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Showing posts from April, 2018

BlackRock Beefs Up its PE Group?

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Trevor Hunnicutt of Reuters reports, BlackRock hires private equity specialists from Goldman Sachs:
BlackRock Inc said on Monday it is hiring two specialists from Goldman Sachs Group Inc to bolster its private equity business in New York, according to a staff memo.

Steve Lessar and Konnin Tam will join the world’s largest asset management company from Goldman Sachs this summer, according to the document, which was seen by Reuters.

Each will be responsible for expanding BlackRock’s role within a business that effectively enables investors in private companies and funds that invest in such firms to resell their stakes to other institutions. Normally, that money is locked up for years.

This market for “secondary” private capital saw a record $58 billion in transaction activity in 2017, according to investment bank Greenhill & Co Inc, with money chasing better returns than exist within public markets.

“Our plan is to place Steve and Konnin at the core of a team that will expand our exis…

End of Days For Markets?

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Tae Kim of CNBC reports, Amazon hits all-time high as Wall Street gushes over Prime price hike, new markets:
Wall Street is buzzing over Amazon's impressive March quarter results.

Analysts are growing more confident over the prospects for many of Amazon's new businesses including subscription services, advertising and cloud computing.

The e-commerce juggernaut reported better-than-expected first-quarter earnings results Thursday. It also gave profit guidance for its second quarter significantly above Wall Street expectations.

Amazon shares soared as much as 7.9 percent in early trading Friday, briefly surpassing its all-time high of $1,617.54.

Goldman Sachs reiterated its buy rating, saying Amazon is still in the "early stages" in many of its key markets.

"We are in the sweet spot between Amazon investment cycles where new fulfillment/data centers are driving accelerating revenue growth while incremental capacity utilization is driving margin expansion," an…

OMERS Sells Stake to VINCI Airports?

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Benefits Canada reports, OMERS sells stake in international airport portfolio:
The infrastructure arm of the Ontario Municipal Employees Retirement System has entered an agreement to sell its stake in Airports Worldwide Inc., a portfolio of airport assets and management contracts.

“OMERS first invested in AWW in 2009,” said Ralph Berg, executive vice-president and global head of infrastructure for OMERS Private Markets, in a press release.

“We have focused our efforts since that time on positioning the asset for long-term success and are very proud of the value we have created with this investment for OMERS members.”

OMERS, which expects the transaction to close later in 2018, didn’t disclose the financial details of the sale.

“OMERS has worked closely with the management teams across the group to grow the portfolio, optimize performance and build strong relationships with airline partners and other stakeholders,” said Juan Camargo, director of OMERS Infrastructure, in a press release.

Are Vestcor's Benchmarks a 'Joke'?

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Robert Jones of CBC News reports, Exaggerated success: Province's pension managers profit from 'joke' target, analysts say:
A key measurement used to calculate bonuses for executives of the firm managing New Brunswick government employee pension funds produces exaggerated rewards and needs to be reviewed, say two pension analysts asked to look at the issue by CBC News.

"That benchmark is a joke and you can quote me on that," said Leo Kolivakis about the yardstick used by New Brunswick's Vestcor Investment Management Corporation to judge its managers' achievements handling what are called "absolute return" funds.

The absolute return investments have been generating modest gains for pensioners served by Vestcor but producing major bonuses for its pension executives, including an estimated $600,000 in bonus pay in 2016.

That's primarily because returns managers have to beat to win extra pay from its absolute return portfolio are set at less than…

CAAT Pension Gains 15.8% in 2017

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At the end of March, I discussed how the Colleges of Applied Arts and Technology (CAAT) pension plan’s funded status reached 118%, the second largest funded position right behind the Healthcare of Ontario Pension Plan (HOOPP) which has a funded status of 122%.

At the time, CAAT's 2017 Annual Report wasn't available but it came out yesterday and it is available here. Take the time to read it, it's excellent, well written, concise and very transparent.

I have already covered CAAT's funded success and the success of the Plan is derived from the factors below (click to enlarge):


In this brief comment, I want to focus on CAAT Pension Plan's investment success. The CAAT Pension Plan’s assets reached $10.8 billion at December 31, 2017, compared with $9.4 billion at the end of 2016.

The Fund returned 15.8% net of investment management fees in 2017, outperforming its policy benchmark by 3.5% (click on image):


The Plan has experienced steady growth in assets over the last te…

OPTrust's Innovative New Pension Initiative?

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Martha Porado of Benefits Canada reports, OPTrust launching new defined benefit pension plan:
The OPSEU Pension Trust is launching a new defined benefit plan for employers in the broader public sector, charitable and not-for-profit industries.

OPTrust Select will target employers that currently don’t have a defined benefit plan but may provide a capital accumulation program. With employers and employees contributing three per cent each, the plan will provide for an annual pension accrual rate of 0.6 per cent of earnings. Earnings upgrades and cost-of-living increases will be dependent on the plan’s funded status and annual board approval.

“We believe that there is a retirement income crisis in Canada and it is growing,” says Hugh O’Reilly, president and chief executive officer of OPTrust. “What we have and what our members have, we want others to have.”

For the first two years of the plan, employers will also have to contribute an additional 0.2 per cent. “If an employer were to become …