The $16 Trillion Global Pension Crisis

Rich Miller of Bloomberg News reports that according to the G-30, a severe $15.8 trillion pension crisis looms worldwide:
The U.S., China and other leading economies confront a massive funding gap of $15.8 trillion in 2050 to ensure lifetime financial support for their aging populations.

That’s according to a report spearheaded by former U.K. Financial Services Authority Chairman Adair Turner for the prestigious Group of 30, comprised of current and former policy makers.

“If public policies and individual behaviors do not change, many countries’ pension systems will face a severe crisis, threatening either unaffordable public expenditure pressures or inadequate incomes for retirees,” Turner said in a statement.

The projected $15.8 trillion shortfall is adjusted for inflation so the actual nominal dollar amount in 2050 will be materially larger, equivalent to 23% of global gross domestic product that year, according to the 75-page report.

The G-30, which includes Bank of England Governo…

CPPIB's Climate Change Program?

Responsible Investor reports that CPPIB is launching a climate investment strategy:
The Canada Pension Plan Investment Board (CPPIB) plans to launch an investment strategy to cash in on opportunities arising from consumer trends triggered by climate change, it has revealed.

The C$400bn (€274bn) public pension fund, which is accountable to Canada’s Parliament and federal ministers but governed independently, said in its annual sustainability report that it was “preparing to launch a new climate change investment strategy”. It didn’t provide any details on size, but Deborah Orida, Senior Managing Director & Global Head of Active Equities, confirmed to RI that the capital would come from “growth of our department” rather than reallocation from existing strategies.

“The portfolio will be fundamentally driven and contain a diverse set of companies with tangible exposures to climate change,” the report explained, with Orida adding that themes would include disruptive sectors such as pr…

Michael Sabia Leaving The Caisse

The Canadian Press reports that Michael Sabia is leaving Caisse to head University of Toronto's Munk School:
The chief executive of the Caisse de depot et placement du Quebec is stepping down from the pension fund manager to become head of the Munk School of Global Affairs and Public Policy at the University of Toronto.

The Quebec fund manager says Michael Sabia, 66, is leaving at the beginning of February, a little more than a year earlier than expected.

"I know that I am leaving the Caisse and its people in a strong position to seize the many opportunities that lie ahead for them as I move on to my next challenge," Sabia said in a statement on Tuesday.

Sabia, who was not available for interviews, noted that leading the unique Quebec institution has been "the greatest privilege" of his career.

He has served as president and chief executive at the Caisse since March 2009. Before joining the investment fund, he was chief executive of BCE Inc.

In February 2017, hi…

Caisse Warns of Giant Risk in Private Debt

Paula Sambo of Bloomberg News reports that the Caisse sees giant risk growing in corner of the private-debt market:
Direct lenders and big banks are competing for the largest companies in the red-hot market for private credit, which is eroding underwriting standards, according to Canada’s second-biggest pension fund manager.

“The bigger, more solid companies are closer to having access to capital markets, so there’s a bit more erosion there because you have large direct lenders that are competing with each other,” along with the big banks to offer credit, said James McMullan, head of corporate credit for Caisse de Depot et Placement du Quebec, which has about $327 billion under management.

Like other asset managers, the pension fund is working to increase its exposure to higher-yielding private credit, but is doing so slowly as finding and screening companies is labour intensive, said McMullan. The Caisse currently holds around US$4 billion in the market, part of its US$41 billion cre…

PSP Investments' Strikes a Few Deals

IPE Real Assets reports that Aviva Investors and Public Sector Pension Investment Board (PSP Investments) just extended their partnership with an agreement to invest up to £250m in commercial property in eastern England:
The companies said the new venture will acquire a mix of ground-up and standing assets located in the CB1 Estate in Cambridge, a master-planned development covering 26 acres.

The acquired assets include 50/60 Station Road, a fully-let 167,000sqft development completed in April 2019 and 30 Station Road, a pre-let 81,500sqft scheme.

Construction commenced in September, with completion scheduled for the third quarter of 2021.

Aviva Investors will act as development manager and asset management partner, working alongside Brookgate as the developer.

Aviva Investors and Canadian pension investment manager PSP Investments in 2015 invested in a portfolio of commercial properties in central London, currently worth over £400m.

Daniel McHugh, managing director, real estate, Aviv…