BCI Gains 3.5% in Fiscal 2023

Benefits Canada reports BCI’s net assets grow 3.5% in fiscal 2023, led by alternatives:

The British Columbia Investment Management Corp. saw a return of 3.5 per cent and increased its assets under management from $228.6 billion to $233 billion during the fiscal year ending March 31, 2023.

According to the investment organization’s annual results, the $3.9 billion increase reflected investment gains of $6.8 billion and $2.8 million in net withdrawals. Over the past 10 years, the BCI has seen annualized returns of 8.5 per cent.

“We have been preparing for a difficult market economic environment and our results are a testament to the merits of our proactive approach to risk management, portfolio diversification and active investing,” said Gordon J. Fyfe, the BCI’s chief executive officer and chief investment officer, in a press release.

The annual results were led by the strong performance of the alternative portfolios. Its infrastructure and renewables portfolio saw the strongest returns, rising 9.2 per cent, followed by real estate (up 7.2 per cent), private equity (4.7 per cent) and real estate debt (4.6 per cent).

The BCI’s public markets portfolios was less successful. Allocations to Canadian equities dipped 3.1 per cent, followed by nominal bonds (down 2.1 per cent). On the other hand, allocations to global equities and short-term fixed income grew by 2.3 per cent and 5.8 per cent, respectively.

Earlier today BCI put out a press release announcing a 3.5 per cent annual return for fiscal 2023, outperforming its benchmark by 3.2 per cent:

June 27, 2023

Achieves greatest one-year value add for the second year in a row and increases gross assets under management to $233.0 billion 

Return highlights for the fiscal year ending March 31, 2023:

  • One-year net annual return of 3.5%, representing $4.6 billion in added value
  • Five-year net annualized return of 7.2%, representing $10.5 billion in added value
  • 10-year net annualized return of 8.5%, representing $16.3 billion in added value
  • 20-year net annualized return of 8.4%, representing $19.5 billion in added value

VICTORIA, BC – British Columbia Investment Management Corporation (BCI) announced today an annual combined pension plan return of 3.5 per cent, net of all fees, for the fiscal year ended March 31, 2023, against a benchmark of 0.3 per cent. Gross assets under management increased to $233.0 billion, from $228.6 billion in fiscal 2022, excluding ($18.0 billion) in investment liabilities managed by BCI’s funding program1. BCI increased net assets under management by $3.9 billion to $215.0 billion, which reflects net investment gains of $6.7 billion and client net withdrawals of $2.8 billion.

“During an unprecedented year, we are proud to have protected capital and added value for our 32 British Columbia public sector clients,” said Gordon J. Fyfe, BCI’s Chief Executive Officer and Chief Investment Officer. “We have been preparing for a difficult market economic environment and our results are a testament to the merits of our proactive approach to risk management, portfolio diversification, and active investing.”

BCI delivered a strong year of relative performance despite prolonged market volatility, inflationary pressures, and record-high interest rates not seen in decades. Fiscal 2023 is the second consecutive year where a new high watermark for outperformance was established with 3.22 per cent excess return above the benchmark, representing $4.6 billion in value add. In fiscal 2022, 2.82 per cent in outperformance above the benchmark resulted in a value add of $4.4 billion. This reflects the strength and resiliency of the portfolios across asset classes and BCI’s focus on owning quality companies and mitigating downside risk during this challenging market environment. Private equity and infrastructure & renewable resources contributed significant gains, demonstrating the effectiveness of BCI’s greater emphasis on the private markets and inflation-sensitive assets.

“BCI’s portfolio of diversified public and private market investments, most of which are actively managed in-house, allows a flexibility and responsiveness to changing market conditions that helped us deliver strong performance despite the ongoing market turmoil,” added Fyfe. “In a rising rate and volatile market environment like this, active management is especially important. Each basis point we generate for our clients above the market return is key to their long-term success.”

1Includes clients’ investment liabilities achieved through government bond repurchase agreements.

2Includes the impact of the clients’ currency hedging policies.


Public Markets 

Public markets, composed of fixed income, private debt, public equity, and absolute return strategy investments, represent $138.0 billion and account for 64.2 per cent of net assets under management, compared with $142.3 billion at the end of fiscal 2022. Additionally, our public markets team manages BCI’s funding program1 representing ($18.0 billion), or (8.4) per cent of net assets under management.

