AIMCo Appoints Evan Siddall as its Next CEO
Geoffrey Morgan of the Financial Post also reports AIMCo picks former CMHC CEO Evan Siddall as leadership overhaul continues:
Former Canada Mortgage and Housing Corporation Chief Executive Officer Evan Siddall has been named the next chief executive officer of Alberta’s largest pension fund manager.
In a release Thursday, the Alberta Investment Management Corporation (AIMCo) announced Siddall will become CEO effective July 1, 2021; he will succeed Kevin Uebelein, who has held the position for six years.
In the release, AIMCo Chair Mark Wiseman praised Siddall’s deep knowledge of the financial services industry and said his experience running the nation’s housing watchdog should serve him well in the new role.
“Evan is an executive who is ready to drive the organization forward with an exceptional focus on clients, commitment to collaboration, and deep knowledge of financial services. The board and I look forward to working in partnership with him in this exciting new chapter for AIMCo,” Wiseman said.
Siddall retired from his role at CMHC earlier this month after helming the organization since the beginning of 2014. During that tenure, he frequently championed the mortgage stress test implemented by the federal government and other measures to help bolster housing-market stability, while also drawing criticism for predicting the COVID-19 pandemic would cause home prices to fall by as much as 18 per cent.
Siddall takes on the new role in the wake of a difficult year for the pension fund manager. AIMCo posted a total fund return of 2.5 per cent net of fees in 2020, falling short of meeting its benchmark expectations. AIMCo manages $118.6 billion on behalf of several provincial government funds and the pension funds of more than 300,000 Alberta public sector employees.
AIMCo has posted a 7.7 per cent annualized return over the last 10 years.
The fund suffered steep losses during the heightened volatility during the early days of the pandemic, announcing last spring it lost $2.1 billion on a volatility-related strategy. AIMCo launched a formal investigation into the losses to identify improvements that could be made to the fund’s risk-management framework.
Evan Siddall, the former head of the Canada Mortgage and Housing Corp., will take over as president and chief executive officer of Alberta Investment Management Corp. as the leadership overhaul of the province’s public pension fund manager continues.
“I am delighted to join Alberta Investment Management Corporation as chief executive officer and further strengthen the organization’s commitment to its clients across all aspects of its business,” Siddall said in a release Thursday.
AIMCo manages the province’s $118.6-billion public sector pension fund.
Siddall will take over the helm on July 1 from outgoing CEO Kevin Uebelein, who has led AIMCo since 2015. Uebelein’s retirement from the pension manager was accelerated by a few months after AIMCo recorded major losses from a volatility-trading program last year.
Since those losses were disclosed, Edmonton-based AIMCo has gone through a leadership overhaul including the appointment of a new board chair in Mark Wiseman, a former BlackRock Inc. executive and former CEO of the Canada Pension Plan Investment Board.
AIMCo lost $2.1 billion last year on its VOLTS program, which traded market volatility. When markets crashed in the wake of the COVID-19 pandemic, AIMCo’s volatility trades suffered huge losses and the pension manager ended the program and launched a review.
The results of that review were sent to AIMCo’s board on June 30, 2020 and showed the organization’s risk management controls were “unsatisfactory.” Among its 10 recommendations on how to improve the public pension fund manager, the report said that a culture change was needed.
Siddall takes the reins at AIMCo as the organization continues to implement those recommendations.
“Evan is an executive who is ready to drive the organization forward with an exceptional focus on clients, commitment to collaboration and deep knowledge of financial services,” Mark Wiseman, AIMCo chairperson, said in a release.
AIMCo reported Thursday that it earned a total return of 2.5 per cent last year, but that return is 5.4 per cent below its benchmark for 2020. The release did not describe how much of that underperformance could be attributed to VOLTS, but noted detailed information on the performance would be published in an annual report in June.
Born in Toronto, Siddall has a law degree from the Osgoode Hall Law School, York University and a BA in Management Economics from the University of Guelph in 1987. Before joining the CMHC, he worked as a special advisor to the governor of the Bank of Canada and as an investment banker, with Goldman Sachs & Co. and BMO Nesbitt Burns, among others.
Siddall was president and CEO of the CMHC until earlier this year and often posted warnings about potential corrections in the Canadian housing market on his Twitter account.
AIMCo is under increasing scrutiny in the province as the provincial government has been discussing withdrawing Alberta’s contributions to the Canada Pension Plan and handing the management of those investments over to AIMCo.
In addition, the Alberta Teachers Retirement Fund board has been working to transfer the management of its assets to AIMCo, despite the objections of some teachers unions.
