The Colleges of Applied Arts and Technology Pension Plan reported mixed results for 2025, with strong public market performance offsetting underperformance in private equity and real assets, according to its annual report.
The plan generated an 8.4% net return for the year, trailing its policy benchmark of 11.2% and resulting in negative value added of 2.8 percentage points. The shortfall was driven largely by private equity, which significantly underperformed its benchmark during a year when public equities surged.
Despite the one-year setback, CAAT’s longer-term performance remains strong. The fund delivered a 9.6% annualized net return over the 10-year period, outperforming its policy benchmark by 0.9 percentage points annually and exceeding its discount rate. Over the five-year period, the plan returned 9.1% annualized, also ahead of the benchmark.
“CAAT’s investment program continues to deliver long-term returns that promote plan health,” said Kevin Fahey, the plan’s chief investment officer and acting chief executive officer.
The results come amid a leadership transition that included the departures of the plan’s former CIO, chief pension officer and chief financial officer, followed by the resignation of its longtime CEO and plan manager Derek Dobson.
Dobson left the plan in March after reaching a settlement with the Board that included repaying a $1.6M vacation payout, which had, reportedly, drawn scrutiny by senior leaders at the plan and kickstarted a governance review that is still underway.
Dispersion in results
Public equities were the largest contributor to performance in 2025, returning 21.7% and outperforming the MSCI ACWI benchmark by 5.1 percentage points. The gains reflected a mix of long-only equity strategies, hedge funds and derivative-based portable alpha approaches.
Commodities also added value, returning 4.5% and exceeding the S&P GSCI benchmark by 2.4 percentage points.
Private equity was the primary detractor, returning 1.5% against a 19.6% benchmark, a gap of 18.1 percentage points. CAAT attributed the divergence to private markets lagging public equity returns during the year, weighing on benchmark-relative performance.
Real assets also underperformed, returning 4.1% compared with a 6.2% benchmark, while credit returned 3.7%, below its 4.4% benchmark.
Return-enhancing assets accounted for 55% of the portfolio, including public equities (30%), private equity (17%) and credit (8%). Inflation-sensitive assets made up 33%, including real assets (25%), inflation-linked bonds (5%) and commodities (3%), while 12% was allocated to interest-rate-sensitive investments, consisting of nominal bonds.
Nominal bonds returned 4.2%, outperforming their benchmark by 0.5 percentage points, while inflation-linked bonds returned 1.5%, modestly ahead of benchmark. Canadian holdings represented 23.9% of total assets.
Funded status strengthens
As of Jan. 1, 2026, the plan reported $25.4B in assets, up from $23.3B a year earlier, with a funding reserve of $6.7B. The report noted the plan is 124% funded, holding $1.24 in assets for every dollar of pension obligations.
CAAT also reported $1.9B in asset smoothing reserves, representing deferred gains to be recognized in future valuations.
The results reflect a broader market pattern in 2025, in which strong public equity markets outpaced private assets, creating headwinds for benchmark-relative performance despite solid absolute returns.