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SHOCKING NEWS: Canada’s Pension Funds Take a Hit as Private Equity Fizzles Out!
MASSIVE DISAPPOINTMENT! Canada’s big pension funds, including the mighty Canada Pension Plan Investment Board (CPPIB), Ontario Teachers’ Pension Plan (OTPP), and Caisse de dépôt et placement du Québec, have ALL failed to meet expectations! Investors are reeling as they face a year of dismal returns from their private equity investments – and they’re NOT happy about it!
DOWNTURN DRAMA! As global borrowing costs skyrocketed in 2022 and 2023, private equity took a nosedive, leaving some of the world’s largest investors in private assets scrambling for answers. While the stock markets boomed, private equity was left in the dust, dragging these pension icons down with it!
UNDERPERFORMANCE ALERT! Reports reveal that these titans of finance have lagged behind their benchmarks, marking a stark contrast to their previous success! CPPIB, that manages a staggering C$714 billion for a whopping 22 million Canadians, revealed that private equity, making up 23% of its core portfolio, was the biggest problem child over the last FIVE years!
THROWING SHADE! Despite this financial fiasco, fund managers insist their long-term strategies are still on track, claiming they expect less growth during market booms and only limited losses during downturns. But can they really afford to shrug this one off?
GRIM REALITY! The Ontario Teachers’ Pension Plan’s private equity portfolio delivered barely HALF the returns compared to large-cap stocks, dominated by soaring US tech giants! How embarrassing! And let’s not forget, this gap had been even larger the previous year!
DEFENDING THE FORT! In a rather defensive tone, OTPP declared that private equity is still a “highly profitable asset class” for them. Meanwhile, Caisse de dépôt’s CEO, Charles Emond, laments a "pause" in valuations and deal flow, but emphasizes their commitment to keep pushing forward!
STAY TUNED! Can these pension giants bounce back? Or are they facing a prolonged period of mediocrity? As private equity remains volatile, all eyes will be on their next moves—will they triumph or will they continue to tumble down the rankings? The stakes couldn’t be higher!
photo credit: www.ft.com
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