Nathalie Palladitcheff has completed the transformation process of Ivanhoé Cambridge that she began four years ago when she was appointed CEO of the real estate division of the Caisse de dépôt, and next month she will complete her integration into current activities of the institution before leaving his position to take on new challenges.
Before leaving her position for good, Nathalie Palladitcheff wanted to take a final look at the nine years she spent at Ivanhoé Cambridge, including the last four as CEO.
In her new role, she was called upon to carry out a major transformation of the real estate asset portfolio of this division which will be integrated into the Caisse’s day-to-day activities at the end of April.
“I wanted to give one last interview and meet the business community [lundi midi au Cercle canadien de Montréal] to finish things well, to explain what we have achieved in four years. I owe it to our teams, to the Caisse, to Quebecers…
“When Michael Sabia appointed me in October 2019 and Charles Emond confirmed me in my role in January 2020, they gave me the mandate to transform Ivanhoé Cambridge, that’s what we did,” explains the outgoing CEO.
As we know, the Caisse’s real estate division was overexposed to the shopping center and office building sectors, well before the outbreak of the pandemic, taken with a legacy from the late 1980s when the Caisse bought Ivanhoe Cambridge of the Steinberg family empire.
When Nathalie Palladitcheff became CEO in 2019, Ivanhoé Cambridge had generated returns below its benchmark over five- and ten-year periods. In 2023, the real estate division still showed a return lower than its index over the last five years.
“But we managed to beat the index over the last three years, we will soon surpass it over five years,” the CEO told me.
Since 2020, Ivanhoé Cambridge teams have carried out no less than 300 transactions totaling 50 billion. The weight of shopping centers in total real estate assets fell from 23% to 11%, the same goes for office buildings.
“We halved our exposure to shopping centers and office buildings and doubled our exposure to the logistics and residential sectors, two sectors in strong growth. Despite the pandemic, we decided to accelerate our transformation despite a certain drop in value,” explains the CEO.
At the end of all this activity and despite a negative return of 6.2% on the Caisse’s real estate portfolio in 2023 (better than the -10% of the benchmark index…), Ivanhoé Cambridge increased the net worth by 5 billion of its assets, which increased from 40 billion in 2019 to 45.6 billion in 2023.
After the transformation, integration
In addition to the sale of numerous shopping centers, Ivanhoé Cambridge is engaged in the transformation of some of them in Canada by recycling former commercial spaces into logistics centers or residential complexes, as it has undertaken to do in its Galeries d’Anjou project.
“We want to make them multi-use assets with transport, residential and businesses and thus reduce the carbon footprint of these sites,” underlines the CEO.
Could Nathalie Palladitcheff have continued her involvement at the Caisse de dépôt once the new real estate portfolio had been integrated into the institution’s current activities?
“I had the mandate to transform the portfolio and it’s time to hand over the baton. I will stay until the end of the process to ensure the integration of the teams within the Caisse de dépôt and support those who will have to leave. »
“We will become more efficient by grouping human resources, communications and information technology activities within a single entity,” she observes.
Already when she joined Ivanhoé Cambridge as Chief Financial Officer in 2015, the real estate group had 1,500 employees. This number has been reduced to 490 today and will be reduced further once the integration is complete.
“We left the real estate operation to concentrate on our role as an investor. In 2021, we subcontracted our 330 employees who operated shopping centers in Canada to the American group JJL. I checked recently and our 330 ex-employees are all still working,” underlines the CEO.
Even if she leaves office in a month, there is no question for Nathalie Palladitcheff of reducing the pace and taking advantage of a moment of respite. She wishes to leverage the vision she developed during the various organizational transformation experiences she has had during her professional life.
Could her transformational experience at Ivanhoé Cambridge be used to reorganize the Quebec health system by taking the helm of Santé Québec, where all the rumors seem to be leading her?
“I am focused on the mandate I am completing and I want to support our teams until the end, but I have no intention of retiring afterwards. I feel like continuing to contribute to the society that has welcomed my family and me so well,” the CEO responds very openly.