And Tara Deschamps of The Canadian Press reports AIMCo names former CMHC head Evan Siddall as next chief executive:
Alberta Investment Management Corp. has named the former — and often outspoken — head of Canada Mortgage and Housing Corp. as its next chief executive.
The investment manager said Thursday that Evan Siddall will officially start in its top job on July 1.
He will succeed Kevin Uebelein, who has been AIMCo’s chief executive since Jan. 1, 2015, and will depart on June 30.
“Evan is a veteran of the financial services industry and a well-regarded executive with the skill, presence and acumen to lead AIMCo,” Uebelein said in a release announcing his successor.
“I have every confidence that Evan will lead AIMCo to even greater heights for the benefit of its clients and for all Albertans.”
In his new role, Siddall will be responsible for more than $118 billion in assets under management and investing on behalf of 31 pension, endowment and government funds in Alberta.
He will also have to restore confidence in AIMCo, after it revealed last year that it lost $2.1 billion or one-sixth of the investment returns it made in 2019 on a single public equity strategy called VOLTS — Volatility Trading Strategy.
AIMCo’s board said it was moving quickly to reduce damage from the strategy and confirmed that no other investment strategies could generate substantial losses in very unusual circumstance, but called in accounting firm KPMG to conduct an independent review.
An audit later found AIMCo’s risk management systems to be at fault and a board report said, “The breadth and depth of risk governance controls, collaboration and risk culture, while evolving and improving over the past 2-3 years, are still unsatisfactory.”
While AIMCo was dealing with the situation, Canada was plunging further into a pandemic, putting pressure on the country’s housing sector and plenty of eyes on Siddall.
He stepped down as CEO of CMHC earlier this month after serving at the federal housing agency since 2014. He was replaced by Romy Bowers, a former managing director at the Bank of Montreal.
Before joining the national housing agency, Siddall was a special adviser to the governor of the Bank of Canada.
He spent 20 years with investment banking firms in Toronto and New York and two as a senior executive with Irving Oil Limited.
At CMHC, Siddall had a reputation for being outspoken.
He triggered criticism from Realtors and their associations when he urged the industry to “call out the glorification of home ownership for the regressive canard that it is“ early in his time in the role.
Realtors were quick to push back and shared surveys that proved the majority of millennials or future homebuyers were keen to own homes.
When the COVID-19 pandemic hit towards the end of his tenure, Siddall attracted attention again for forecasting the fall of housing prices and the rise of mortgage arrears.
Neither materialized and he eventually took to Twitter to acknowledge his critics.
“We never pretended to have (a) crystal ball. Nor are we all-knowing on housing,“ he wrote. “We meant to contribute to a discourse, even though it was hard to be precise about future. In hindsight, we could have made that clearer.”
On Thursday, Siddall appeared to be excited about his new job.
“I am delighted to join Alberta Investment Management Corporation as chief executive officer and to further strengthen the organization’s commitment to its clients across all aspects of its business,” Siddall said in a release.
“I am looking forward to working with AIMCo’s talented team of professionals in delivering consistently superior investment performance on behalf of our clients.”
AIMCo released a statement this afternoon confirming the nomination and providing a performance update:
The Board of Directors of Alberta Investment Management Corporation (AIMCo) is pleased to announce the appointment of Mr. Evan Siddall as Chief Executive Officer. Mr. Siddall will assume his responsibilities on July 1, 2021, and will succeed Kevin Uebelein, who has served in the capacity of CEO since January 1, 2015.
Also released today are AIMCo’s financial results for the year ended December 31, 2020. On behalf of its 31 Alberta-based pension, endowment and government fund clients, AIMCo earned a total fund return of 2.5% net of all fees, representing approximately $3.0 billion in net investment income, with assets under management reaching $118.6 billion. The annualized total fund returns over four and ten years are 6.1% and 7.7%, respectively.
Chief Executive Officer Appointment
Evan Siddall most recently served as President & Chief Executive Officer of the Canada Mortgage and Housing Corporation (CMHC), a position he has held since January 1, 2014. Under Mr. Siddall’s leadership, CMHC transformed itself into a client-centered, innovative, impactful organization.
Mr. Siddall served as Special Advisor to the Governor of the Bank of Canada before joining CMHC. His experience also includes 20 years with investment banking firms in Toronto and New York and two years as a senior executive with Irving Oil Limited.
Mr. Siddall has a B.A. in Management Economics from the University of Guelph, a law degree from Osgoode Hall Law School and has completed Harvard Business School’s Presidents Program in Leadership.
