Quebec’s public pension fund manager, Caisse de dépôt et placement du Québec, said today that it took a $1.9 billion provision in fiscal 2007 on its $12.6 billion of asset-backed commercial paper (ABCP) holdings.

The provision, which amounts to 15% of the Caisse’s ABCP holdings, trimmed its overall return for the year ended Dec. 31 by 1.3 percentage points to 5.6%.

The Caisse said $1.4 billion of the provision is related to assets on which it expects to recover full value over time.

The other $469 million provision is on the Caisse’s holding of U.S. subprime mortgages that carry a face value of $782 million.

“The probability of recovery at maturity for this provision is low,” the Caisse said in a news release.

The Caisse has $155.4 billion of assets and is Canada’s largest pension fund, is widely regarded as its most influential institutional investor.