AIMCo sees strong tailwinds in logistics, data centres, health centres and multi-family housing and has been shifting investment dollars there
CALGARY – Alberta’s public pension manager admits it is overexposed to both the oil and gas industry and Canada’s largest oil-producing province, but its chief investment officer said those weightings are coming down as strategies shift.
“We go where we see the best risk-adjusted returns and the exposure we have in Alberta is driven by our own views,” Dale MacMaster, chief investment officer of Alberta Investment Management Corp., said in an interview following the release of the public pension investment manager’s 2020 annual report on June 28.
“Let’s face it, for many, many years Alberta was Canada’s leading engine of growth. Alberta far outpaced the rest of the country and it had very strong attributes.”
MacMaster said that outperformance has led AIMCo, which manages $118.6 billion in assets, to being slightly overweight in Alberta, particularly in real estate and the energy sector, where it is invested in public equities and through its fixed-income portfolios.
AIMCo in the past year has participated in refinancing efforts at Calfrac Well Services Ltd. and Western Energy Services Corp. as those companies opted to delay bond payments and restructure in the face of sharp sector downturns.
But on the same day that AIMCo released its annual report, Calgary-based junior Razor Energy Corp. announced it was deferring a regularly scheduled interest payment on a $50-million term loan to AIMCo.
“The company is grateful to be partners with AIMCo and the continued support as both a major shareholder and senior lender,” Razor said in a press release.
Nevertheless, MacMaster said oil and gas equities have rebounded along with Alberta’s economy, and that AIMCo has been tilting away from investments in the province, particularly its real-estate market, for several years.
The exposure to the local oilpatch has led to criticism that the fund manager should be better diversified outside of Alberta’s biggest sector to insulate against oil and gas downturns.
MacMaster said AIMCo sees strong tailwinds in logistics, data centres, health centres and multi-family housing real-estate investments and it has been shifting more investment dollars into those asset classes in recent years.
Let’s face it, for many, many years Alberta was Canada’s leading engine of growth. Alberta far outpaced the rest of the country
Dale MacMaster
“The Alberta weight and the office and retail weight will come down over time with that repositioning,” he said.
MacMaster also pushed back on suggestions that AIMCo was too invested in energy, noting it is overweight by just 0.4 per cent and 0.5 per cent in the sector, “so not enough to make a huge difference.”
More broadly, he said a V-shaped recovery in both the markets and commodities have allowed AIMCo to sharply recover in the second half of 2020 after a volatility trading scheme impacted returns in the first half of the year.
AIMCo suffered a catastrophic $2-billion loss last year from a volatility trading scheme called VOLTS, which suffered major losses due to volatility caused by the outbreak of COVID-19.
“From an investment perspective, this past year began with a crash in March, where there was no place for investors to hide and where AIMCo sorely underperformed for our clients,” outgoing chief executive Kevin Ubelein said in the company’s annual report, published June 30.
Following the losses from the VOLTS program, AIMCo accelerated a leadership transition and new chief executive Evan Siddall, previously head of the Canada Mortgage and Housing Corp., began on July 1.
Despite those losses, which prompted a review of the Edmonton-based pension fund manager’s risk strategies, AIMCo managed to post a 2.5-per-cent return for the year, generating $3 billion in net investment income.
Financial Post
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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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