CANADA - The Caisse de dépôt et placement du Québec has revealed a decline of C$39.8bn in the value of its assets in 2008.
The drop in the fund's performance has largely been attributed to the fall in Canada's asset-backed commercial paper (ABCP).
The fund recorded an extra $4bn on ABCP in 2008, which caused a fall of 2.5% on the fund's overall performance. The cost of currency risk hedging, with the decline of the Canadian dollar, and the enduring economic turmoil have also played significant roles in causing the fund's losses.
President and chief executive of the fund Fernand Perreault commented: "As with all other investors, the first element that explains our performance this year is the global financial crisis of the fourth quarter."
He added that certain factors had a specific impact on the fund's portfolio, such as "the detention of ABCP in large quantities" and the "cost of protection against foreign exchange risk" on its assets outside Canada, which "increased sharply by the fall of the Canadian dollar."
The ABCP are long-term securities with average maturities of seven years. Without the ABCP, the five-year performance of the fund was at 4.1%.
He said: "In retrospect, we have placed too much confidence in these securities."
The episode has sped up a review of the fund's risk management, said Perreault.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.