PensionsJanuary 26, 2024

CDPQ Aims to Save C$100M per Year by Bringing Real Estate Units Into Main Business

The Canadian pension giant is integrating Ivanhoé Cambridge and Otéra Capital, also announcing the April departure of Ivanhoé Cambridge CEO Nathalie Palladitcheff.

Reported by Michael Katz

Caisse de dépôt et placement du Québec is consolidating its real estate subsidiaries Ivanhoé Cambridge Inc. and Otéra Capital into CDPQ in a move it expects will save C$100 million ($74.48 million) per year.

As part of the integration, CDPQ will purchase all shares held by minority shareholders in Ivanhoé Cambridge and Otéra Capital, making it the lone shareholder. According to the pension fund, when the transaction closes at the end of April, the governance of the real estate subsidiaries will be integrated into that of the CDPQ. Ivanhoé Cambridge and Otéra Capital will become investment groups within CDPQ and retain their respective brands in the markets, according to CDPQ.

The announcement also revealed that Ivanhoé Cambridge CEO and President Nathalie Palladitcheff has decided to leave at the end of this transition period.

“Nathalie has accomplished a lot for CDPQ and our depositors by leading the transformation of Ivanhoé Cambridge’s business model and repositioning the portfolio towards promising sectors with her teams,” said Charles Emond, CDPQ’s president and CEO, in a release. “Since her arrival, Nathalie has stood out for her vision and great leadership which have allowed her to take Ivanhoé Cambridge further. The context in which she had to carry out her mandate was marked by the double challenge of the atypical environment of the pandemic and the profound transformation of the real estate sector.”

The two firms’ corporate services teams, which support the day-to-day activities of investment groups, will report to those of the CDPQ, beginning next week. The corporate services teams include finance, operations, digital, human resources, legal, communications and risk management.

“My transformation mandate will conclude at the end of this transition period, in which I will be fully committed,” Palladitcheff said in a release. “I would like to thank Charles for his trust and support throughout this evolution, all of my teams for their deep commitment and my colleagues at the CDPQ for their support. I am very proud of the colossal work accomplished with my teams and our real estate portfolio is in a good position for the future.”

Staring April 9, the subsidiaries’ investment teams will become CDPQ investment groups and will continue working under their respective brands. According to the announcement, the investment partners and clients of the two subsidiaries will continue their business relations as usual.

The integration, slated to begin January 29, is expected to take 18 to 24 months, after which the pension fund expects to see annual savings of approximately C$100 million per year from consolidating its processes, resources and systems.

“Ivanhoé Cambridge has gradually moved, in recent years, from a dual role of property exploitation and investment to an organization focused on its primary investment business,” Palladitcheff said. “Combining our capabilities with those of the CDPQ group is the logical continuation of this movement, which will allow us to focus on what we do best—investing in real estate around the world.”