{"id":49358,"date":"2024-07-16T16:42:12","date_gmt":"2024-07-16T16:42:12","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2024\/07\/16\/fitch-ratings-says-canadian-pensions-face-mounting-real-estate-losses\/"},"modified":"2024-07-16T16:42:12","modified_gmt":"2024-07-16T16:42:12","slug":"fitch-ratings-says-canadian-pensions-face-mounting-real-estate-losses","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2024\/07\/16\/fitch-ratings-says-canadian-pensions-face-mounting-real-estate-losses\/","title":{"rendered":"Fitch Ratings says Canadian pensions face mounting real estate losses"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header article-header--story\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<p>Breadcrumb Trail Links<\/p>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\">Finance<\/li>\n<li class=\"breadcrumbs__item\">News<\/li>\n<li class=\"breadcrumbs__item\">Real Estate<\/li>\n<li class=\"breadcrumbs__item\">Commercial Real Estate<\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\">Fund titans well-positioned to absorb near-term market swings<\/p>\n<div class=\"callout callout--noindent flex-align-center flex-justify-between\" data-evt-val=\"{\" control_fields=\"\" data-evt=\"visible\" data-evt-typ=\"element_view\"><span class=\"callout__text\"> Get the latest from Barbara Shecter straight to your inbox <\/span><button class=\"button button--icon button--primary-alt\" data-id-login-redirect=\"https:\/\/financialpost.com\/author\/bshecter\/newsletters\/\" type=\"button\"><span class=\"button__text\">Sign Up<\/span> <span aria-hidden=\"true\" class=\"button__icon\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 11 11\" width=\"11\"><polygon points=\"1.1 0 7 6 1.1 12 0 10.9 4.8 6 0 1.1\"\/><\/svg> <\/span><\/button><\/div>\n<div class=\"article-meta\">\n<p><span class=\"published-date__since\">Published Jul 16, 2024<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">Last updated 51\u00a0minutes ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">3 minute read<\/span><\/p>\n<div class=\"article-meta__bottom\">\n<div class=\"bookmark-wrapper\">\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-no-style=\"\" data-popover-component=\"\" data-position=\"top\" data-sticky=\"\" data-tail-offset=\"200\" data-tail-position=\"right\"><button class=\"popover__trigger bookmark-button\"><span class=\"save-article-button save-article-button--default\" title=\"Save article\" data-article-id=\"49815e34-94c2-4a0f-80a2-09c492209328\" data-evt-skip-click=\"true\"\/><\/button><\/p>\n<div aria-describedby=\"popover-desc-popover-bookmark\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<div class=\"popover__content__text\" id=\"popover-desc-popover-bookmark\">\n<div class=\"bookmark__popover__content\">\n<p>You can save this article by registering for free here. Or sign-in if you have an account.<\/p>\n<\/div>\n<\/div>\n<p><button class=\"popover__content__close\" data-evt-skip-click=\"true\" title=\"Close\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" viewbox=\"0 0 12 12\" class=\"icon--close\" height=\"12\" version=\"1.1\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=564&amp;h=423&amp;type=webp&amp;sig=4187XyX3WYCQY4suPqTEQA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=1128&amp;h=846&amp;type=webp&amp;sig=-v3Q0lVKr7RahHG2DjlpOw 2x\" type=\"image\/webp\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=564&amp;h=423&amp;type=jpg&amp;sig=nEWufPS6TAgwbTjhqpMRxQ,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=1128&amp;h=846&amp;type=jpg&amp;sig=3GLB6lwcZP9ujpmk3fkc7Q 2x\" type=\"image\/jpeg\"><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=472&amp;h=354&amp;type=webp&amp;sig=26-n4Ymop3Q8URk0w2vMbA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=webp&amp;sig=xFcH3R_WNqA6rrTBskCb8g 2x\" type=\"image\/webp\"><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=472&amp;h=354&amp;type=jpg&amp;sig=i5RPq7fNU_mEnkYXlveoYA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=jpg&amp;sig=mp0XeA89vCBmQd_Jkn8PgA 2x\" type=\"image\/jpeg\"><source media=\"(max-width: 767px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=288&amp;h=216&amp;type=webp&amp;sig=70BGiZ0SEqnQobFV-Um6xQ,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/775933202.jpg?quality=90&amp;strip=all&amp;w=576&amp;h=432&amp;type=webp&amp;sig=r55viGCM1YG_X952td0a7Q 2x\" type=\"image\/webp\"><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Canada&#8217;s major pension plans face mounting losses in the real estate sector due to higher for longer interest rates.<\/span> <span class=\"credit\">Photo by John Taggart<\/span> \/<span class=\"distributor\">Bloomberg<\/span><\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Canada\u2019s large pensions are facing rising losses from real estate investments, according to a sector report by Fitch Ratings Inc., which concluded that fund titans are nevertheless well-positioned to absorb near-term market swings.