The chief executive of Canada's biggest pension fund, beset by losses in a commercial paper portfolio,
has stepped down amid a reported spat with the Quebec government.
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The Caisse de dépôt et placement du Québec, which oversees C$155 billion ($130 billion) of pension funds for Quebec civil servants,
said Monday that Richard Guay is resigning for personal reasons. He will be replaced for the next six months by Fernand Perreault, who has headed the Caisse's real estate division.
The fact that the Caisse is now conducting a search for a new CEO could have an effect on Canada's buyout market, assuming the economy revives enough that buyouts are once again on anyone's radar screen. Other that Toronto's Onex Corp., Canada has no large private equity funds, and the void is filled by public pension plans, which all have alternative investment divisions.
The Caisse, for example, had teamed up with Canada Pension Plan Investment Board, Kohlberg Kravis Roberts & Co. and Onex in the spring of 2007 to bid for Montreal-based telecom giant BCE Inc. That auction was eventually won by a group led by another pension fund, Ontario Teachers' Pension Plan, though it failed to close the C$52 billion deal.
The Caisse has participated in deals in the U.S. as well as Canada, and in early 2007 teamed up with Williams Realty Advisors LLC to bid up to $2.05 billion for Atlanta real estate investment trust Post Properties Inc. That offer fizzled after Williams pulled out.
The Globe and Mail reported Tuesday that the resignation comes after the Caisse board appointed Guay over the objections of the Quebec government. His predecessor Henri-Paul Rousseau stepped down as CEO last May after the fund wrote off $1.9 billion in 2007 on its holdings of asset-backed commercial paper. The fund said last month it will have to report further write-downs for 2008.
When Rousseau stepped down, the board's first choice of a replacement was portfolio manager Jean-Guy Desjardins, but he had connections to the Action Démocratique du Québec party, a rival to the ruling Liberal party, said the Globe. Premier Jean Charest and his Cabinet preferred Christiane Bergevin, the head of SNC-Lavalin's finance division and a Caisse director. The board finally settled on Guay.
- Peter Moreira
Comments
$155 billion Canadian is $130 million US?...is the currency really in that bad shape?!