Quebec government selects new CEO of the Caisse, replacing Michael Sabia

QUEBEC — The Quebec government has selected a relative newcomer at the Caisse de depot et placement to succeed Michael Sabia as its new head.

Charles Emond, 47, is poised to take over as president and chief executive of the province’s pension fund manager starting this Saturday.

“It’s obvious when we look at the next decade, it will be different from the last,” he said in a phone interview, referring to forecasts of economic sluggishness after 10 years of bull markets.

Emond touted the successes of his predecessor and called the Caisse’s portfolio as “solid,” but said new ground must be staked out under crowded conditions.

“There is a lot of competition for the same assets…There is a lot of capital compared to 10 years ago. Assets are expensive, rates are now very low. It is obvious that there is less room for manoeuvre.”

Seen as a rising star since he joined the Caisse last February, Emond will move up from his role as senior vice-president overseeing Quebec, private investments and strategic planning. He will retain that position on an interim basis.

Emond spent 18 years at Scotiabank, where he led a team of more than 500 employees across three continents as global head of merchant banking and capital markets. Earlier, the HEC Montreal business school graduate oversaw Canadian corporate banking at Scotia Capital.

Premier Francois Legault confirmed the appointment in a tweet Wednesday afternoon.

“Mr. Emond will be able to reconcile the Caisse’s dual mission, which is to grow the assets of depositors and contribute to the development of Quebec’s economy,” Legault said.

Sabia, 66, announced in November he would move on from the Caisse after more than 11 years at the helm to become head of the Munk School of Global Affairs and Public Policy at the University of Toronto.

He had been appointed to lead the institution after it was shaken by the financial crisis, which resulted in $40 billion of losses.

Under Sabia’s guidance, the Caisse says it has produced annual returns of 9.9 per cent over 10 years, while the size of its net assets has almost tripled to about $330 billion.

Over the last decade, the institution has diversified, focusing particularly on sectors such as infrastructure and private equity, while continuing to invest in real estate and adjusting its strategy. Investments outside of Canada now represent about two-thirds of Caisse assets compared to less than half 10 years earlier.

Michel Nadeau, executive director at the Institute for Governance of Private and Public Organizations, says Emond brings a breadth of experience to the revitalized pension fund, but must continue to exercise freedom from political concerns.

“Mr. Emond knows Quebec business well,” said Nadeau, a former executive with the Caisse. “He is someone who has a global perspective, who will not only invest in stocks and bonds, but will go into private placements, infrastructure and real estate.

“For me, the most important challenge for Mr. Emond will be to show his independence, his autonomy. The president of the Caisse is someone who…does not take government orders,” he said.

Robert Tessier, chairman of the Caisse board, commended Emond for his “sound judgment, his technical and managerial abilities and for his communications skills.”

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