Canada pension funds are stronger together, Caisse says

Fri Jan 13, 2012 1:48pm EST
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By Pav Jordan

MONTREAL (Reuters) - The head of Canada's most storied pension fund wants rivals to be partners as debt-laden governments offload assets, and says a recent bid with two other pension funds for the nation's leading stock market operator is a good start.

"The longest journey begins with a single step," Michael Sabia, chief executive of the nearly 50-year-old Caisse de depot et placement du Quebec, told Reuters in an interview from its headquarters in the francophone city of Montreal.

The Caisse and three other pension fund administrators joined forces with some of Canada's largest banks to bid for TMX Group (X.TO: Quote), owner of the Toronto Stock exchange.

The C$3.8 billion ($3.72 billion) deal still requires regulatory approval, but it shows a shift in mindset for funds that in the past rarely worked in such large groups.

"It's a process. ... You start with small stuff and then you do slightly bigger stuff and then people start phoning each other and they learn that having dinner together is a good idea. That's how it works," said Sabia, one of Quebec's best-known business leaders.

Sabia, described as a workaholic by his staff, exudes zen-like serenity as he looks out over the city from Caisse headquarters on the edge of Montreal's Old Town.

"The way it has to work is that organizations have to learn to work together," said Sabia, who joined the Caisse after serving as chief executive of BCE, parent of Bell Canada.

Canadian pension funds emerged from the 2008-09 economic crisis as some of the biggest players on the world stage, second only to sovereign wealth funds in size. The top five funds manage more than half a trillion dollars in assets between them, giving them the heft and focus to acquire the massive infrastructure projects hitting the market.   Continued...