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CDPQ Halts Private Deals in China, Shifts Focus to Singapore Amid Geopolitical Challenges

Published by
Matthew Martins
  • Canada’s CDPQ, the second-largest pension fund, has halted private deals in China and will close its Shanghai office later this year.
  • The pension fund is now focusing on liquid markets and leading its investment efforts from Singapore.
  • CDPQ’s decision follows a broader trend of major investment institutions reassessing their strategies in light of geopolitical tensions, regulatory changes, and economic challenges in China.

Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), has made the decision to halt private deals in China and plans to shut down its Shanghai office later this year, according to sources familiar with the matter as reported by the Financial Times on Thursday.

CDPQ, which is still maintaining business interests in China, has shifted its regional investment efforts to Singapore, where it is currently leading its investment initiatives, as per the report. The pension fund has opted to focus on liquid markets, which constitute the majority of its two percent total portfolio exposure to China. CDPQ stated that it expects this trend to persist in the foreseeable future.

The news of CDPQ’s change in investment strategy comes in the wake of a broader shift among major investment institutions with exposure to China. Singapore’s sovereign wealth fund, GIC, had previously announced a reduction in private investments in China, as reported by the Financial Times in February. Similarly, in April, Ontario Teachers’ Pension Plan (OTPP), Canada’s third-largest pension fund, closed down its China equity investment team based in Hong Kong.

CDPQ’s decision to suspend private deals in China and close its Shanghai office reflects the growing complexities and uncertainties surrounding investment in the country. The pension fund’s move aligns with a broader trend of global investors reassessing their strategies and risk appetite in light of geopolitical tensions, regulatory changes, and economic challenges in China.

The Chinese government’s increased regulatory scrutiny, particularly in sectors such as technology and education, has raised concerns among international investors regarding their ability to navigate the market effectively. Such concerns have prompted many institutional investors to reassess their investments in China and explore alternative opportunities elsewhere.

CDPQ’s shift to Singapore as its regional investment hub underscores the city-state’s attractiveness as a financial center and its role as a gateway to the broader Asia-Pacific region. Singapore has long been regarded as a stable and investor-friendly jurisdiction, with robust regulatory frameworks and an established presence of global financial institutions.

Matthew Martins

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Published by
Matthew Martins

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