Asset AllocationNovember 11, 2021

CDPQ Invests in M3 Mortgage Group

The Canadian institutional investor has almost 10% of its portfolio invested in real estate.

Reported by Anna Gordon

Caisse de dépôt et placement du Québec (CDPQ) announced this week that it has acquired a minority stake in M3 Mortgage Group, Canada’s largest non-bank mortgage originator. The C$389.7 billion (US$309.7 billion) fund says the move exemplifies its deep commitment to real estate and will help the mortgage group expand even further.

CDPQ currently has approximately C$35.5 billion invested in real estate, making it nearly 10% of its total portfolio. Its largest percentage of real estate holdings is located in the United States, which accounts for 43.7% of CDPQ’s real estate portfolio. Canadian real estate is second, accounting for 25.9%.

The price of housing in Canada has been rapidly rising relative to disposable income, with homes increasing in value by an average of 375% across the country over the past two decades, according to an article in the National Post. Canada has relatively low interest rates, which many experts believe to be the reason behind the steep rise in prices.

M3 recently announced that it had reached annual lending volumes of more than C$67 billion and that it intends to reach a goal of C$100 billion in future loans. However, the mortgage group has not always been able to live up to its ambitious goals. Back in May 2018, M3 Chairman and CEO Luc Bernard told MortgageBrokerNews.ca that his goal was to grow the company to a volume of C$80 billion in 2021, which he was not able to accomplish. This is at least partly attributable to the pandemic. In March 2020, housing prices across Canada dipped down almost 10% in just one month, according to the Canadian real estate website WOWA.

M3 is the parent company of several other mortgage brokers, including Multi-Prêts Mortgages, Mortgage Alliance, Invis, Mortgage Intelligence, and Verico. M3 also acquired Toronto-based real estate investor Pinch Financial in June.