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Showing posts from April, 2020

How Is IMCO Weathering the Pandemic?

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Barbara Shecter of the National Post reports on how IMCO is weathering the pandemic:
Having kids or undertaking a home renovation has a lot in common with setting up a multi-client investment manager, according to Bert Clark, who has done at least two of the things on that list.

“You underestimate the amount of work,” the chief executive of Investment Management Corp. of Ontario (IMCO), and a father of four kids under the age of 10, said during a recent interview.

That assessment of the three-plus years he has spent building IMCO — which manages $70.3-billion worth of assets for the pensions of Ontario judges and government employees as well as the Workplace Safety and Insurance Board (WSIB), making it one of the country’s top 10 pension managers — also now applies to responding to the global coronavirus pandemic that has shut down economies and ground business-as-usual to a halt.

“Anyone who says ‘I know what you do in this scenario’ is making it up,” Clark said, pointing to a never…

AIMCo to Conduct Review of Volatility Blowup

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Barbara Shecter of the National Post reports that AIMCo will conduct a review of the volatility strategy linked to a reported $3 billion loss:
The Alberta Investment Management Corporation is conducting a review of a volatility-based investment program, which news reports indicate cost the pension manager $3-billion amid market upheavals triggered by the coronavirus pandemic.

Jerrica Goodwin, spokesperson for the Treasury Board and Finance Alberta, told the Financial Post on Thursday that AIMCo will be doing a review and providing updates to the minister.

The “volatility-based investment program” isn’t a recent strategy and “began well before the current UPC government,” Goodwin told the Post, noting that the pension manager operates independently and at arm’s-length from government.

“We are facing unprecedented times and these are challenging market conditions for all investors,” she said. “It’s anticipated that all institutional investors will have some tough quarters due to the econo…

IMCO's Experts Share Their Insights

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IMCO has started a new section on its website providing some very valuable insights on the economy and asset class strategies.

IMCO Insights feature in-depth interviews with their experts and I think it's worth going over them.

First, Tanya Lai, IMCO’s Managing Director of Public Equities, discusses how IMCO is building its public equity portfolio and keeping a long-term perspective during this unprecedented time: How do you navigate an environment like this one, with the coronavirus pandemic causing daily significant swings in major global equity markets?

With any market dislocation, we have to view it as an opportunity. If you look at it only from the risk and loss perspective, you miss the opportunity to capitalize on what’s happening.

So, for example, we examine whether the selloffs mean we should be rotating out of certain sectors and into others. We are also looking to see if we should slow the implementation of some of our strategies because doing so might allow us to ho…

Private Equity's Minsky Moment?

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Luis Garcia of private Equity News reports that indexes show private equity valuations suffering more than venture capital’s:
Private markets investors face a major challenge these days: How to evaluate the impact of coronavirus-driven economic disruptions on their holdings.

A pair of indexes suggest that private equity portfolios may be suffering more than those held by venture capital firms.

The Thomson Reuters Private Equity Buyout Index, which tracks the performance of private equity funds, as of Thursday had lost 24% so far this year.

By comparison, the Thomson Reuters Venture Capital Index had dropped 4.1% in the same period. The latter index serves as a proxy for venture capital fund returns.

“The indices are designed to provide an indication of what the general valuation change is for the private equity or venture capital space,” said Arthur Bushonville, co-founder and chief executive of DSC Quantitative Group, a Chicago-based investment firm that helped develop the indexes. &q…

Will Neiman Marcus Sting CPPIB and OMERS?

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Lauren Hirsch of CNBC reports Neiman Marcus eyes Sunday bankruptcy filing, $600 million emergency funding:
Neiman Marcus could file for bankruptcy as soon as Sunday and is in talks with its current lenders about raising roughly $600 million in emergency financing to fund operations through the restructuring, people familiar with the situation tell CNBC.

In bankruptcy, the retailer will work to flush its more than $4 billion of debt leftover from its sale to Ares Management and the Canada Pension Plan Investment Board in 2013. Even before the coronavirus pandemic struck, that debt acted as an albatross, limiting its ability to invest in technology as new competitors like Yoox’s Net-A-Porter encroached on its once untouchable position in luxury retail.

Neiman Marcus is hoping its status as a luxury brand will help it emerge from the crisis a leaner and stronger company. The department store chain also owns high-end Bergdorf Goodman in New York’s midtown.

It does not plan to close …