CPPIB’s ORPEA Debacle
CICTAR sent a detailed list of allegations included in this report to CPPIB, and also provided relevant findings to PSP and to the key individuals named in the report, offering an opportunity to respond and comment. The only response received was from PSP, who provided the following information:
PSPIB has exited of all public pay long-term care operations in Canada;
As of today, Revera no longer operates any public pay long-term care facilities in Canada.
Revera is now focused primarily on brick-and-mortar real estate investment in seniors' housing, operated by leading managers;
We require all our portfolio companies to comply with the law, regulations, and best industry practices;
and
• PSPIB has exited its investment in Clariane S.E. (formerly Korian) in June 2024
Le rapport est aussi disponible en français ici.
The Canada Public Pension Plan Investment Board (CPPIB) shirked its responsibility as the value of its major investment in Orpea, Europe’s largest long-term care company, collapsed, resulting in a massive loss to the plan that funds workers’ retirement in Canada. CPPIB, the board that invests on behalf of more than 22 million contributors and beneficiaries of Canada’s public pension fund, was the dominant shareholder in Paris-based Orpea for a decade and lost over C$500 million dollars when it exited. CPPIB claims to be a responsible long-term investor and has a strong set of guiding principles with high ethical standards. But this debacle reveals serious shortcomings in the CPPIB’s governance and conduct, and invites questions about its broader investment approach. The collapse of Orpea was a seismic event in France, sending shockwaves through the long-term care sector across Europe. In Canada, however, it caused barely a tremor.
The Orpea scandal, involving catastrophic treatment of elderly residents and care workers, raises broader questions about public pension fund investment in the private long-term care industry, which relies heavily on public funding and has a long-track record of failing to meet the basic human rights of society’s most vulnerable people
Without learning from past, these tragic failures are likely to be repeated.
This report explains in detail the crisis that unfolded at Orpea and the failure of CPPIB to adequately oversee and intervene in one of its largest global investments