Pension Pulse

Hannah Zhang of Secondaries Investors reports on how CDPQ used the secondaries market to address overallocation: For Canadian pension giant Caisse de dépôt et placement du Québec , the secondaries market has played an indispensable role in rebalancing its private equity portfolio. CDPQ generated C$9 billion ($6.5 billion; €6 billion) in liquidity last year, including roughly C$6 billion from selling direct investments and receiving dividend recapitalisations, and around C$3 billion from selling private equity fund stakes in the secondaries market, head of PE Martin Longchamps tells affiliate title Private Equity International. Secondaries sales were part of Longchamps’ efforts to bring the pension’s PE allocation back on target. When he took over as CDPQ’s head of PE in late 2022, the institution’s allocation to private equity had reached 20 percent for the first time in its investment history, raising concerns over potential overallocation issues. From the start of his ten...

James Bradshaw of the Globe and Mail reports OMERS sells LifeLabs to U.S.-based Quest Diagnostics for $1.35-billion: Toronto-based pension fund Ontario Municipal Employees Retirement System (OMERS) has reached a deal to sell the country’s largest medical testing company, LifeLabs Medical Laboratory Services, to U.S.-based Quest Diagnostics Inc. for $1.35-billion including debt. Secaucus, N.J.-based Quest is buying all of LifeLabs’ equity using cash and debt, and expects LifeLabs will generate about $970-million in annual revenue. LifeLabs will keep its brand, its Canadian headquarters and its management team after the acquisition closes, which is expected to happen by the end of the year, subject to regulatory approvals. Quest also plans to keep patients’ health data stored in Canada, according to a joint statement. After the deal closes, however, Canada’s concentrated market for lab testing will be further controlled by U.S. owners. LifeLabs is Canada’s leading laborato...

Sarah Rundell of Top1000Funds reports UN pension fund slashes equity and pushes into impact and venture: The United Nations Joint Staff Pension Fund (UNJSPF) recently reduced the allocation to equity in its $92.5 billion portfolio by 10 per cent in what Pedro Guazo, representative of the secretary-general (RSG) for the investment of the UNJSPF assets, describes as a conservative strategic allocation in response to the overvaluation in tech. Behind the defensive exterior, the fund is stepping into new allocations in venture, impact, and private credit as well as developing more sophisticated strategies in an increased allocation to fixed income. It speaks to a state of confidence after sharp losses in 2022 at the pension fund that is still in an accumulation phase; supported by a funded ratio of 111 per cent and boasts a large and growing investment team who all have skin in the game as beneficiaries. “We are in a strong position compared to peers,” reflects Guazo who has...

Karen Friar and Ines Ferré of Yahoo Finance report stocks slip en route to sharp weekly losses for S&P 500, Nasdaq: US stocks fell on Friday as worries over a global IT outage calmed, with Wall Street looking for recovery from a sell-off that saw the Dow snap a run of wins and a tech rout continue. The Dow Jones Industrial Average slipped roughly 1%, coming off a drop of over 1% for the blue-chip index. The S&P 500 fell 0.7%, while the tech-heavy Nasdaq Composite declined 0.8%. Stocks are facing weekly losses after a wobbly handful of sessions that saw a dive in techs, with AI-focused chip stocks bearing the brunt. Investors are rotating out of the tech heavyweights that have fueled the recent rally and into small caps , seen by some as benefiting more from interest-rate cuts . In the early hours, investors assessed the potential impact of an "unprecedented" failure in computer systems worldwide that grounded flights and hit banks, telecoms and media compan...

Marion Halftermeyer of Bloomberg reports Texas’ biggest pension fund to pull almost $10 billion from private equity: Texas’ largest public pension fund has decided to shift almost $10 billion out of private equity investments, a blow to an asset class that has faced heightened scrutiny amid dwindling returns and a slowdown in exits for portfolio companies.  The move by the Teacher Retirement System of Texas — which manages $202 billion of assets — is another setback for an industry that has struggled with dealmaking and fundraising after a prolonged era of easy profits.  Texas Teachers is the second of the largest public pensions to officially reduce its target allocation to private equity. It’s paring that to 12% from 14% — below the average 13% for all US public pensions, pension officials said at its board meeting Thursday. The pension estimates it will report a 9.3% gain for its latest fiscal year, Chief Investment Officer Jase Auby said at the meeting. ...

BNN Bloomberg reports Canada Pension names its second chief risk officer in 18 months: Canada Pension Plan Investment Board moved Priti Singh to chief risk officer, replacing a former BlackRock Inc. executive who had been in the role for only a year and a half. Singh is taking over immediately from Kristen Walters, who was appointed in January of last year. CPPIB, Canada’s largest pension manager, made the decision two years ago to split the risk role from the chief financial officer’s job. “After more than 30 years in risk management, Kristen Walters will be leaving CPP Investments to be closer to home,” the Toronto-based fund said in a statement Wednesday. “Walters has made a significant contribution in establishing the CRO role as a standalone function and setting the enterprise risk strategy and we thank her for her service to CPP Investments.” A spokesperson for the $632 billion (US$462 billion) fund declined to comment further. In addition to BlackRock, Walters previ...