Pension Pulse

CDPQ and Ontario Teachers’ have partnered with industry veteran Anurag Chandra to launch a new insurance platform: Constellation Insurance Holdings (“Constellation”), founded by Anurag Chandra, former CEO of Prosperity Life Insurance Group (“Prosperity”), announced today that it has partnered with Caisse de dépôt et placement du Québec (“CDPQ”) and Ontario Teachers’ Pension Plan (“Ontario Teachers’”) and raised US$500 million in initial capital from them as founding investors. CDPQ and Ontario Teachers’ are two of North America’s largest institutional investors and together manage over CA$500 billion in net assets as of June 30, 2019. “Constellation plans to invest in stock and mutual insurers based in North America that are seeking growth capital, stronger ratings, scale efficiencies and equity incentives while maintaining their independent management structure, brand identity, operations and entrepreneurial culture,” said Anurag Chandra, Founder, Chairman & CEO of Constel...

Yaelle Gang, editor of Canadian Investment Review, recently wrote a good comment on HOOPP's outgoing CEO Jim Keohane reflecting on his career and LDI strategy: Twenty years ago, Jim Keohane was brought into the Healthcare of Ontario Pension Plan to launch its derivatives program. Since then, he’s climbed his way to the role of president and chief investment officer, grown his reputation as a trailblazer in liability-driven investing and navigated the pension fund through the financial crisis with positive returns. “Prior to me being here, HOOPP had never done a derivative transaction so I was brought in for that reason,” he says. And now, the HOOPP is known around the world for its LDI strategy, which has derivatives at its core. The LDI strategy began as a result of the technology meltdown of 2000- 2002, when the HOOPP quickly moved from surplus to deficit, says Keohane. “Effectively, our assets and liabilities moved in a different direction, so the liabilities went up a...

Matthew Burgess of Bloomberg reports on the best and worst pension systems in the world: The Netherlands and Denmark have the best pensions systems in the world, according to a global study that shines a light on how nations are preparing aging populations for retirement. The countries took the top two slots in the Melbourne Mercer Global Pensions Index published Monday, both earning an A grade for the level of financial security provided in retirement. Australia came in third, with a B+ grade, while the top 10 was rounded out with Finland, Sweden, Norway, Singapore, New Zealand, Canada and Chile all on B. The survey of 37 nations, which covers almost two-thirds of the world’s population, uses 40 metrics to assess whether a system leads to improved financial outcomes for retirees, whether it is sustainable and whether it has the trust and confidence of the community. The Netherlands again took the top spot in 2019 with most workers benefiting from defined benefit plans bas...

Fred Imbert of CNBC reports that the Dow drops more than 250 points to end the week as Boeing and J&J plunge: The Dow Jones Industrial Average fell sharply on Friday, weighed down by steep losses in Boeing and Johnson & Johnson. The broader market was also pressured by a decline in Netflix shares that led other Big Tech stocks lower. The 30-stock index ended the day down 255.68 points, or 0.95% to close at 26,770.20. Boeing dropped 6.8% — its biggest one-day drop since February 2016 — on news that company instant messages suggest the aerospace giant misled regulators over the safety systems of the 737 Max . Johnson & Johnson slid 6.2% after the company recalled some baby powder upon finding traces of asbestos. Friday’s losses wiped out the Dow’s gains for the week. The index closed down 0.2% week to date. Meanwhile, S&P 500 pulled back 0.4% to end the day at 2,986.20 while the Nasdaq Composite slid 0.8% to 8,089.54. Netflix shares dropped more tha...

Christine Idzelis of Institutional Investor reports that private equity changes everything: Private equity is too big to ignore — for both investors and regulators. “It’s critical,” said Peter Witte, associate director of Ernst & Young’s private equity group, in a phone interview. “If you’re not invested in private equity, or private capital, then you’re really missing out on where our economy is growing.” Private equity firms now manage $3.4 trillion of investor commitments globally, up from less than $500 billion in 2000, according to a report, expected to be released Wednesday, from EY and the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill. Citing Preqin data, they said private capital assets have risen to $6 trillion, including infrastructure, real estate, private debt and natural resources. At the same time, the pool of publicly traded companies in the U.S. has shrunk by almost half in the past 20 years, according to the r...