<\/p>\n<p>\u201cFitch believes Canadian pension fund investment portfolios will remain pressured by a challenging market backdrop, as the increased cost of debt and anticipated slower growth weigh on private asset valuations,\u201d said Dafina Dunmore, senior director of the ratings agency.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_2\">\n<section aria-describedby=\"advertisment8758702829324503686946433609498624\" class=\"ad\">\n<p>Advertisement 2<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<div class=\"article-block article-block-bg article-content__sign-in-group hidden\" data-aqa=\"identity-sign-in\" data-async=\"\" id=\"article-block\">\n<section class=\"row\">\n<header class=\"identity-intro col-xs-12 col-md-6 flex-justify-center\">\n<div class=\"col-xs-12 col-sm-10 col-md-10\"><img decoding=\"async\" alt=\"Financial Post\" class=\"market-logo\" height=\"37\" loading=\"lazy\" src=\"https:\/\/dcs-static.gprod.postmedia.digital\/16.5.1\/websites\/images\/identity\/logo-identity-fp.svg\" width=\"280\"\/><\/p>\n<div class=\"intro-body__premium hidden\">\n<p>THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY<\/p>\n<p class=\"identity-intro__description\">Subscribe now to read the latest news in your city and across Canada.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Exclusive articles from Barbara Shecter, Joe O&#8217;Connor, Gabriel Friedman, Victoria Wells and others.<\/li>\n<li>Daily content from Financial Times, the world&#8217;s leading global business publication.<\/li>\n<li>Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.<\/li>\n<li>National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.<\/li>\n<li>Daily puzzles, including the New York Times Crossword.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__register hidden\">\n<p>SUBSCRIBE TO UNLOCK MORE ARTICLES<\/p>\n<p class=\"identity-intro__description\">Subscribe now to read the latest news in your city and across Canada.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Exclusive articles from Barbara Shecter, Joe O&#8217;Connor, Gabriel Friedman, Victoria Wells and others.<\/li>\n<li>Daily content from Financial Times, the world&#8217;s leading global business publication.<\/li>\n<li>Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.<\/li>\n<li>National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.<\/li>\n<li>Daily puzzles, including the New York Times Crossword.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__anonymous\">\n<p>REGISTER \/ SIGN IN TO UNLOCK MORE ARTICLES<\/p>\n<p class=\"identity-intro__description\">Create an account or sign in to continue with your reading experience.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Access articles from across Canada with one account.<\/li>\n<li>Share your thoughts and join the conversation in the comments.<\/li>\n<li>Enjoy additional articles per month.<\/li>\n<li>Get email updates from your favourite authors.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/header>\n<div class=\"identity-screen m-x-0 p-x-0 col-xs-12 col-md-6 flex-justify-center flex-align-center\" aria-live=\"assertive\">\n<section class=\"sail\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-sailthru-personalization-engine=\"\" data-sailthru-personalization-engine-component=\"\"\/>\n<div class=\"m-x-0 p-x-0 col-xs-12 col-sm-6 col-md-12 flex-align-justify-center\" data-auth-component=\"\" id=\"auth-screen-form\">\n<div class=\"identity-screen-form--active w-full flex-align-justify-center\">\n<div class=\"identity-screen-form identity-screen__content w-full\">\n<h2 class=\"blocker-title\">Sign In or Create an Account<\/h2>\n<p><span class=\"identity-divider__line\"\/><span class=\"identity-divider__text\">or<\/span><span class=\"identity-divider__line\"\/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<footer class=\"identity-footer identity-screen__content m-x-0 p-x-0 col-sm-6 col-md-12\"\/><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>However, she said the funds have \u201cexceptionally strong liquidity,\u201d which will provide sufficient cushion to absorb investment volatility and flexibility to work through troubled investments.<\/p>\n<p>\u201cThey are not forced sellers of assets,\u201d Dunmore said.<\/p>\n<p data-async=\"\">The Canadian pension funds tracked by Fitch managed approximately $2.1 trillion of net assets as of Dec. 31, 2023.<\/p>\n<p data-async=\"\">The Fitch report looked at seven large Canadian pension funds: Alberta Investment Management Corp., British Columbia Investment Management Corp. (BCI), Caisse de d\u00e9p\u00f4t et placement du Qu\u00e9bec, Canada Pension Plan Investment Board (CPPIB), Ontario Municipal Employees\u2019 Retirement System, Ontario Teachers\u2019 Pension Plan, and the Public Sector Pension Investment Board.