2000 Operations Report
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Operations Report 2000 Investing in people, around the world Caisse de dépôt et placement du Québec (Québec CDP) uses the following brand names: CDP group refers to all of its business units and its subsidiaries. CDP Global Asset Management offers portfolio management services. CDP Advisory Services provides group savings management advisory services. CDP Private Equity regroups all the private equity units and subsidiaries: • CDP Accès Capital • CDP Montréal Mode Investissements and Montréal Mode International • CDP Capital Communications • CDP Capital d’Amérique • CDP Sofinov • CDP Financial Services • CDP Capital international • Groupe Expordev • CDP Asia Investments • CDP Europe CDP Real Estate regroups all the real estate subsidiaries: • Ivanhoe Cambridge • SITQ IMMOBILIER • Cadim • CDP Mortages CDP Capital refers to all the fund management units. All figures, unless otherwise specified, are in Canadian dollars. Operations Report 2000 A world leader in fund management .......................................................................................................... 5 Year 2000 highlights ...................................................................................................................................... 6 Year 2000 economic context ........................................................................................................................ 8 Financial markets in 2000 ............................................................................................................................. 9 Risk management and calculation of returns ............................................................................................ 13 Overall return and asset growth .................................................................................................................. 15 CDP Global Assets Management ................................................................................................................. 21 CDP Private Equity ......................................................................................................................................... 23 CDP Real Estate .............................................................................................................................................. 32 Management for new clients ........................................................................................................................ 38 Depositors’ accounts management ............................................................................................................. 40 Administration, Human Resources, Institutional and Public Affairs ...................................................... 43 Corporate Governance .................................................................................................................................. 47 Financial statements ....................................................................................................................................... 51 Financial statistics and review ...................................................................................................................... 79 Board of Directors and Management ......................................................................................................... 174 Glossary ............................................................................................................................................................ 178 CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC | 2000 1 Tables and graphs Highlights ............................................................................... 5 Financial statements Changes in the TSE 300 index ............................................. 10 Report of management ........................................................ 53 TSE 300 - sectorial returns .................................................... 10 Auditor’s Report .................................................................... 53 Changes in the S&P 500 index & NASDAQ ........................ 11 Financial statements ............................................................. 54 Changes in the NIKKEI 225 .................................................. 11 Supplementary information - Summary financial statements for the funds ....................... 72 Specialized portfolios returns .............................................. 15 Supplementary information - Financial review and returns ................................................. 16 Summary financial statements for the specialized portfolios ................................................ 76 Québec - Canada Changes in 10-year bond spreads ....................................... 17 Canada - U.S. Financial statistics and ten-year review Changes in 10-year bond spreads ....................................... 17 Changes in depositors’ holding in 2000 .............................. 80 Breakdown by specialized portfolio .................................... 18 Breakdown of depositors’ holdings ..................................... 84 Financial indices .................................................................... 19 Funds net assets .................................................................... 85 Québec CDP returns 1966-2000 .................................... 20 Annual interest or income Breakdown of the CDP Private equity portfolio ................. 23 paid out on average deposit ................................................ 86 Changes in the CDP Private equity portfolio ...................... 23 Summary of investments ...................................................... 87 CDP Private equity ............................................................. 24 Breakdown of investments in millions of dollars ................ 88 Sectorial breakdown ............................................................. 24 Summary of foreign investments ......................................... 90 Geographical breakdown CDP Mortgages - Mortgages of $5million and over .......... 92 of CDP Capital International portfolio ................................ 30 Summary of bond portfolio .................................................. 94 CDP Real Estate portfolio ..................................................... 32 Investments in canadian corporate Geographical breakdown of the shares and bonds by sector of activity ................................ 95 specialized Real Estate portfolio .......................................... 32 Investments in shares and bonds Asset allocation of the of publicly traded companies .............................................. 96 specialized Real Estate portfolio .......................................... 33 Investments in shares and bonds Real Estate sector breakdown .............................................. 34 of privately held companies ................................................. 148 Value added to depositors’ holdings Statement of real estate holdings ....................................... 168 since 1966 .............................................................................. 40 Statement of properties held for resale .............................. 172 Changes in depositors’ holdings ......................................... 41 Changes in private investments ........................................... 173 Depositors .............................................................................. 42 Administrative statistics .................................................. 173 Administrative statistics - external management ............... 173 2 2000 | CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC Message from the Chairman and CEO A global approach to fund management In 2000, the Caisse de dépôt et placement du Québec remained steadily on course in terms of its objectives for growth and profitability. In addition to setting its sights on quality returns, it strove to increase assets under management by securing additional clients and earning new management mandates. As a result, despite a dramatic drop in global financial markets, not only did Québec CDP preserve the integrity of its capital, it also brought up the total assets managed by its teams to $125 billion. This rise in critical mass enhances its capacity as a player on world markets and enables it to attract the most talented managers, two essential ingredients in maintaining its position as a worldwide leader in fund management. Remarkable performance in difficult times Turbulent times are often an ideal opportunity for winning investment approaches. In 2000, the diversification strategy based on sector, geography and product, proved once again successful, producing an overall return of 6.2%. This is remarkable considering the negative performance on many financial markets around the world. The "Caisse way" is an active management approach featuring a well-considered combination of boldness and caution. This year, Québec CDP achieved an added value of $996 million over the results that managers would have generated if they had simply reproduced their benchmark indices. Furthermore, total investment income and gains on the sale of investments reached $10.7 billion. Net income totalled $4.9 billion. From 1996 to 2000, the management teams outperformed their benchmark indices, generating an average annual return of 12.2%. Over the same period, cumulative income from investments reached $37.5 billion. For the six-year period from 1995 to 2000, the overall return stands at 13.2%. All in all – come rain, come shine – CDP group stands out because