“Evan is an executive who is ready to drive the organization forward with an exceptional focus on clients, commitment to collaboration, and deep knowledge of financial services. The Board and I look forward to working in partnership with him in this exciting new chapter for AIMCo.” said Mark Wiseman, Chair, AIMCo Board of Directors.
“On behalf of the Board of Directors, I want to express our gratitude to Kevin Uebelein for his unwavering commitment to AIMCo during the past six years. The organization is well-positioned as one of Canada’s most accomplished institutional investors,” added Wiseman. “Kevin’s passion for AIMCo is undeniable and he has built a legacy of which all Albertans can be proud.” Kevin remains the CEO of AIMCo until June 30, 2021 and will then support transition initiatives.
“I am delighted to join Alberta Investment Management Corporation as Chief Executive Officer and to further strengthen the organization’s commitment to its clients across all aspects of its business. I am looking forward to working with AIMCo’s talented team of professionals in delivering consistently superior investment performance on behalf of our clients,” says Evan Siddall, incoming Chief Executive Officer.
“The Board has made an excellent choice in selecting Evan Siddall as the new Chief Executive Officer of AIMCo,” added Kevin Uebelein, Chief Executive Officer. “Evan is a veteran of the financial services industry and a well-regarded executive with the skill, presence and acumen to lead AIMCo. Albertans have a strong, independent public asset manager in AIMCo – an organization that is purpose-built to serve the investment management needs of a diverse group of Alberta public sector clients. I have every confidence that Evan will lead AIMCo to even greater heights for the benefit of its clients and for all Albertans.”
2020 Investment Performance Results
Despite the global economic impact of COVID-19, AIMCo earn a total fund return of 2.5% net of all fees, on behalf of its clients. Since inception, AIMCo has earned more than $70 billion in net investment income on behalf of its clients, contributing to the well-funded status of Alberta’s public sector pension plans and generating significant income for the Alberta Heritage Savings Trust Fund, the proceeds of which have benefited all Albertans.
“AIMCo is a long-term investor, in alignment with the objectives of our clients, and accordingly our performance is gauged by investment returns measured in decades, not years. Nevertheless, a year like 2020, where so many asset classes declined in near unison, erasing the typical benefits of well-diversified portfolios, is extremely humbling,” said Kevin Uebelein, Chief Executive Officer. “AIMCo has demonstrated complete transparency regarding investment performance in 2020. We undertook a comprehensive review of risk management and believe we are well-positioned going forward.”
In terms of asset class performance, public market investments continued to gain strength following the challenges of the first quarter in 2020. A broadening of the market rally favoured AIMCo’s approach in public equities, while Fixed Income also continued on the path of recovery, with steadily improving absolute returns and relative returns as well. Private Equity investments outperformed overall, while Infrastructure fared less well. Re-positioning the Real Estate portfolio toward industrial and logistics, should drive strong performance in the future, though office and retail were challenged in 2020 as a result of extensive COVID-related measures. Overall, for the one-year period ending December 31, 2020, AIMCo’s total fund return is 5.4% below that of its benchmark.
Detailed performance information will be available in AIMCo’s Annual Report to be released in June 2021.
Let me begin by congratulating Evan Siddall for being appointed AIMCo's next CEO.
Late today, I had a chance to talk to AIMCo's Chair, Mark Wiseman, to discuss the appointment of Evan Siddall and the performance update.
I actually began by telling Mark I was shocked he wasn't appointed the next CEO and told him I was convinced it would be him (or André Bourbonnais but doubted he wanted to move to Edmonton).
Mark told me he sat on the committee which overlooked the search for the next CEO and added: "I can assure you I wasn't part of the list."
He said there was a global search done and they identified 150 candidates, trimmed it down to nine, then six and finally they "unanimously chose Evan for all the right reasons."
What were those reasons? As Mark explained, Evan had experience as a CEO at a multifaceted organization and critically, he understands these key areas:
- Stakeholder relations
- Management complexity
- How to build and manage a team
When I mentioned to him that some are surprised as he never worked at a pension before, Mark was honest stating: "Like everyone else, he has areas of strength and areas of weakness and he'll work on those areas where he needs some help" (he has a great board and solid team to lean on).
I told Mark after I left PSP Investments, I worked a couple of years at the Business Development Bank of Canada (BDC) in the thick of the crisis (2008-2010) and many people don't realize there are other huge Crown corporations in Canada with a lot longer history than PSP and CPPIB (EDC, BDC and CMHC and many others).
