Pension Pulse

Leo de Bever, former CEO of AIMCo, sent me a short comment on why he feels the Maple 8 should invest more wisely at home: The Canadian Maple 8 argues that investing more in at-home is unwarranted because it conflicts with ‘prudent’ geographic risk diversification. It implicitly assumes that all Canadian assets are highly correlated and that no domestic investments could improve on the current asset mix. The real reason is simpler. I used to invest in faraway places and rarely got a reaction. When you invest at home, everyone has an opinion, and boards and portfolio managers become worried about personal returns on risk. The economic models we used when I was at the Bank of Canada in the 1970s assumed that the bulk of domestic savings went into domestic investment, thereby building a stronger economy. Much greater capital mobility has made that less of a given. Inadvertently, the Maple 8 (with rare exceptions) exports capital and imports innovation . I have found tha...

Dale Burgess, Executive Managing Director, Equities at OTPP sat down with PEI Group's Chris Witkowsky and David Nowak, president of Brookfield for the second episode of PEI Group's new Commitment Issues podcast miniseries to discuss whether private equity's best days are behind it: Have expectations for private equity changed? What’s the role of the asset class in the portfolio these days? These are the questions that Dale Burgess, executive managing director for equities at Ontario Teachers' Pension Plan, and David Nowak, president of private equity firm Brookfield, tackle in the second episode of PEI Group's new Commitment Issues podcast miniseries. As the industry works through a backlog of unrealised assets, questions have arisen about performance, asset valuations and firms’ ability to acquire and sell companies in the time frame LPs have come to expect. For instance, average investment hold periods in private equity have now risen to around seven ye...

James Bradshaw of the Globe and Mail reports  AIMCo earned 7.5 per cent return last year as stocks propped up private assets: Alberta Investment Management Corp. aims to take advantage of pressure in private credit and infrastructure, positioning itself as a buyer when some fund managers sell off assets to raise cash. The Alberta-based pension fund manager made a 7.5-per-cent return last year as stocks did well and private assets struggled, according to a news release. The diverging performance of public and private markets was a key reason why AIMCo fell short of its internal benchmark by 2.7 percentage points. More than a third of its assets are private, but those portfolios are generally measured against stock indexes that surged in value last year. AIMCo’s balanced fund – which reflects a typical mix of assets held by its 17 core clients – earned 7.6 per cent in the year that ended Dec. 31, and missed its benchmark by the same margin. The balanced fund has an avera...

Kyle Duggan of The Canadian Press  reports  Canadian banks, pension funds have poured billions into ICE contractors: Major Canadian banks and pension funds provided tens of billions of dollars to American contractors for the U.S. Immigration and Customs Enforcement agency, an investigation by the non-profit Stand.earth has found. The group’s analysis of loan and share data found Canadian financial institutions backed multiple companies that have major contracts with ICE to provide equipment or services, through investments, loans and bonds totalling about US$35 billion. The companies that benefited from those Canadian investments include: data analytics firm Palantir; major U.S. defence contractors General Dynamics and L3Harris; the IT firm CACI; and telecom giant AT&T. CoreCivic and Geo Group, which construct and manage detention centres, also benefited to a lesser extent. Palantir, founded by major Republican donor Peter Thiel, supplies technology to ICE th...