Pension Pulse

Mark Johnson wrote a comment for the Hub stating Canada’s public pension funds may be a global success story, but political storm clouds are gathering: They are the demigods of our corporate world. They manage over $2 trillion of our retirement money, with investments and influence that span the globe. But they’re starting to attract political attention. And with that comes debate. Bestriding our financial community, the eight largest public pension funds in Canada are known by the adulatory nickname “the Maple Eight.” Among them are AIMCo, BCI, CPP Investment Board, OMERS, and PSP. These pension funds are touted as shining examples of well-run and high-performing pension funds and are often held up as models for other countries. Recently, the U.K.’s chancellor of the exchequer made a special trip to Toronto to study the Canadian model of pension governance and pitch them on more investment in her homeland. Known for the “Canadian Model” of fund gove...

James Bradshaw of the Globe and Mail reports Oxford Properties sells 50% stake in $1.2-billion European warehouse portfolio to AustralianSuper: Oxford Properties Group is selling a 50-per-cent stake in a $1.2-billion portfolio of European warehouses to AustralianSuper, forming a joint venture with Australia’s largest pension fund manager to help ramp up its exposure to logistics and industrial properties. In addition to buying half of Oxford’s warehouse assets, AustralianSuper will become a co-owner of M7 Real Estate, a European investment manager focused on the logistics sector that Oxford acquired in 2021. Oxford Properties is the real estate arm of the Ontario Municipal Employees Retirement System (OMERS), the $134-billion pension fund manager that invests on behalf of more than 600,000 members who have worked for municipalities, school boards, transit systems and electrical utilities, among other employers. The largest allocation of Oxford’s investments – roughly a th...

Josh Saul and Emma Sanchez of Bloomberg report that KKR and PSP to buy AEP Transmission stake for $2.8 billion (all figures in US dollars): American Electric Power Co. agreed to sell a minority stake in its transmission business to KKR & Co. and Canada’s PSP Investments for $2.8 billion.  The investment firms will acquire a roughly 20% interest in AEP’s Ohio, Indiana and Michigan transmission companies, the companies said in a statement Thursday. KKR and PSP, which formed a 50-50 partnership for the acquisition, are investing in transmission as electricity use in the US is expected to surge, thanks to data centers and artificial intelligence.  “Areas such as Ohio and Indiana are experiencing growth that has not been seen for decades,” AEP Chief Executive Officer Bill Fehrman said in the company’s own statement. AEP’s transmission system has 40,000 miles (64,000 kilometers) of wires and is the largest in the US, according to its website.  AEP will use the pr...

Freschia Gonzalez of Wealth Professional reports that CPP Investments to exit Calpine stake, expects US$2.6bn in proceeds: CPP Investments has announced the sale of its entire 15.75 percent stake in US power producer Calpine Corporation (Calpine) to Constellation Energy (Constellation). The sale forms part of Constellation's acquisition of Calpine. The transaction is expected to generate approximately US$700m in cash and US$1.9bn in Constellation stock for CPP Investments. The investment in Calpine was made in 2018 through a co-investment with Energy Capital Partners (ECP) and Access Industries. Bill Rogers, managing director and head of Sustainable Energies at CPP Investments, expressed satisfaction with the outcome, stating, “We are pleased by the success of our investment in Calpine and view this transaction as an ...

Bert Clark, President and CEO of Investment Management Corporation of Ontario, wrote a comment for the Financial Post over the holidays stating the S&P 500’s performance in 2024 made investing look easy, so why bother with strategy: The S&P 500 has been on something of a tear. Total returns so far this year (as of Dec. 23), have been 26 per cent. That’s on top of total returns of 26 per cent in 2023. This is the kind of investment performance that can make some investors wonder whether Warren Buffet was right when he suggested that, for most people, the best thing to do is own the S&P 500 index. Whether this is the right investment strategy for an investor is something they would need to decide. This is in no way meant to challenge Buffet’s investment perspective. Or, for that matter, to suggest an alternative strategy for individual investors. But recency bias can be powerful. So, with the S&P 500 up as much as it has been over the past few years, it is a good...