AIMCo Shutters its New York and Singapore Offices to "Save Costs"
Alberta Investment Management Corp. is closing its offices in New York and Singapore little more than a year after it opened them, citing a desire to cut costs as the pension fund manager scraps an expansion plan that was forged by leaders who were dismissed last year.
Two senior executives left AIMCo on Wednesday as part of the changes: David Scudellari, who led the New York office as global head of private assets and strategic partnerships, and head of Singapore Kevin Bong, who was also AIMCo’s chief investment strategist.
AIMCo officially opened its Singapore office in September of 2023, after hiring Mr. Bong. A ribbon cutting ceremony for the New York office followed in February, 2024.
AIMCo’s “investment strategy has not changed,” and the decision to shutter the offices was made after weighing the value they added against “operational costs,” said spokesperson Sabrina Bhangoo.
“The executive committee made the decision that they’re able to pursue any global investment opportunities from our London office,” Ms. Bhangoo said. “They’re still very, very committed to continuing to invest in the [Asia-Pacific] region and globally, and they will leverage our extensive network of partners and the other existing offices that we have.”
AIMCo still has offices in Edmonton, Calgary, Toronto, London and Luxembourg. “We’ll continue to add value for our clients from those locations.”
Mr. Scudellari and Mr. Bong could not immediately be reached for comment.
Bloomberg News first reported AIMCo’s decision to close the offices and the executive departures.
Four days ago, Mr. Scudellari posted a celebratory note on social media, marking the first anniversary of the New York office’s opening event, which he said "included a Who’s Who in New York financial circles."
Mr. Scudellari wrote that the New York office “was able to source approximately $2-billion of co-investment opportunities for 5 asset classes,” and that its private debt and loan unit’s “gross deployment” nearly tripled compared with the prior year. He also said AIMCo held more than 200 meetings at the office.
“After a great firmwide effort, we have become a top of mind partner by working closely with each of the asset classes and expanding existing relationships through our local presence and active engagement with a top of house/holistic approach,” he wrote.
AIMCo’s global head of private equity, Peter Teti, has taken over from Mr. Scudellari as head of private assets on an interim basis while the pension fund manager reviews its senior executive structure. Global head of public markets Justin Lord remains in his role.
The decision to open new offices abroad was part of a strategy led by former AIMCo chief executive officer Evan Siddall, who was dismissed along with three other senior leaders and the pension fund manager’s entire board of directors in a dramatic shakeup last November.
The purge came after Alberta’s government clashed with AIMCo leadership over the way the $169-billion pension fund manager was being run. The decision to open new international offices was one flashpoint, with provincial government officials singling out the cost of AIMCo’s New York office space.
Ms. Bhangoo said Alberta’s government was not involved in AIMCo’s decision to close the two offices. “It was solely made by AIMCo’s executive committee.”
When the Singapore office opened in 2023, Mr. Siddall told The Globe that AIMCo was “very under-represented in Asia,” and that “we’ve missed opportunities for sure.”
Barbara Shecter of the National Post also reports AIMCo shutters offices in New York and Singapore in first major move since shakeup:
Alberta Investment Management Corp. has shuttered its international offices in New York and Singapore in its first major move since the Alberta government shook up the board and management at the province’s major investment manager and appointed former Canadian prime minister Stephen Harper as chair.
“AIMCo has made the decision to close its offices in New York and Singapore as part of a strategic realignment of resources to better serve our clients,” spokesperson Carolyn Quick said.
“The decision follows a careful evaluation of the operational costs and the overall impact on our investment objectives. We are confident in our ability to maintain a strong global presence and will continue to fulfill our purpose through our other offices.”
In addition to the office closures, AIMCo has parted ways with two senior investment managers.
Quick confirmed that David Scudellari, a senior executive hired with much fanfare in 2023 to ramp up private credit investments, has also parted ways with AIMCo. He was recruited from the Public Sector Pension Investment Board and his portfolio was expanded in September to include overseeing global private assets, such as private credit, infrastructure, real estate and private equity, following the departure of chief investment officer Marlene Puffer.
