Pension Pulse

Sean Conlon, Lee Ying Shan, and Alex Harring of CNBC report the S&P 500 falls Friday after Fed’s Warsh highlights inflation worries, but index posts positive week: The S&P 500 fell on Friday, but still notched a winning week, after Federal Reserve Chairman Kevin Warsh conveyed some worry over current inflation trends. The broad market index lost 0.25% and closed at 7,711.76, while the Nasdaq Composite slid 0.52% to 26,402.42, weighed down by losses in semiconductor stocks such as Nvidia and Intel . The Dow Jones Industrial Average was down 9.45 points, or 0.02%, and ended at 53,559.99. The S&P 500 advanced 0.5% on the week, while the Nasdaq gained 0.9%. The Dow climbed 0.5% in the period for its first winning week in three. In his remarks at the central bank’s annual symposium in Jackson Hole, Wyoming, Warsh said, “While this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved.” He also s...

Barbara Shecter of the National Post reports AIMCo assets top $200 billion as public equities drive gains: Alberta Investment Management Corp. surpassed $200 billion in assets under management with a 7.1 per cent net investment return in the first half of the year marked by conflict in the Middle East, U.S. trade policy uncertainty and evolving inflation expectations. The provincial Crown corporation that invests on behalf of pensions, endowments and government funds had $210.7 billion in assets under management as of June 30. Chief investment officer Justin Lord said the trade situation and other geopolitical and macroeconomic developments are front and centre for the globally invested fund, which has a strong presence in North America. About 40 per cent of AIMCo’s assets are invested in Canada. “A prolonged dispute, whether it’s in the Middle East (or) whether it’s trade-related, certainly could create headwinds for the Canadian economy, for the equity market,” he said...

Muskan Arora of Markets Group reports  Finland’s former pension chief says future cash flows, not markets, capped his risk appetite: Timo Löyttyniemi, the former chief executive officer spent more than two decades running Finland’s state pension fund, Valtion Eläkerahasto (State Pension Fund of Finland), and in his account, the biggest constraint on his strategy in the final stretch wasn’t markets at all — it was future negative cash flows. The government will pull an extra €1B out of the €25B fund next year, part of a broader pattern of tapping VER to help cover rising pension costs from an aging population. Löyttyniemi, who retired in February, said the fund ran extensive return simulations in response but left the harder structural decisions to his successor. “These extra outflows to the government made us postpone the plans somewhat during my time. But, of course, it’s now up to the new management to consider what the risk and sufficient and comfortable risk lev...

James Bradshaw of the Globe and Mail reports pension funds overhaul board of fintech FNZ amid $4.6-billion lawsuit:  Major shareholders in London-based FNZ Group, including Canadian pension funds, overhauled the board of the financial software provider as they look to stabilize the company’s finances and fend off an ongoing shareholder lawsuit seeking US$4.6-billion. FNZ provides a digital wealth management platform used by some 650 financial institutions, including North American clients such as Bank of Montreal. Two of Canada’s largest pension funds own significant stakes in the company. The Caisse de dépôt et placement du Québec, the Montreal-based pension fund that manages $552-billion, is FNZ’s largest shareholder and invested early in the startup in 2018. The Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund with $864-billion of assets, invested US$1.1-billion in FNZ in 2022. Since then, the company, which was founded in 2003 in ...

Davis Giangiulio of CNBC reports Ken Griffin says Citadel unwound more than 80% of risk tied to Situational Awareness portfolio: Ken Griffin of Citadel in a letter to clients on Friday addressed for the first time the firm’s purchase of assets from Leopold Aschenbrenner’s Situational Awareness hedge fund.  According to a letter obtained by CNBC’s Sara Eisen, Griffin told clients that Citadel has unwound more than 80% of the aggregate risk from the original portfolio purchased by conducting more than 100 block trades over $4 billion in market value. Griffin detailed in the letter that Citadel entered discussions with Situational Awareness to acquire some of the fund’s holdings on July 29. One day later, CNBC’s David Faber reported that Situational Awareness was forced to sell all of its public stock positions after facing steep losses. Citadel was later revealed as the buyer of the assets. “A transaction of this magnitude could not have been completed without the extra...