Public Equities 

  • Outperformed due to our focus on investing in high-quality companies especially as equity markets dampened while central banks tried to rein in inflation
  • Continued to invest in diversifying and value-add strategies for clients with $960 million in deployments in the Global Emerging Markets Fund and $1.9 billion gross deployments in the Global Partnership Fund (GPF)
  • The GPF provides clients exposure to absolute return investment strategies and of the 41 months since BCI’s first absolute return investment, 16 were negative for global equities, with the index returning a negative cumulative return of (44.6) per cent during those months. In contrast, our absolute return investments delivered 20.5 per cent cumulative returns during those months and only delivered negative performance during three of the 16 months. BCI’s absolute return strategies have grown to over $5 billion net asset value with total investments in over 30 funds and more than 23 co-investments

Fixed Income 

  • Outperformed due to disciplined credit selection and BCI’s ability to take on larger loan allocations
  • Established a reputation as a leading institutional provider of capital to the direct lending market. In less than five years, BCI has grown the private debt portfolio to $13.5 billion as at the end of the fiscal year
  • On a one-year period, the Principal Credit Fund generated positive returns of 4.6 per cent and outperformed the benchmark by 2.5 per cent
  • Invested in 22 sustainable bond issuances valued at over $1.1 billion, increasing total historical participation to $4.2 billion; we expect this number to grow to $5 billion by 2025

Private Equity

Private equity represents $28.3 billion and 13.1 per cent of net assets under management, compared with $24.8 billion at the end of fiscal 2022.

  • Committed a record $9.8 billion in overall capital with $3.7 billion allocated to 14 direct investments including capital commitments to existing investments
  • Created $15.4 billion of value over the last five years and returned $20.5 billion in cash distributions to clients
  • Invested in Authority Brands, a residential home services platform in North America, Maxar Technologies, a provider of comprehensive space solutions and secure, precise, geospatial intelligence, and ZEDRA, a global specialist in active wealth, corporate and global expansion, funds as well as in pensions and incentives solutions. Maxar Technologies and ZEDRA closed in early fiscal 2024

Infrastructure & Renewable Resources

Our infrastructure & renewable resources (I&RR) program represents $22.3 billion and 10.4 per cent of net assets under management, compared with $20.2 billion at the end of fiscal 2022.

  • Outperformed due to our regulated utility assets exposure, which has been resilient to rising interest rates, and strong capital appreciation. Deal activity was robust in the I&RR space which generated a material valuation uplift for some of our assets
  • Committed $4.0 billion in new opportunities including co-investments in two energy transition assets, Reden Solar, BCI’s first direct investment in solar energy, and Eku Energy, the first direct investment in battery storage. The investments demonstrate BCI’s commitment to actively invest in key areas we believe will benefit from the energy transition as outlined in our 2022 Climate Action Plan

Real Estate Equity

Our real estate equity program represents $36.1 billion and 16.8 per cent of net assets under management, compared with $33.6 billion at the end of fiscal 2022. These assets are actively managed by QuadReal Property Group (QuadReal), an independently operated company owned by BCI.

  • Outperformed due to an overweight sector allocation to industrial, residential, and alternative assets, with geographic diversification, including now managing industrial real estate assets in the United States, thereby protecting the portfolio from market volatility
  • Overall, net deployment was $3.5 billion, which was slightly higher than expected, while strategic disposition activity was focused on enhancing the resiliency of the portfolio. Significantly, distributions were executed in every region in which QuadReal is operating today
  • Added value by securing longer-term leases with commercial tenants and generated strong rental growth in industrial properties with higher market rent lease-ups, allowing the portfolio to benefit from high occupancy levels and stable revenue

Real Estate Debt

Also managed by QuadReal, our real estate debt program represents $7.9 billion or 3.7 per cent of net assets under management, compared to $7.8 billion at the end of fiscal 2022.

  • Outperformed due to the floating rate loans, which make up about 80 per cent of the portfolio, as these loans adjust to the higher interest rates
  • Deployed $1.1 billion in real estate debt, in line with expectations. As banks face increasing capital constraints and property valuations become uncertain, non-bank lenders like QuadReal are well-positioned to benefit from opportunities to fill out the capital structure through subordinate debt and similar financing structures

BCI’s corporate annual report outlining other investment and operational highlights will be released on July 12, 2023, and will be available online at BCI.ca/reports. All figures are in Canadian dollars. 