AIMCo’s newest international offices in New York and Singapore were opened over the past couple of years under former chief executive Evan Siddall, who was fired in November as part of a stunning shakeup that also removed the entire AIMCo board. Three of the directors were then brought back and Harper was named chair. Ray Gilmour, a top Alberta government bureaucrat, was installed as interim CEO.
Alberta Finance Minister Nate Horner said the shakeup was undertaken because AIMCo’s costs had dramatically risen and returns had not kept up, a narrative that was disputed point by point in a letter sent to him by former chair Kenneth Kroner.
Sources said that friction had been building between AIMCo and the government for months, with one of the tension points being the government’s unhappiness with the investment manager’s international expansion, which included expensive real estate and was viewed as drawing well-paid investment jobs away from Alberta.
The New York office was opened in 2024, and Siddall at the time said having a physical presence in important financial markets would greatly enhance how investments were sourced, evaluated and ultimately executed. He said the international offices were necessary to further diversify the asset mix for AIMCo clients, which include the Alberta government.
Siddall said the investment manager had “a significant client mandate” to expand AIMCo’s private credit portfolio and that having a team based in Manhattan would help accelerate those efforts.
The Singapore office was opened in 2023. Kevin Bong, a veteran investment executive brought in to run the office, is no longer with AIMCo, Quick said.
With the closures, AIMCo, which invests on behalf of a variety of pension, endowment and government funds in Alberta, now has five offices: Edmonton, Calgary, Toronto, London and Luxembourg.
Layan Odeh of Bloomberg also reports Alberta fund shuts Singapore, New York offices; 2 senior executives leave:
Alberta Investment Management Corp. has decided to shutter its new offices in Singapore and New York as it retrenches from its global expansion plan.
The Canadian pension manager also parted ways with David Scudellari, its global head of private assets, and Kevin Bong, the executive who ran the Singapore office, a spokesperson confirmed. Peter Teti has been tapped as interim head of private assets.
It’s a major reversal for the $169 billion (US$118 billion) money manager, which opened the Singapore office in 2023 and the New York location just last year.
Alberta’s finance minister set the restructuring in motion in November when he fired Aimco’s entire board and Chief Executive Officer Evan Siddall, who had championed the growth plan.
“The decision follows a careful evaluation of the operational costs and the overall impact on our investment objectives,” spokesperson Sabrina Bhangoo said by email.
“We remain committed to pursuing investment opportunities in the APAC region and globally, leveraging our extensive network of partners and existing offices to provide continued value to our clients.”
Scudellari had been in his role only since September, assuming responsibilities from former Chief Investment Officer Marlene Puffer.
Bong joined Aimco in August 2023 from GIC Pte and held the role of chief investment strategist, responsible for bringing Aimco into more deals in the Asia-Pacific region.
Scudellari didn’t immediately respond to a request for comment, while Bong couldn’t be reached. Both are no longer listed on the firm’s website.
Last month, Aimco eliminated 19 jobs in non-investment areas, including the employee responsible for Aimco’s diversity, equity and inclusion program.
Alberta Finance Minister Nate Horner shocked Aimco employees by ejecting Siddall and the board on Nov. 7, saying they had allowed expenses to soar to unacceptable levels.
The government named Ray Gilmour as interim CEO and installed Stephen Harper, the former Canadian prime minister, as chair.
Let me begin by stating although I'm not surprised, I'm disappointed and think this is further proof that Alberta's government wants to radically change the way AIMCo operates.
I'm not surprised because with all due respect to Sabrina Bhangoo who is just doing her job, this was in the works long before they fired Evan Siddall and most of the board of directors.
As a friend of mine told me: "They probably looked at the cost of the New York and Singapore offices and how much they are paying senior execs there and said shutter them down, cut those costs."
He added: "They also probably said if they want to business with us, let them come to Edmonton, Calgary or Toronto and sign deals."
While I understand this, in my opinion that's a very myopic way of looking at things.
Yes, there is a cost to having a New York and Singapore office but a proper cost benefit analysis looks at what those offices are generating in terms of leads and what they are bringing in terms of returns.