All this to say, being CEO of CMHC is tremendous experience and that organization is solid (it became a lot better under his watch as he was a lot more conscious of risk).
Another thing I told Mark is only The Canadian Press article referred to the fact that before joining the CMHC, Evan Siddall was a special adviser to the governor of the Bank of Canada and he also spent 20 years with investment banking firms in Toronto and New York and two as a senior executive with Irving Oil Limited (my bad as Geoff Morgan of the FP did mention his experience at the Bank of Canada and at investment banks).
Like Mark Wiseman, he has a law degree and he seems excited to join AIMCo.
Mark told me: "He should be excited. These are coveted jobs, having worked as a CEO at CPP Investments, I can tell you it's a great job."
What else? I found it classy that outgoing CEO Kevin Uebelein praised Mr. Siddall and he will work with him on the transition starting July 1st.
Mark told me: "Kevin is classy, he came from the US, fell in love with the province and country and will help Evan during the transition."
He also told me that Kevin will remain active after he leaves AIMCo and is already contemplating to sit on some boards.
All I said is that it's a shame the press is so fixated on VOLTS and the $2.1 billion loss because there's a lot more to AIMCo under Kevin Uebelein than a volatility strategy gone bad.
Anyway, it's done, time to turn the page and as you can read in the press release, despite the global economic impact of COVID-19, AIMCo earned a total fund return of 2.5% net of all fees, on behalf of its clients in 2020.
So, Mr. Sidall is inheriting a solid shop, one he will build on and transform but it's still a very solid pension fund with a great reputation.
What else? I kind of like the fact that Evan Siddall was "outspoken" as the leader of the CMHC and pretty much agreed with his views on the housing market and the insane leverage Canadian homeowners are taking to buy their homes (my words, not his).
Today we learned that Canada's red-hot housing market continues to defy expectations, with sales in March up 70 per cent compared to a year ago and average prices up by more than 30 per cent.
The pandemic and the ensuing monetary and fiscal policies have unleashed an epic housing frenzy in Canada and the United States unlike anything we have ever seen before.
I still believe it will end very badly but a buddy of mine keeps harping on the lack of supply as the chief culprit, not the insane mortgage debt people are taking to buy their home (it's both, limited supply because of dumb regulations that deter homebuilders and huge demand as people move out of city to the suburbs but I foresee them coming back to the city once vaccinated).
Where am I going with this? Oh yes, I like the fact Evan Siddall is "outspoken," it shows me he's got true grit and I hope he will remain that way throughout his tenure at AIMCo (don't be scared of stating what's on your mind and don't pussyfoot around topics no matter how difficult they are).
Alright, let me wrap it up and take the time to thank the panelists that were on this afternoon's panel discussion on private markets which I moderated virtually for the 2021 Toronto CFA Society Spring Pension Conference. I thank OTPP'S Tanya Carmichael, IMCO's Andrew Garrett and M&G's Anish Majmudar for a truly stimulating panel discussion (making my job easy). I also thank Aaron Vale of CBRE Caledon and Nirali Dundh of the CFA Society for everything they did to make this event a success.
By the way, I also really liked this morning's panel discussion which CN Investment Division’s CEO Marlene Puffer moderated featuring Donna Mathieu, VP, CIO and Treasurer of NAV Canada; Rachel Volynsky, CIO Mercer Delegated Solutions and Fiona Frick, CEO of Unigestion. Great discussion ladies!
Lastly, and most importantly, Mark Wiseman told me that Evan Siddall has a very serious flaw, one that is almost heresy now that he's taking over the helm at AIMCo: "He's a Leafs fan."
Who the hell is a Leafs or Oilers fan?
Repeat after me: GO HABS GO!!!
The following highlights are for OMERS' CEO Blake Hutcheson who was razzing me when the Leafs beat the Habs 3-2 last week. We got our revenge earlier this week.
Second, AIMCo's Chair Mark Wiseman spoke with BNN Bloomberg earlier today on the appointment of Evan Siddall. Watch it here if it doesn't load below.
Also, Evan Siddall, former CEO of the Canada Mortgage Housing Corp spoke with BNN
Bloomberg anchor Amanda Lang at the Canadian Fixed Income virtual event
last September about the Canadian housing market outlook. I was in agreement with him but the Great Canadian Housing Bubble continues to defy everyone, including me.
Lastly, Conservative MP Pierre Poilievre speaks his mind on "the Gatekeepers" keeping this country from reaching its true potential. Regardless of your political leanings, take the time to watch his speech, it's a bit long but there's a lot of truth in it.