Equity markets lead but private equity drags for Maple Eight pension fund
Quebec pension fund La Caisse (formerly CDPQ) posted its earnings for the first half of the year on Thursday, announcing the fund earned a 5.1 per cent return over the first six months of 2026, translating into $26 billion in gains and pushing net assets to $552 billion.
Still, the result fell short of its 7.5 per cent benchmark, according to the fund’s press release Thursday.
The gap was driven largely by the continued outperformance of public equities over private assets. A concentrated AI-fuelled stock market rally lifted benchmark indexes while dragging down relative results for La Caisse's diversified portfolio, which holds significant allocations to private equity, infrastructure, and real estate.
The fund's weighted average annualized return stood at 6.4 per cent over five years and 7.5 per cent over ten years, compared with benchmark returns of 6.8 per cent and 7.6 per cent, respectively. La Caisse’s depositors have determined they need an average return of 6 per cent to meet their long-term obligations, a threshold the fund continues to clear, said president and CEO Charles Emond in a press conference Thursday.
“It’s a global performance that exceeds our depositors’ long-term needs, which they set at around 6 per cent, depending on their different policies and risk profiles. These results contribute directly to the excellent financial health of our depositors’ pension plans, a financial health that has become even stronger in recent years,” said Emond.
Equity markets lead, private equity drags
The equity markets portfolio was the standout performer, posting a 14.6 per cent return over six months against its benchmark's 13.6 per cent. La Caisse said it was the portfolio's best combination of returns and value added for a half-year period in 20 years, driven by positioning in global technology sectors riding the AI investment cycle in data centres.
"The first half of the year was dominated by two major trends: excitement for AI and the geopolitical tensions in the Middle East. In equity markets, our teams outperformed in the context of a strong rally driven by AI," said Emond in a statement.
Meanwhile, private equity told the opposite story as the portfolio returned -4.3 per cent over six months while its benchmark - half composed of public stocks - returned 8.0 per cent. Declining valuation multiples hit companies in industries seen as vulnerable to AI disruption, including insurance and financial services. Over five years, the portfolio's annualized return was 7.9 per cent against a benchmark of 12.9 per cent.
“We’re talking about themes that are shifting quickly with returns that are concentrated, which represent a background that complicates matters for investors taking a diversified approach,” said Vincent Deslisle, senior vice president and head of liquid markets at La Caisse, in a press conference.
Infrastructure resilient, real estate stabilizing
Infrastructure continued to anchor the real assets side of the portfolio with a 7.2 per cent six-month return, powered by energy transmission, highway, and public-private partnership assets. Over five years the portfolio delivered an 11.5 per cent annualized return, beating its 10.2 per cent benchmark.
Real estate posted a 2.7 per cent return over six months against a 3.2 per cent benchmark. La Caisse said values are stabilizing and most sectors - including office and shopping centres - are showing positive performance as the portfolio shifts from an operator to an investor model. The five-year annualized return remained subdued at 0.9 per cent, weighed down by historical overexposure to US office properties.
Fixed income outperforms on credit positioning
Fixed income returned 1.7 per cent over six months, above its 1.1 per cent benchmark. A stable current yield of 2.1 per cent and strong execution in government debt - particularly through emerging markets exposure - drove the outperformance. Private credit premiums in real estate finance and infrastructure financing also contributed.
"Over the long term, our well-diversified overall portfolio continues to demonstrate an ability to navigate various market conditions, delivering less volatile returns and a well-managed risk level for our depositors," said Emond in a statement.