It's easy to say I'll just sit in my office in Edmonton and all the big private equity and private credit funds will come feed me deals but in practice, that's not the way it works.
Developing relationships takes time, it takes boots on the ground in key areas all over the world and let's face it, New York is a major financial center and so is Singapore as it represents a gateway into Asia Pacific.
Anyways, David Scudellari posted this on LinkedIn five days ago and I think it was his way of saying goodbye, thank you and how silly it is to only look at the costs of the New York office:
Let me repeat it:
What a year for the New York office!Sounds to me like the New York office more than delivered great results to justify its cost.
I just want to say thank you to our colleagues and partners who made it possible for such a successful first full year for the New York office. This week marks the anniversary of our Opening Event which helped kick the year off and included a Who's Who in New York financial circles. After a great firmwide effort, we have become a top of mind partner by working closely with each of the asset classes and expanding existing relationships through our local presence and active engagement with a top of house/holistic approach. As a result, the New York office was able to source approximately $2 billion of co-investment opportunities for 5 asset classes, facilitate PDL's gross deployment which almost tripled year-over-year and have over 200 meetings in our space. I could not be prouder of the work that we all have done with the goal of delivering superior net returns for our clients.
Way to go Team!
As far as the Singapore office, Kevin Bong and his team weren't there long enough to generate the big deals but from what I know they were doing a great job.
Keep in mind, every major pension investment manager in Canada except HOOPP has an office in New York, London, Singapore and a few also have one in Mumbai.
BCI just announced today the expansion of its Private Equity group into London.
If you want to do business in Europe and be part of major deals in private markets, you better have a presence there.
AIMCo hasn't announced the closing of other offices and I doubt they will close others.
What perplexes me is the way they are going about these restructurings, slowly and painfully.
Get on with it already, cut what you want to cut, find a new CEO and introduce your new strategy.
On the subject of new CEO, now that David Scudellari is gone, it comes down to Peter Teti, their Global Head of Private Equity who is now in charge of all private markets, Ben Hawkings, Global Head of Infrastructure, Renewable Resources and Energy Transition or an external candidate.
Dave Scudellari would have made an excellent CEO but he's not Canadian and that works against him these days.
Now, to be fair, it's possible the executive committee and Board had legitimate reasons to shutter the New York and Singapore offices -- all part of a leaner and meaner AIMCo -- but what ultimately counts for members is long-term returns and whether the organization can deliver satisfactory returns to make sure their individual pension plans remain fully funded no matter the economic and market environment.
From my vantage point, this all looks well orchestrated. I maintain this is part of the Government of Alberta's master plan for AIMCo for a long time and don't buy the official line that the executive committee decided this on its own.
Time will tell, if I see AIMCo investing more domestically and directly in Alberta then I will be certain the government is pulling all the strings in the background and the executive committee is there to give the appearance of the organization is being run independently.
Let me end by stating although I never met David Scudellari, I've heard nothing but good things about him and his track record at PSP and AIMCo speaks for itself.
I wish him, Kevin Bong and all the AIMCo employees who were affected by the closing of these two offices all the best.
Needless to say, there is a cost to firing all these people, it will cost the organization millions in severance packages and members will have to swallow this cost and hope that AIMCo can sustain the loss of investment talent in key areas.
I'm obviously skeptical (and cynical) but I've been skeptical since the Government of Alberta detonated a nuclear bomb at AIMCo.
Hope I'm dead wrong for the sake of AIMCo, its employees and its members.
Below, NBC News reports President Trump announced plans for what he termed "fair and reciprocal" tariffs on US trade partners. The president signed a memorandum calling for a country-by-country report determining if the tariffs will be necessary.
Keep in mind, the duties could go into effect by April, giving affected nations time to launch negotiations.
It's depressing hearing Trump harping on tariffs while he wants the Fed to lower rates.
I think Rupert Murdoch's editorial writing team at the Wall Street Journal is right, the president doesn’t understand how money actually works.
I'll leave it up to you to figure out if Alberta's government understands how AIMCo works.:)
Comments
Post a Comment