<\/p>\n<p data-async=\"\">Real estate property values are being hit by a combination of factors including higher borrowing costs, scarcity of financing options and a general repricing of assets. The effect on office properties is amplified by the shift to remote work and Fitch expects continuing losses in Canadian pension fund office portfolios into 2025 as refinancing requirements mount.<\/p>\n<\/section>\n<div class=\"js-widget-content article-content__widget-group article-content__widget-group--content-slot16\">\n<section class=\"newsletter-widget__new-story-page fp-headlinenews background--primary-light-gradient\" aria-labelledby=\"FinancialPostTopStories3996301948850847772697773712867328\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\">\n<div class=\"newsletter-new-story-page-template\">\n<div class=\"newsletter-widget__header__new-story-page\">\n<div class=\"newsletter-widget__banner__new-story-page\"><img decoding=\"async\" alt=\"Top Stories\" loading=\"lazy\" src=\"https:\/\/dcs-static.gprod.postmedia.digital\/16.5.1\/websites\/images\/newsletters\/icon-fp-topStories.svg\"\/><\/div>\n<div>\n<p>Top Stories<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">Get the latest headlines, breaking news and columns.<\/p>\n<\/div>\n<\/div>\n<div class=\"newsletter-widget__body__new-story-page\">\n<div class=\"js-replace-main__new-story-page\">\n<p class=\"newsletter-widget__disclaimer__new-story-page text-size--tiny\">By signing up you consent to receive the above newsletter from Postmedia Network Inc.<\/p>\n<\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<p>Thanks for signing up!<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text__new-story-page newsletter__feedback--last\">The next issue of Top Stories will soon be in your inbox.<\/p>\n<\/div>\n<p class=\"newsletter-widget__text__new-story-page js-submit-error\" style=\"margin-top: 8px\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\">We encountered an issue signing you up. Please try again<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_3\">\n<section aria-describedby=\"advertisment5763373835894906275681655217717248\" class=\"ad\">\n<p>Advertisement 3<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>The ratings agency said it has not seen widespread private credit losses, though defaults are likely to tick up for the remainder of this year and into 2025 given higher debt service burdens for underlying borrowers and slowing growth.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>\u201cPension funds that invest directly in private credit will be put to the test with respect to their workout capabilities,\u201d Dunmore said.<\/p>\n<p data-async=\"\">Canadian pension funds are responding to market conditions, including higher for longer interest rates, by increasingly reallocating inflows and sale proceeds to government bonds, according to Fitch. Meanwhile, the fund giants were largely net sellers of private equity assets in 2023 after binging on the asset class following several years of strong returns.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<section aria-labelledby=\"moreTopicLabel2898964625909350069158737908596736\" class=\"more-topic\" data-aqa=\"embed-more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\">\n<p>Recommended from Editorial<\/p>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/><\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li data-evt-val=\"{\" control_fields=\"\" capital=\"\" rules=\"\" will=\"\" be=\"\" costly=\"\" for=\"\" canadian=\"\" banks=\"\" says=\"\" analyst=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"Royal Bank of Canada\u00a0has urged Canadian regulators to rethink capital requirements imposed on this country\u2019s largest financial institutions.\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/banks-0619-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=nvtblqQ5HdPylc32fwyxXg\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/banks-0619-ph.jpg?h=96&amp;strip=all&amp;quality=5&amp;sig=eV9VsPgYWONMGb3MnqFGAQ\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/banks-0619-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=nvtblqQ5HdPylc32fwyxXg, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/banks-0619-ph.jpg?h=192&amp;strip=all&amp;quality=80&amp;sig=LUNSwZWLBB-VpShWBBqXPQ 2x,&#10;                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/banks-0619-ph.jpg?h=288&amp;strip=all&amp;quality=80&amp;sig=tQcFTj9n_O9gjzpplLWfZQ 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">New capital rules will be costly for Canadian banks, says analyst<\/span><\/p>\n<\/li>\n<li data-evt-val=\"{\" control_fields=\"\" keeps=\"\" big=\"\" banks=\"\" stability=\"\" buffer=\"\" unchanged=\"\" on=\"\" risks=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"The Office of the