The integration of Ivanhoé Cambridge and Otéra Capital into the Caisse de dépôt etplacement du Québec (CDPQ) will result in significant layoffs within the three organizations, its president and CEO Charles Emond confirmed on Thursday.
“It is inevitable that there will be job losses,” he replied on the sidelines of the presentation of his financial results for the 2023 financial year. […] We don't have the final number yet. But it’s still a number that could be important.”
The CEO of the Caisse de dépôt etplacement du Québec, Charles Emond. Archive photo, Francis Halin
A month ago, on January 24, the fund announced a reorganization of its activities. As part of this, the Caisse is repatriating its two real estate subsidiaries, Otéra Capital and Ivanhoé Cambridge, into its organization, ultimately achieving synergy savings of $100 million per year.
Ivanhoé Cambridge President Nathalie Palladitcheff, a respected figure in the real estate industry, has announced her departure from the organization. His counterpart Rana Ghorayeb, CEO of Otéra Capital, will remain in office for the time being.
“Significant” deletions
Stating that an evaluation process has been initiated for each of these functions, management has always refused to quantify the number of employees who have lost their jobs or will lose their jobs in the coming months.
The headquarters of the Caisse de dépôt etplacement du Québec in Montreal. Archive photo, Martin Alarie
But at our urging, the CEO of the Caisse agreed to open his game further. “We are still in the middle of the evaluations. But are we talking about dozens? [de mises à pied]? asked Mr. Emond. No, we are talking about something more important or larger in terms of the number of employees [qui seront remerciés].”
The Caisse's two real estate subsidiaries currently employ 640 people, including 490 at Ivanhoé Cambridge and 150 at Otéra Capital. Combined, they amount to $300 million in expenses, compared to $800 million for the Caisse.
These are three units that have historically developed independently of each other and whose cost structure Charles Emond described on Thursday as “appropriate”.
Long planned
The ongoing restructuring, which is scheduled to last four years, poses the risk of significant changes. “This is where we go from something reasonable to something that will be extremely optimal,” the CEO said.
Nathalie Palladitcheff, President and CEO of Ivanhoé Cambridge. She announced last month that she was leaving the organization. ARCHIVE PHOTO, QMI AGENCY
At the end of the day, is your mission for four years to dismantle Ivanhoé Cambridge? We asked the outgoing CEO.
“It doesn’t feel like we did that,” Ms. Palladitcheff quickly objected. Because we have grown assets 1.5 times and beat the index four times in the last 10 years, including three times in the last three years. What I deliver today is the best Ivanhoe possible. So I wouldn’t call it dismantling.”
In response, Mr. Emond said that neither Otéra Capital nor Ivanhoé Cambridge would be dissolved, but that the two subsidiaries would simply be integrated into the Caisse, which would ultimately allow it to better manage Quebecers' savings.
To achieve this, the Caisse must buy back the minority stakes of the Desjardins Movement Pension Plan, Rio Tinto and the Montreal Police Officers in these two subsidiaries. The scope of the operation has not yet been announced, but it is expected to be completed by the end of April.
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