and mandate give it influence that extends well beyond Quebec. At $552 billion in net assets, CDPQ is among the largest institutional investors in the world, and its portfolio decisions send ripples through global credit, equity, and infrastructure markets alike.