Superintendent of Financial Institutions held\u00a0the domestic stability buffer for Canada's banks at 3.5 per cent Tuesday. \" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/osfit-0618-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=Jn0ydWKZhqQGtaERdt1ESw\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/osfit-0618-ph.jpg?h=96&amp;strip=all&amp;quality=5&amp;sig=tXObOWCRIsuJRhcfihEHxw\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/osfit-0618-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=Jn0ydWKZhqQGtaERdt1ESw, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/osfit-0618-ph.jpg?h=192&amp;strip=all&amp;quality=80&amp;sig=A743rFIF1U4KAOwpQimXVA 2x,&#10;                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/06\/osfit-0618-ph.jpg?h=288&amp;strip=all&amp;quality=80&amp;sig=yjf_RFqfJgbkkiN9iXIJGQ 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">OSFI keeps big banks&#8217; stability buffer unchanged on &#8216;stable&#8217; risks<\/span><\/p>\n<\/li>\n<li data-evt-val=\"{\" control_fields=\"\" say=\"\" borrowers=\"\" showing=\"\" strain=\"\" of=\"\" higher=\"\" for=\"\" longer=\"\" rates=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"Canadian bank earnings reveal signs that borrowers are feeling the strain as higher interest rates persist. \" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/canada-banks-0531-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=dyNIvx7dtD1Ig9tyhDCfyg\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/canada-banks-0531-ph.jpg?h=96&amp;strip=all&amp;quality=5&amp;sig=hC6sugrbzgb90J551x1lXg\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/canada-banks-0531-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=dyNIvx7dtD1Ig9tyhDCfyg, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/canada-banks-0531-ph.jpg?h=192&amp;strip=all&amp;quality=80&amp;sig=r6KvbObjYyWUhJk1PW3o2g 2x,&#10;                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/05\/canada-banks-0531-ph.jpg?h=288&amp;strip=all&amp;quality=80&amp;sig=6XTf5pfcsUQgIp2q25lg6g 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">Banks say borrowers showing strain of higher for longer rates<\/span><\/p>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/><\/section>\n<p>\u201cWhile further reductions to private equity are expected, Fitch believes the funds continue to be long-term investors in private assets,\u201d the ratings agency said.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_4\">\n<section aria-describedby=\"advertisment4110205911952418068079146851893248\" class=\"ad\">\n<p>Advertisement 4<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<div class=\"x_elementToProof\">\n<p>Various factors including the appetite for deals led some of the pension funds to become over-exposed to private equity within their larger portfolio of investments. Moreover, private equity plays generally require a high amount of leverage, which works to their advantage in a time of declining interest rates, but becomes a drag when the debt is rolled over at much higher rates.<\/p>\n<p>In May, BCI sold stakes in private equity funds to French buyout firm Ardian for more than US$1 billion. Ardian also bought a private equity portfolio valued at nearly US$3 billion from Quebec\u2019s Caisse de d\u00e9p\u00f4t in 2022.<\/p>\n<p>And late last year, CPPIB, which invests on behalf of the Canada Pension Plan, sold Ardian a diversified portfolio of limited partnership fund interests in mostly North American and European buyout funds for around US$2 billion.<\/p>\n<\/div>\n<p data-async=\"\"><em>\u2022 Email: bshecter@nationalpost.com <\/em><\/p>\n<p data-async=\"\"><em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em><\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt-val=\"{\" control_fields=\"\" data-evt-typ=\"page_scroll\">\n<p>Share this article in your social network<\/p>\n<\/section>\n<\/div>\n\n<br \/>Fitch Ratings says Canadian pensions face mounting real estate losses<\/a><br \/>\n<br \/>2024-07-16 16:42:12<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links Finance News Real Estate Commercial Real Estate Fund titans well-positioned to absorb near-term market swings Get the latest from Barbara Shecter straight to your inbox Sign Up&#8230;<\/p>\n","protected":false},"author":2,"featured_media":49359,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-49358","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/49358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=49358"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/49358\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/49359"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=49358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=49358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=49358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}