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Canadian firm writes off $150M Celsius bet

on Aug 17, 2022
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  • CDPQ backed Celsius Network in October 2021, pumping $150 into the crypto lender.
  • With Celsius going bankrupt, the firm says its investment came "too soon."
  • The pension fund manager recorded a 7.9% loss in the first half of the year.

Caisse de Depot et Placement du Québec (CDPQ), one of the largest pension fund managers in Canada, has reportedly written off the $150 million investment it put in bankrupt crypto lender Celsius Network.

In a press release on Wednesday, CDPQ acknowledged that the Celsius bet might have been made a little “too soon.” But while that’s the case, the Quebec-based company said it had done all the due diligence it had to do before taking the bet in October 2021 – just before crypto reached the bull market peak (in November).

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Charles Emond, the CDPQ CEO said that its team consulted and approached the stake cautiously, and did not see the eventuality that registered in June. And with Celsius bankrupt, plus millions of people hit by the losses, the pension fund manager is writing off their stake.

However, even as they do so, Emond noted that the firm is looking at legal possibilities.

CDPQ’s returns

The company’s announcement on Wednesday came as it released an update of its six-month returns.

According to the report, the firm saw a -7.9% return over the first half of 2022, with the fixed income portfolio dropping 13.1% and public stocks -16%. Overall, as the broader market suffered, CDPQ net assets declined to $303 billion.

Factors that impacted the market included rising inflation, higher interest rates and the geopolitical tensions exacerbated by Russia’s invasion of Ukraine.

Also detrimental to returns were the massive declines in equities and bonds, – it is this same scenario that contributed to the crypto crash and the contagion that followed.

It’s these factors that translated into several “collateral effects” that hit Celsius Network and other crypto companies very hard, with Celsius carrying a $1.2 billion hole in its balance sheet.