British Columbia Investment Management Corporation (BCI) is amongst the largest institutional investors in Canada with C$233.0 billion in gross assets under management, as of March 31, 2023. Based in Victoria, British Columbia, with offices in Vancouver, New York City, and London, U.K., BCI manages a portfolio of diversified public and private market investments on behalf of our 32 British Columbia public sector clients.

With a global outlook, BCI integrates ESG factors into investment decisions and activities that convert savings into productive capital to meet clients’ risk and return requirements over time. Founded in 1999, BCI is a statutory corporation created by the Public Sector Pension Plans Act.


Olga Petrycki, Director, External Stakeholder Engagement


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This was another solid fiscal year for BCI where private markets came through nicely (on a relative basis, public markets also performed well).

While the focus is on fiscal year performance the key metric to look at is this: five-year net annualized return of 7.2%, representing $10.5 billion in added value.

Now, earlier today I emailed BCI's CEO/ CIO Gordon Fyfe and his executive assistant and even called her to arrange a quick chat.

Not surprisingly, Gordon was unavailable which is fine but for a $200 billion+ pension fund managing the assets of British Columbia's biggest public sector pension plans, the organization needs to significantly step up its game on communications and transparency. 

Importantly, when OMERS, CPP Investments and PSP Investments publish their results, I don't need to run after them, they provide me with embargoed material ahead of time and arrange a call with their respective CEOs to go over the results.

I'm too old and too tired to run after Canada's Maple Eight, get your stuff in order and do the right thing and provide me with 20 minutes of your time to go over the the results.

To be fair, most of these organizations publish their annual reports along with their results but this year, BCI released its results a couple of weeks ahead of the annual report which is a bit odd (why not wait two more weeks to release more detailed information all at the same time?).

Anyway, overall the results were solid, coming in line with other pension funds whose fiscal year ends as at the end of March but the asset allocation at all these pension funds differs significantly so you can't make direct comparisons, only look at long-term performance and added value over the long run.

One thing that struck me was the 7% return in Real Estate. I know QuadReal has significantly diversified its portfolio by sector and geography but since it manages public and private real estate, I wonder if they held off on taking more material writedowns on some of their private real estate holdings, especially offices in North America.

Real Estate is where some organizations posted better than expected returns (OMERS, CDPQ, BCI) whereas others took bigger writedowns (OTPP which is still transitioning that portfolio, CPP Investments and PSP Investments took bigger writedowns to reflect challenging environment for some sectors).

In Private Equity, returns are most definitely coming down but the key thing there is the asset class created $15.4 billion of value over the last five years and returned $20.5 billion in cash distributions to clients.

The Infrastructure & Renewable Resources (I&RR) program delivered a solid 9.2% in fiscal 2023. I noted this part in the press release: "Deal activity was robust in the I&RR space which generated a material valuation uplift for some of our assets."

Ah, those private market valuations, they always seem to come through when you need them the most! 

Alright, let me stop there before I get too cynical and get accused of writing a rant. -:)

Note: this comment will be updated when the annual report is released on July 12th.

Hopefully by then, Gordon will give me a call to go over the results and more. 

As for BCI, get your Communications and Transparency in line with your larger peers and start divulging a lot more.

You have captive clients from the public sector, it's the least you can do and to be honest, very few people know much about what is going on at BCI and that's not good for attracting and retaining top talent there.

Below, in 2019, the Business Roundtable made headlines when it issued a statement on the importance of stakeholder capitalism—that maximizing shareholder value should not be a corporation's sole and ultimate goal; it must also invest in employees, protect the environment, and deal ethically with suppliers. 

While some said the statement was an attack on capitalism itself, the fact is, over the past few decades, private equity, an approximately $4 trillion industry, has shown a growing interest in a capitalism that serves all stakeholders. This can be seen in the rise of impact investing, which, though still a relative a niche, has become a priority for a growing number of private equity players and financial institutions generally. In this session, panelists will debate the tradeoffs and discuss how private capital and public sector institutions can align corporate success with social progress.

BCI's CEO Gordon Fyfe took part in a panel discussion at the Milken Institute to discuss this and other trends. Watch the discussion below, excellent insights raised by all on this panel.

Update: See my follow-up comment going over BCI's Corporate Annual Report for fiscal 2023 here.