Participation in the Accès Capital Québec fund: The Caisse explains why it’s not participating in the next fund

The Caisse de dépôt et placement du Québec would like to respond to comments made in an April 2 La Presse article about its decision not to participate in a fourth investment fund with Accès Capital Québec — while further supporting the growth plans of strong, promising Québec companies, particularly through its partnership with Desjardins.

Since 1997, the Caisse has invested $8.5 million, $20 million and $18.5 million, respectively, in three Accès Capital Québec funds. The Caisse’s participation levels have also ranged from 50% to 100%, depending on the funds and partnerships. The Caisse has held many discussions with Accès Capital Québec on the Caisse’s participation level and its right to oversee investments when it is the only investor. These discussions failed to reach an agreement.

“Our decision not to participate in the fourth Accès Capital Québec fund is based on several factors,” said Luc Houle, Senior Vice-President, Investments. First, the latest Accès Capital Québec fund posted a negative return over 4 years, prompting us to seek more effective governance for the Caisse to protect the interests of the institution and its depositors.”

“The business environment has changed significantly in this area, becoming much more competitive with the Investissement Québec-sponsored, FIER fund for startup capital, Fonds de solidarité FTQ’s additional money for business succession and the Desjardins Venture Capital fund, whose vast network and pan-Québec representation supports 300 companies,” said Mr. Houle.

“Given this new business environment, we reviewed our strategy and developed a partnership with a dominant player like Desjardins, which includes a $200 million component for small Québec companies with financing needs of less than $3 million,” said Mr. Houle. “The Caisse also decided to strengthen its internal resources for the entire province, adding a new Québec investment group leader specifically to handle this mandate more carefully. Lastly, the Caisse itself is about to announce new initiatives on that front.”

“The Caisse recently reaffirmed its commitment to contributing to the expansion of Québec companies, both locally and abroad,” added Mr. Houle. “We have developed many initiatives to support them in various ways: through financing, capitalization and sharing our expertise. We also entered into partnership agreements with financial institutions such as Desjardins and HSBC, making it easier for them to obtain capital and better support their growth.”

“Moreover, the Caisse’s participation in projects is never permanent — and the Caisse needs to constantly reassess its strategy based on the best use of its capital, its mission and the changing market environment,” concluded Mr. Houle.

ABOUT THE CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
The Caisse de dépôt et placement du Québec is a financial institution that manages funds primarily for public and private pension and insurance plans. As at December 31, 2010, it held $151.7 billion in net assets. As one of Canada’s leading institutional fund managers, the Caisse invests in major financial markets, private equity and real estate. For more information: www.cdpq.com.