Caisse de dépôt CEO sees 'substantial' job cuts coming at real-estate units

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Quebec’s public pension manager plans to cut a significant number of jobs in the real-estate subsidiaries it’s in the process of merging.

“It’s inevitable that there will be job losses” in real estate, Caisse de dépôt et placement du Québec chief executive Charles Emond told reporters Thursday after CDPQ reported its 2023 results.

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The integration drive, which should be completed by the end of 2025, is expected to generate annual savings of about $100 million from processes, resources and systems. Nathalie Palladitcheff, the Caisse’s top real-estate executive, will leave CDPQ at the end of the transition period.

“Are we talking about dozens of job cuts? No. We’re talking about something that’s more substantial,” Emond said Thursday. “The $100-million figure won’t all come from job reductions, but it will probably be the most important factor. It’s about maximizing our performance for our depositors, at better cost.”

Emond declined to give specifics on the magnitude of the cutbacks because the restructuring process is ongoing.

Ivanhoé Cambridge has about 490 employees, compared with about 185 for Otéra Capital, a Caisse spokesperson said Thursday.

Real estate was the worst performing of the Caisse’s major asset classes in 2023, posting a negative return of 6.2 per cent, according to a statement issued Thursday. CDPQ’s overall return was 7.2 per cent.

The restructuring has nothing to do with the current economic downturn, Emond said.

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“This is not linked to the economic context at all,” he said. “This is strategic. There will be a greater potential as a result of this process.”

Folding Ivanhoé Cambridge and Otéra into a single entity will relieve some Caisse executives from their current obligation of sitting on two separate boards or management committees, Emond said. Data collection is currently less than optimal because each unit uses different systems, he added.

“It’s about freeing up hours and focusing on essential things,” the CEO said. “We are not doing this primarily for costs. Real estate is a people business. We will be less tied up in governance matters.”

CDPQ will acquire all the interests held by minority shareholders in the share capital of Ivanhoé Cambridge and Otéra Capital as part of the restructuring — thereby becoming the sole shareholder. Minority investors currently own about three per cent of each real-estate unit, Emond said.

“I want to be very clear. We are not dismantling Ivanhoe Cambridge or Otéra Capital,” he said. “These are organizations that have a good brand.”

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