The CEO of the Alberta Investment Management Corporation is leaving the organization by the end of June 2021 in the wake of AIMCo’s heavy investment losses earlier this year.
Kevin Uebelein, who has held the top AIMCo post since 2014, has agreed with the board to “begin now the process of CEO leadership transfer,” AIMCo spokesperson Denes Nemeth said in an email Tuesday.
“AIMCo remains in very capable hands with Kevin continuing at the helm until that date and he has the full support of the board and management as he continues to advance the many priorities before us,” Nemeth wrote.
Uebelein was paid $2.8 million in compensation in 2019 and $3.4 million in 2018, according to AIMCo’s annual reports.
AIMCo, a provincial corporation, manages the investments of several provincial government funds, including the Heritage Savings Trust Fund. It also invests money in the pension funds of more than 300,000 Alberta public sector workers.
AIMCo has been under scrutiny since the spring, when investment managers lost $2.1 billion on a risky investment strategy known as VOLTS. The strategy cost the Heritage fund $411 million, and was partly responsible for Alberta’s nest egg hitting its lowest value in eight years this spring.
The losses prompted AIMCo’s board to order an external review, and the corporation pledged to improve.
In June, the reviewers found internal challenges to investment decisions, risk controls, collaboration and risk culture within the organization were “unsatisfactory.”
Senior leaders at AIMCo didn’t have enough information, fast enough, about the potential risk to their investments, the reviewers concluded. They said AIMCo needed a culture change to prevent future losses.
AIMCo could manage future provincial pension plan
The corporation has been under additional public and political scrutiny since the United Conservative Party government passed a bill in 2019 requiring the Alberta Teachers’ Retirement Fund to use AIMCo as its investment manager. About 83,000 current and retired teachers are affected by the change, which is expected to be complete in 2021.
Bill 22 also required three large public sector pension plans to use only AIMCo as their investment manager. It also gave the government the right to reject potential nominees to pension plan boards.
Finance Minister Travis Toews has said the moves would allow AIMCo to add substantially to the $119-billion worth of assets it manages, which would bring economies of scale. He said teachers and taxpayers would save investment management fees if AIMCo took charge of the investing.
The government is also exploring the option of creating a provincially run public pension plan and pulling Alberta out of the Canada Pension Plan (CPP). An Alberta-run pension plan could be managed by AIMCo.
In September, the government issued a request for proposals for a contractor to study the potential risks, benefits and requirements of establishing a provincial pension plan. If the benefits outweigh the risks, the government has said it would put the question to a provincial referendum in 2021.
The moves have generated pushback from the public and sparked campaigns advocating government stay away from pensions. NDP labour and immigration critic Christina Gray tabled a private members’ bill earlier this year that sought to stop the moves, but it was dismissed by the government.
On Tuesday, Gray said Uebelein’s departure raises questions about the advice AIMCo has given the government about consolidating more assets under AIMCo’s control.
In July, Gray and her caucus colleagues delivered to the premier’s office a list of 36,000 names signed on petitions advocating a halt to the pension changes.
“Albertans are so concerned about retirement security, about being forced to use AIMCo, and about this government’s move toward leaving the Canada Pension Plan, which has been stated by the government, involves AIMCo,” Gray said.
Gray said AIMCo should be more transparent about the causes and consequences of the $2.1-billion investment loss.
The future of AIMCo
Nemeth said AIMCo’s board is immediately starting an international search for a new CEO, and will consider candidates inside and outside the organization.
Nemeth said Uebelein’s departure was his decision, not the board’s.
“His natural term ending date is in the not too distant future, and accordingly he believes that the board should begin the search for his successors now,” he wrote.
He did not provide a date for the end of his term, or information about any potential severance payments.
Uebelein hasn’t indicated his future plans, he said.
There have been other changes to AIMCo’s executive team since the losses first became public in April. Two other senior leaders left the company in June, and the names of three other executives have disappeared from AIMCo’s senior team page on its website. This month, the corporation announced a new chief financial officer, new chief risk officer and the promotion of a vice-president of responsible investment.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
