CDPQ | guardian of Quebec's pension investments

CDPQ is a global investment group – and Canada`s second largest pension fund – managing assets on behalf of six million Quebecers. The world’s largest infrastructure investor, the group invests in all major markets and has over C$402bn in assets.

We spoke to David Morley, managing director and head of Europe, about the firm’s growth prospects and why it has chosen London as the hub for its European operations.  

What does your company do? 

CDPQ was formed in 1965 to pool Quebec’s state and para-state pension funds. Out of 8.2 million people in Quebec, 6 million contribute to, or receive benefits from, CDPQ.  We have a dual mandate: to maximise returns with an appropriate level of risk for the people we manage money for and to help contribute to Quebec’s economic development. Today, CDPQ has over C$400bn in assets under management.

We are the largest institutional infrastructure investor in the world. Five years ago, our portfolio invested in infrastructure was C$15bn. At the end of last year, it was over C$54bn, representing over 13% of our total portfolio. We have a strong presence in the UK, with important investments in Heathrow Airport, Eurostar and London Array, one of the largest offshore wind farms in the world.  

We are also a leading private equity investor with an C$80bn global portfolio, over 50 years of experience and our European team based in London. We are also a significant investor in private credit with a growing team in London for that too.

London is the place where you can hire talent. It is the biggest pool of talent in Europe by some distance. We are a people business, so that is a big pull for us.

What factors led to CDPQ expanding their operations in the UK? What do you feel are the attractive qualities of the UK market for an international financial institution such as CDPQ? 

We opened in London about seven years ago and it has become our hub for everything we do in Europe apart from Infrastructure, where the team is based in Paris. With the UK as the most significant investment destination for us outside of North America, London has become CDPQ’s largest international office. While we plan to concentrate resources in London going forward – and recently moved into a new office space that doubles the previous size in anticipation of growth over the next ten years here - the Paris office will always remain essential to us.

London is the place where you can hire talent. It is the biggest pool of talent in Europe by some distance. We are a people business, so that is a big draw for us. London is our hub for Europe, and our international legal team is also based here.  

The proximity of vast numbers of fellow investors and business partners here in London is critical. London has this unique ability to convene groups from a vast spectrum of institutions, jurisdictions and backgrounds and get them all together in one room. It is unique in being able to do that.  

We want the London office to be able to host global, regional and asset-class events for the business. A couple of months ago, we had our private equity off-site meeting for all private equity teams worldwide in London.  

The UK also has a comprehensive ecosystem of advisers, lawyers and consultants. You need all kinds of specialist advisers for particular types of investments. And the UK has traditionally enjoyed a stable regulatory, legal, political, economic and tax environment, which helps build long-term confidence.  

There are relatively open communication channels between key regulators and government and a sense that you are welcome here as an international institution. That is not true everywhere.

There are relatively open channels of communication between key regulators and government and a sense that you are welcome here as an international institution. That is not true everywhere.

Tell us about your future growth plans.

Climate change and the transition to renewable energy is critical to everything we think about. We already hold the world’s most extensive portfolio of renewable energy generation assets. The environmental, social and governance (ESG) agenda is fundamental for CDPQ and has been for many years – something that is deeply embedded in our DNA and our investment process from start to finish.  

So much so that everyone at CDPQ has their variable compensation linked to meeting our climate targets. This is unusual among big investors – and our investment teams know there is no point looking at investments that do not meet our stringent criteria.  

Our CEO recently said we were likely to deploy C$15bn of capital in the UK and Europe over the next five to seven years – a reflection of the attractiveness of Europe and the UK from an investment point of view.