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CPPIB's CEO Sounds Alarm on Illiquid Assets

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Paul Sambo of Bloomberg News reports that CPPIB's Mark Machin warns on global rush into illiquid assets:
The biggest global funds should all be monitoring their investments in illiquid assets, according to the head of Canada’s largest pension fund.

“I do ring the alarm bell on not to be too invested in illiquid assets,” Mark Machin, chief executive officer of the Canada Pension Plan Investment Board, said in a Bloomberg Television interview Monday at the World Economic Forum in Davos. “We are very comfortable with our risk models and what we would do in various lurches down markets, but I do worry about the expansion of a lot of funds like us around the world into private illiquid assets.”

Lower-for-longer interest rates have pushed pension funds and asset managers to cast their nets far and wide in search for returns amid a slew of geopolitical risks and trade tensions. Investors looking to diversify their portfolios are seeking shelter in low volatility assets that tend to be i…

White Smoke at the Caisse?

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Last Thursday, Denis Lessard and André Dubuc of La Presse reported that CDPQ's Board of Directors is recommending Macky Tall to take over the helm of that organization as Michael Sabia sets to depart. The article is in French so I took the liberty to translate it using Google and edited some passages:
White smoke marking the choice of the new president of the Caisse de depot et placement du Quebec (CDPQ) is about to appear. The committee of the board of directors of the organization responsible for finding the rare pearl recommends the choice of Macky Tall, president of CDPQ Infra and senior manager of the Metropolitan Express Network (REM) project in Montreal, several sources told La Presse.

But Mr. Tall’s candidacy faces obstacles within government. Pierre Fitzgibbon, Minister of the Economy and former member of the Board of Directors of the Caisse de depot, rather promotes André Bourbonnais, who lives in New York. At the helm for a few months of a BlackRock private equity fund…

Don't Fight The Tepper Tape?

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Mark DeCambre of MarketWatch reports the man who made a killing during financial crisis says that, at some point, the stock market will slow down — but, till then, ‘I love riding a horse that’s running’:
Perhaps, cribbing from the lyrics to the viral song “Old Town Road,” David Tepper is going to take his horse and ride till he can’t no more.

That is essentially the sentiment conveyed by the founder of hedge fund Appaloosa Management to CNBC on Friday.

Tepper told the network’s anchor Joe Kernen that he “has been long and will continue that way.”

The U.S. stock market has enjoyed a nearly uninterrupted assault on records, highlighted by the Dow Jones Industrial Average closing at a milestone above 29,000 for the first time and the S&P 500 achieving its own landmark close above the psychological round-number at 3,300, while investors in the Nasdaq Composite Index may have their sights trained on 10,000.

The ascent for stocks has made investors uneasy, primarily, because markets a…

CN Investment Division's Hunt For Talent?

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Sarah Rundell of Top 1000 Funds reports on how CN Investment Division is taking on tech in the hunt for talent:
Montreal-based CN Investment Division’s recent search for a quantitative analyst in its absolute return team is a timely reminder that pension funds must now align with the tech sector on compensation, culture and work environment to secure talent.

When Marlene Puffer, president and chief executive at the division which manages the $18 billion pension fund for Canadian National, Canada’s freight rail group, reached out to her network enquiring after candidates she was more conscious than ever that she was going head to head with the tech and start up sectors.

“They recruit for similar talent,” she said. “The financial sector is not as obvious a draw for a business school or STEM graduate as it used to be, but it should be. We need to explain the great opportunities in order to be able to attract and retain talent.”

Puffer, whose role spans everything from using her network to…

OMERS Set to Double Its PE Exposure by 2030

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Lina Saigol and Selin Bucak of Private Equity News report that OMERS is set to double its private equity exposure by 2030:
The head of buyouts at one of Canada’s largest pension plans says the amount of cash it plans to invest in private equity will double to around C$30bn in the next 10 years.

Mark Redman, global head of private equity at Ontario Municipal Employees Retirement System, says the pension plan expects total assets under management to increase from C$100bn to C$200bn by 2030, with 15% of that targeted at private equity.

Omers, like its larger Canadian peers, is under pressure to boost returns as plan beneficiaries live longer and because slow economic growth and low interest rates are a drag on fund performance. Many large North American pension funds are allocating higher amounts of capital to alternative investments, including private equity.

The Canada Pension Plan Investment Board has boosted buyout assets to C$93bn, up from 20.3% of the total fund in 2018 to 23.7% in …

BlackRock Flips Its Script on ESG?

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George Hay of Reuters reports that Larry Fink is slowly becoming part of climate solution:
Larry Fink seems to be listening to his critics. The BlackRock boss on Tuesday published his annual letter to CEOs of the companies the $7 trillion fund manager invests in. To a greater degree than in the past, tackling climate change is the priority.

Fink might argue that previous letters, which called for companies to help stakeholders as well as shareholders, were on a similar path. BlackRock is no stranger to applying environmental, social and governance criteria to its investment processes. But its public record on pushing companies to tackle global warming has been criticised by activists, who point out that its funds vote against most climate-related resolutions.

Fink’s letter flips the script in multiple ways. BlackRock now sees sustainable investing as the “strongest foundation” for client portfolios, rather than lowering potential investment returns. It also flags the dangers of financ…