The integration of the two real estate subsidiaries triggered a major reshuffling of the cards at the Caisse de dépôt, which will result in significant job losses throughout the organization.
A substantial number of jobs, which could reach a hundred, would be eliminated in this vast ongoing restructuring. “Everyone will know their employment status on April 29,” said Caisse spokesperson Kate Monfette.
The integration of the real estate subsidiaries Ivanhoé Cambridge and Otéra Capital announced at the end of January aims to reduce costs by 100 million. But these savings will not come only from these two subsidiaries, specifies the Fund.
The restructuring will also affect the organization’s entire service offering, such as information technology, human resources and communications, the spokesperson said.
The number of jobs that will disappear is not known, but it could be significant, according to the CEO of the Caisse, Charles Émond. “Will it be dozens? No. We are talking about something more substantial in terms of jobs,” he said during the publication of the 2023 financial results last week.
PHOTO MARCO CAMPANOZZI, LA PRESSE ARCHIVES
Charles Émond, CEO of the Caisse de dépôt et placement du Québec
Ivanhoé Cambridge and Otéra Capital have 680 employees. The synergies sought will not all come from a reduction in jobs, indicated the Fund, but also from improving the functioning of the entire organization, where there is a lot of duplication.
Charles Émond gave the example of the proliferation of boards of directors, management committees and investment committees which take up too much time, in addition to different computer systems which hinder the sharing of information.
According to him, the objective of the restructuring is to move from a “reasonable” operating cost to an “optimal” operating cost.
The two real estate subsidiaries have an annual operating cost of 300 million, compared to 800 million for the Caisse’s other activities, he said.
The Caisse de dépôt’s operating costs increased from 48 cents per $100 of assets in 2022 to 59 cents per $100 of assets last year. According to its managers, this jump is explained by the performance bonuses paid to its internal and external managers. Without these bonuses, operating expenses were 22 cents per 100, a level similar to last year.
Integration of subsidiaries
Otéra Capital has already been integrated into the Caisse’s existing fixed income portfolio and Ivanhoé Cambridge will become a separate portfolio, like those of private placements and infrastructure.
The integration of the two subsidiaries into the Caisse de dépôt’s other activities will take 18 to 24 months. It’s a long process, explained the president and CEO of Ivanhoé Cambridge, Nathalie Palladitcheff, because it’s not about cuts, but about optimization. Mme Palladitcheff will leave his post at the end of April.
The Caisse posted a return of 7.2% for 2023, a performance which was driven downward in part by its real estate investments. Its real estate sector returned -6.2% in a difficult market where the benchmark index did worse, at -10%.