CRCD Posts Strong Returns, Pivots Investment Strategy for Quebec SMEs

MONTREAL, QC – February 19, 2026 – Capital régional et coopératif Desjardins (CRCD) has announced a solid financial performance for 2025, reporting a 4.3% annual return and net earnings of $116.5 million. The results boosted its share price to $19.45, an increase of $0.81 over the previous year. While celebrating these gains, the fund is also embarking on a significant strategic transformation, shifting its investment model to better support Quebec's small and medium-sized enterprises (SMEs) in the years to come.

Resilience Fuels Strong Portfolio Performance

The fund's 4.3% annual return was largely driven by the standout performance of its "Investments impacting the Quebec economy" portfolio, which yielded an impressive 7.4%. This core segment, which represents CRCD's direct mission to foster regional economic development, demonstrated significant strength despite what the company described as an "uncertain economic and geopolitical environment."

"In an economic environment that's still marked by uncertainty, the portfolio's performance mainly reflects the resilience of businesses we're supporting across Quebec," stated Nathalie Bernard, Chief Operating Officer of Desjardins Capital, the fund's manager. "Whether it's diversifying their markets, boosting their competitive edge or maintaining their growth trajectory, the issues faced by business owners call for constant presence and tailored solutions."

This performance is particularly noteworthy when viewed against the backdrop of the broader Canadian market. While the S&P/TSX Composite Index delivered a remarkable 28.2% return in 2025 and many Canadian equity funds saw double-digit gains, CRCD's mandate is fundamentally different. Its goal is not solely to chase market highs but to provide stable, long-term capital to a diverse range of businesses across Quebec. The 7.4% return from its Quebec-focused investments suggests success in this mission-driven approach.

The fund's "Other investments" portfolio, which includes more traditional market assets, posted a more modest 4.0% return. This result was buoyed by gains in most asset classes but was tempered by the negative impact of rising long-term interest rates on the value of its bond holdings.

A New Era: The Shift to an Indirect Investment Model

Perhaps the most significant development is the structural change to CRCD's operations. Effective January 1, 2026, the fund has implemented a new business model first announced in August 2025. Under this new framework, all of its investments aimed at the Quebec economy will now be made exclusively indirectly, channelled through private partner funds managed by its long-time manager, Desjardins Capital.

This strategic pivot marks a departure from its previous approach, which included direct investments in companies. According to the organization, the change is designed to strengthen governance, enhance performance management, and increase the resources available for the growth and long-term sustainability of local businesses. By leveraging the specialized expertise and established fund structures of Desjardins Capital, CRCD aims to streamline its investment process and potentially expand its reach and impact.

This shift, however, raises questions about the future dynamics of its investment strategy. While the new model promises greater efficiency and access to Desjardins Capital's deep expertise in private equity, it also introduces a layer between CRCD and the businesses it supports. Ensuring that the partner funds remain fully aligned with CRCD's foundational mission—to support a diverse range of enterprises across all of Quebec's regions—will be critical. For the fund's nearly 109,000 shareholders, maintaining transparency on how and where their capital is deployed will be essential for continued confidence.

The Shareholder Equation: Tax Credits Meet Market Realities

For many of its retail investors, the primary appeal of CRCD shares lies in the significant 25% provincial tax credit, a long-standing incentive designed to mobilize local capital for local businesses. Investors still have a brief window, until the end of February 2026, to purchase up to $5,000 in shares to apply this credit to their 2025 fiscal year taxes.

The data for fiscal 2025 reveals a mixed picture of investor activity. While the fund saw new share subscriptions totalling a substantial $131 million, it also processed redemptions amounting to $161 million. This net outflow suggests that while the tax credit remains a powerful motivator for new investment, a larger number of long-term shareholders chose to redeem their shares, many of whom may have completed the mandatory seven-year holding period. This dynamic highlights the balancing act CRCD must perform: attracting new capital while managing the liquidity needs of its existing shareholder base.

With net assets now standing at $2.81 billion, the fund continues to be a major force in Quebec's economy. The compounded annual returns over longer periods—4.0% over three years and 4.4% over ten years—paint a picture of steady, if not spectacular, growth, which may appeal to investors with a lower risk tolerance and a focus on the tax advantages.

Desjardins Capital Takes Center Stage

The new indirect investment model places Desjardins Capital, as the manager, at the very heart of CRCD's mission. Its role will evolve from managing a mixed portfolio of direct and indirect investments to overseeing a network of private partner funds responsible for deploying CRCD's capital. This consolidates significant responsibility and influence within Desjardins Capital.

The success of this strategic shift will hinge on Desjardins Capital's ability to effectively manage these partner funds in a way that not only generates financial returns but also fulfills CRCD's socio-economic mandate. This includes continuing to support over 675 businesses, cooperatives, and funds across the province, a commitment that currently stands at over $2.17 billion.

As Nathalie Bernard noted, providing "hands-on and attentive support" is key. The new structure will test whether this support can be delivered as effectively through an indirect model. The board of directors has expressed confidence that the change will foster sustainable growth and ensure CRCD's long-term solidity, opening the door to new market opportunities while reinforcing its foundational role in Quebec's entrepreneurial ecosystem. The fund's shareholders will be watching closely as this new chapter unfolds, with the 25th Annual General Meeting scheduled for April 8, 2026, offering the next opportunity for a detailed update.