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“When I joined La Caisse about 18 months ago, people here couldn’t help looking in the rear view mirror at the carnage from 2008. What we can be most proud of is that, by changing the way things are managed, we have now succeeded in helping people look forward. We also have started reinstating trust between us and our clients, the Quebec media, and the population. Diversification is not what it used to be. It is no longer achieved by having as many investments as you can in many different asset classes and geographies. We are in a time when diversification is an illusion. Paradoxically, quality investments in the form of a more concentrated portfolio may be a way to address that illusion concentration, it seems, is no longer the enemy. At $150 billion dollars, if we have one investment, we are very risky. If we have 3,000 investments, we are pretty risky too—because, as a result, we are not the master of the depths of every single investment. The ability to understand fully, from top to bottom, the investments you make is the key to success because it is going to help you manage your risk better. This strategy has consequences on the way we see our investments. For example: Our focus on our active investment side is on decreasing the number of stocks we have in our equity portfolios. If we have too many stocks—because we feel we should be close to an index that we’re supposed to be beating on a regular basis—we may end up with investments that we don’t know like the back of our hand and therefore taking more absolute risk. Because we manage money for a long time, at the end of the day, the real risk we Want to avoid is the risk of definitive loss of capital. We want to make sure that when we put money somewhere that we get it back. We strongly believe in in-house research, the ability to know the management of the companies we invest in, their business owners, their financial statements, and their operations inside and out. We have a big real estate group and one of our main advantages that has led us to a fantastic return in this asset class is that we manage operations. When we decided a few years ago to go and do things a bit away from our comfort zone, we established a local partnership in order to make sure we got the proper contacts, knowledge, and abilities to understand the investments we were going to make while also bringing our own operational capabilities expertise to the table. We have been in private equity for longer and in a bigger way than quite a few of our Canadian peers. Today, we have a little more than $16 billion in private equity and another $5 billion in infrastructure. We are definitely willing to pursue it further; it has been providing us with great returns because we have been investing in the right projects and with the right partners. More than ever, the strength of your partnerships in private equity, especially in emerging markets, is critical. There is no political interference in the way we do our business. We are investing here in Quebec not because we are being asked to do so or not because we have a political agenda—we don’t—but because we know it well enough to have the competitive advantage. That said, we will go on investing abroad because, again, we feel that in today and tomorrow’s world, returns will also come from elsewhere.”