CAAT Pension earns 8.4% as stock gains outweigh weak PE returns

The Tonrot-based pension plan is “modestly” exposed to software companies affected by advancements in artificial intelligence across its private equity and credit holdings. Photo by Dave Thomas/Toronto Sun/QMI Agency

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The gains, which pushed assets to $25.4 billion, were below the benchmark of 11.2 per cent. That was driven “almost entirely” by the pension plan’s private equity allocation, which returned 1.5 per cent compared to its benchmark of 19.6 per cent, according to CAAT’s annual report published Thursday.

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Public equity holdings gained 21.7 per cent in 2025, while credit and real assets returned 3.7 per cent and 4.1 per cent, respectively.

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Private markets suffered from constrained liquidity and subdued deal activity last year as higher interest rates and macroeconomic uncertainty weighed on investor sentiment and valuations, the Toronto-based pension plan said in the report.

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The pension plan is “modestly” exposed to software companies affected by advancements in artificial intelligence across its private equity and credit holdings, chief investment officer Kevin Fahey said, adding that the exposure won’t be a “significant headwind in either portfolio.”

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CAAT plans to allocate capital to real assets this year as it remains underweight its target mix, said Fahey, who is also acting chief executive. “We have some work to do specifically in that space, and that will come out of a combination of the public equity and fixed income markets.”

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The softer United States dollar also hurt CAAT’s returns last year. Canadian pension funds are among the largest holders of U.S. assets in the world, and are vulnerable to a weaker greenback.

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CAAT, which serves more than 850 employers in 20 industries, has been dealing with internal tension in recent months.

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The board of trustees launched an independent review after a controversial payment to the then-chief executive exposed broader concerns about governance, board oversight and workplace conduct.

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Chief executive Derek Dobson exited the fund in March after being placed on leave amid concerns over $1.6 million he received for unused vacation time. Three of the pension plan’s senior executives had approached the board in November with concerns over that payout and a relationship between Dobson and another CAAT employee.

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CAAT made Fahey acting CEO after Dobson went on leave. The board is focused on appointing a permanent CEO, according to the annual report.

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“CAAT’s independent governance review is now in its final stages,” the pension plan said in a statement.

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Fahey said he’s confident in CAAT’s ability to maintain a long-term focus for its members. “We’re going to do a good job setting up our next CEO for success,” he said.

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