Michael Sabia, the longest-serving boss of the Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund, will move on earlier than planned to head alma mater University of Toronto’s global affairs programme.
The 66-year-old will step down in February 2020. He had previously said he didn’t expect to complete his full term, which was due to end in March 2021.
Sabia, who served as CDPQ’s first non-Francophone CEO for 11 years, took over the pension fund amid the global financial crisis with the investment vehicle still reeling from a record 2008 loss of $39.8 billion. He steered the fund through that turbulent period and restored its standing with CDPQ producing 9.9% annualised returns over the past decade and nearly tripling its net assets from $120.1 billion to $326.7 billion. By comparison, Canada Pension Plan Investment Board, the country’s largest pension fund, cranked out 11.1% returns and Ontario Teachers’ Pension Plan, the third biggest, 10.1%.
Sabia, who earned a bachelor’s degree in political economy from University of Toronto before completing two graduate degrees at Yale University, also increased the fund’s foreign exposure with Canada now accounting for only 36% of CDPQ’s global asset base, down from 58% in 2008. As part of this strategy, he told VCCircle last year that the fund plans to triple its India exposure.
Since it officially set foot in India in 2016, CDPQ has invested across sectors such as infrastructure, real estate, stressed assets and renewable energy, among others, in partnership with Edelweiss Group, Piramal Enterprises, Kotak Mahindra Bank, and more.
Under Sabia, CDPQ invested especially in renewables in India. For instance, the pension fund owns nearly half of Azure Power with the most recent fund infusion announced today.
The renewables investments came as part of a strategy formed in 2017 to address climate change, under which the fund aimed to increase low-carbon assets in the portfolio and reduce its carbon intensity by 25%. Earlier this year, CDPQ announced, with a coalition of major global investors, that its portfolio would be carbon-neutral by 2050.
Interestingly, throughout all this, Sabia’s base salary remained unchanged from 2010 at $500,000, the first full year he worked in the job.
Now with the boss set to step down earlier than planned, CDPQ’s board has appointed an international firm to lead the selection process for Sabia’s replacement. The firm intends to conclude the process of appointing a successor by the beginning of 2020.
“Sabia has done an outstanding job as president and chief executive,” said Robert Tessier, chairman of the board, in a statement.
Tessier noted that Sabia had transformed CDPQ after the 2008 global financial crisis and had repositioned it with new ideas, while creating international career opportunities for Quebec’s finance professionals.