Investment

Canadian pension giants join forces to capitalize on private credit boom

Published

2 years ago

January 9, 2023

AIMCo chief executive Evan Siddall. Photo by Handout/AIMCo

Two of Canada’s largest pension organizations, Alberta Investment Management Corporation and the Public Sector Pension Investment Board, are joining forces to source potentially larger loan investment opportunities and expand their credit portfolios.

The joint venture was announced Jan. 9, the same day AIMCo recruited David Scudellari — a levered finance and capital markets veteran — from PSP Investments to lead the Alberta pension and endowment manager’s international investment activities.

During his seven-year stint at PSP Investments, where he was global head of credit investments and private equity and a member of the executive committee, Scudellari was credited with opening a New York office and building a global credit business with net assets under management of $21.9 billion.

At AIMCo, Scudellari will have additional duties, serving as vice-chair of the investment committee and overseeing investment functions including international expansion, credit and private debt, and management of key external relationships.

Evan Siddall, who became AIMCo’s chief executive 18 months ago, said private credit is a relatively low risk, high return asset class and a market segment where his organization has prioritized growth, notably with the latest hire.

He said Scudellari “built a leading credit investment business at PSP” and his addition will be “hugely beneficial to AIMCo,” which is plotting global expansion as well as focusing on leadership development and succession planning.

Siddall said the collaboration with PSP Investments demonstrates the collective scale and international breadth of the two pension organizations. PSP brings a larger footprint and more established track record in private credit and will source the deals, while AIMCo will contribute matching funds to give both access to larger investment opportunities.

“It’s the intensity and the scale of their business relative to ours that we can just learn from … and, with our scale, they can benefit from having our clients interested in that space too,” said Siddall. “So it’s kind of a win win.”

This is a mutually beneficial endeavour

Evan Siddall, chief executive, AIMCo

He has hinted in the past that partnerships and collaboration will be crucial for the Alberta pension and endowment organization, with $136.6 billion under management at the end of June, to fully participate globally in areas including energy transition and carbon reduction.

“It is absolutely part of our strategy,” Siddall said, adding that the joint venture with PSP Investments demonstrates the power of collaboration among members of the Maple 8, a term applied to a handful of the country’s largest diversified pension plans that includes the Canada Pension Plan Investment Board, the Caisse de dépôt et placements du Québec, and the Ontario Teachers Pension Plan Investment Board.

“This is a mutually beneficial endeavour,” Siddall said.

PSP Investments launched its credit investment practice in November 2015, and has $21.9 billion in net assets under management from offices in New York, London and Montreal. Its focus has been on non-investment grade credit investments in North America and Europe across private and public markets, as well as rescue financing opportunities.

AIMCo, which has private credit teams in Edmonton, Toronto and London, started investing in private credit in 2010, and manages $6.1 billion. It has committed $12.5 billion of capital since inception.

Deborah K. Orida, chief executive of PSP Investments, described the credit investment market as “fast-moving” and said the pension organization’s 40-strong team of credit investment professionals is excited to continue sourcing opportunities on their well-established platform.

“That platform has delivered double-digit returns in a historically low-rate environment since inception, so we think we’re starting from a great place,” said Orida, who became PSP’s CEO in September.

“This joint venture, or partnership, is an opportunity for us to align with a like-minded, long-term investor in Canada to have our combined funds increase our market presence.”

With the departure of Scudellari, who sources say was in contention for the CEO job that was ultimately won by Orida, PSP Investments has promoted Oliver Duff to global head of credit investments, and Simon Marc to global head of private equity and strategic partnerships, both reporting to Orida.

PSP Investments had $230.5 billion in net assets under management as at March 31, 2022, and aims to reach $300 billion.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

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)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

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)

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