Pension Pulse

Last week, IMCO CEO Bert Clark wrote a comment on LinkedIn on why it's time  to look beyond some common measures of investment performance: Many Canadian pension funds report annually on their net value add (NVA) — the extent to which their returns exceed chosen benchmarks, net of management fees and operating expenses. Sector observers sometimes treat this figure as a proxy for overall investment performance. In recent years, many pensions have had to explain their negative NVA, particularly those with private assets that have tended to underperform public markets. In doing so, some pointed instead to their smoother long-term investment results as better indicators of overall investment performance. But both NVA and return volatility are imperfect measures of investment success. NVA is hard to measure, typically quite small, and does not directly reflect pension objecti...

Chris Tolomia of Quartz reports  Norway sovereign wealth fund posts record $184B profit, discloses SpaceX stake: Norway's Government Pension Fund Global posted a first-half profit of more than 1.75 trillion Norwegian kroner, or roughly $184.9 billion, a record for a six-month period, as equity markets — particularly in Asia — surged in the second quarter. The fund also disclosed a stake in SpaceX, according to CNBC .  The fund returned 9.4% in the first half, outperforming its benchmark index by 0.22 percentage points. Its total value stood at 22,683 billion kroner, or around $2.34 trillion, at the end of June. Equities, which make up 72.1% of the portfolio, returned 13% over the period, with the technology sector — up 25.3% — and telecommunications sector — up 42.9% — contributing the most. Consumer discretionary was the weakest sector, falling 4%. "The result is driven by good returns in the equity market, particularly from Asian technology stocks," Norg...

 Layan Odeh of Bloomberg reports  Canada’s top pension earns 7.5% in its best quarter in over a decade: Canada Pension Plan Investment Board earned 7.5% in its first fiscal quarter, fueling its best performance since 2015 with investments in stocks and energy.  Net assets rose to C$863.6 billion ($622.5 billion) in the period ended June 30, up about 9% from the previous quarter. “Our investment portfolio remains well positioned to benefit from favorable public equity market performance, with meaningful contributions across our globally diversified portfolio,”  Chief Executive Officer John Graham said in a statement Friday. Public equity holdings were buoyed by AI-related sectors and “resilient” corporate earnings. Investments in real assets — particularly energy — as well as a stronger US dollar further boosted returns, according to the statement.  Canada’s largest pension plan made 14 credit investments during the quarter, the largest being $1 billion in Bla...

Mathieu Dion of Bloomberg reports  La Caisse posts 5% first-half return as stocks rally, private equity slumps: Caisse de Depot et Placement du Quebec, Canada’s second-largest pension manager, fell short of its benchmark in the first half of the year as losses on private equity holdings pulled down the overall return.  Net assets rose to $552 billion for the Montreal-based firm, which handles pension money and other capital on behalf of the Quebec government. Its average return was 5.1 per cent over the past six months, below the 7.5 per cent for its tracking index, in an environment marked by geopolitical tension in the Middle East and enthusiasm for artificial intelligence investments. Over a 10-year period, La Caisse has returned 7.5 per cent a year, nearly matching its benchmark. Chief executive Charles Emond said the conflict in Iran, its impact on inflation and interest rates, and the sustainability of the AI investment cycle are sources of uncertainty for the s...