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John Graham, the new CPPIB CEO, already had successful career as a research scientist before joining pension fund – The Globe and Mail

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John Graham started his career after earning a doctorate in chemistry at Western University in 1999.

CNW/Canada Pension Plan Investment B

John Graham, the money manager who is suddenly responsible for at least some of your retirement savings, is something of an accidental chief executive.

The newly named CEO at the Canada Pension Plan Investment Board – at $476-billion, one of the world’s largest funds – was only handed the top job on Friday after predecessor Mark Machin was forced to resign after receiving the COVID-19 vaccination while traveling in the United Arab Emirates.

And the 49-year-old Mr. Graham only entered the world of finance after a successful first career in science, as a chemist in the Xerox labs where everything from touchscreen technology to the computer mouse were invented.

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Mr. Graham started his career after earning a doctorate in chemistry at Western University in 1999. The Ottawa native then spent nine years at Xerox doing research focused on photovoltaics, the technology of solar cells. In his time at Xerox, Mr. Graham’s work was the basis for 36 U.S. patents, which must be some sort of record for a Bay Street executive.

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While working at Xerox, Mr. Graham went back to school part-time, earning an MBA from the University of Toronto’s Rotman School of Management. CPPIB recruited him away from the labs in 2008, offering a data-crunching job doing portfolio design. Colleagues say he climbed in the ranks by leading forays into new fields, such as reinsurance and private debt markets.

Former CPPIB chief financial officer Benita Warmbold, who worked with Mr. Graham for nine years prior to retiring in 2017, said the new CEO showed “a consistent knack for building the business.” In 2015, CPPIB paid US$12-billion to buy Chicago-based lender Antares Capital from General Electric, one of the fund manager’s largest foreign forays. Mr. Graham was one of the executives charged with overseeing the investment, as an Antares board member.

“Colleagues at all levels enjoyed working with John, including me,” said Ms. Warmbold. “His humility certainly fits the purpose of CPPIB.” One of Mr. Graham’s first leadership roles was running a 35-person credit investment group. Today, that team has 125 employees, and 42 per cent of the work force is female, a sign of a commitment to inclusion that colleagues say is critical to advancing in a public-sector fund.

In 2018, Mr. Graham took global responsibility for all of CPPIB’s credit-based investments, running a $57-billion portfolio and taking a seat with the 14 senior executives who run the fund manager. In a press release on Friday, CPPIB chair Heather Munroe-Blum said: ”By consistently demonstrating deep knowledge of our operations, embracing a global mindset during his time in Asia, while delivering value as a founder and leader of a key investment department, John earned the Board’s unequivocal confidence.”

The new role will mean a significant raise for Mr. Graham, who is married and has two teenaged children. His predecessor earned $5.9-million last year, while the incoming CEO didn’t crack the fund manager’s list of its five highest paid executives.

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Credit Suisse stops custodian service for some U.S. cannabis stocks

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By Shariq Khan and Matt Scuffham

(Reuters) – Credit Suisse Group AG has told customers in recent months it will no longer execute transactions in shares of cannabis companies with U.S. operations or hold them on behalf of clients, a cannabis company executive and other industry sources told Reuters on Wednesday.

The Swiss lender was among a handful of banks that had been willing to buy and sell marijuana-related stocks for clients in the United States and hold those shares as a custodian.

Credit Suisse declined to comment.

Cannabis remains illegal under U.S. federal law, even though many states have legalized its use. This represents a legal risk for investment banks working for companies that produce or trade the drug.

Credit Suisse’s compliance and risk management procedures have come under scrutiny from investors and analysts after it lost at least $4.7 billion from the collapse of Archegos, an investment firm dedicated to managing the fortune of hedge fund veteran Bill Hwang, as well as the suspension of funds linked to insolvent supply chain finance company Greensill.

The MSOS exchange-traded fund, which tracks U.S. marijuana stocks, has fallen by more than a fifth since early February. Several market players said they believed Credit Suisse’s actions played a role in the selloff.

“(When) Credit Suisse pulled custodian (services) on cannabis stocks, a number of large investors in the space lost their ability to custodian the stocks,” said Abner Kurtin, Chief Executive Officer of newly-floated marijuana grower Ascend Wellness Holdings Inc.

“That led to a significant selloff.”

A custodian bank holds customers’ securities for safekeeping, to prevent them from being stolen or lost, while also collecting dividends and handling other corporate actions. It plays an important role in helping many investors to hold shares in companies.

The weed industry has boomed over the last three years, as Canada and a succession of U.S. states, including most recently New York and New Jersey, legalized recreational use.

Credit Suisse shares are down over 20% so far this year, and the bank has said it is cutting its prime brokerage business, which caters to hedge fund clients, by about a third.

 

(Reporting by Shariq Khan and Matt Scuffham; Writing by Patrick Graham; Editing by Howard Goller)

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Sun Life’s misses first-quarter profit estimates

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Sun Life

TORONTO (Reuters) – Sun Life Financial Inc on Wednesday missed analyst estimates for first-quarter core profit, which rose from a year earlier due to business growth and earnings in its asset management and Canadian units.

Underlying profit was C$850 million ($693 million), or 1.45 Canadian cents a share, in the three months ended March 31, from C$770 million, or C$1.31, a year earlier. Analysts had expected C$1.46 a share.

Reported net income jumped to C$937 million, or C$1.59 a share, from C$391 million, or 67 Canadian cents, a year earlier.

($1 = 1.2266 Canadian dollars)

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Manulife, Sun Life post improved first-quarter core profits on business growth, investments

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Manulife

TORONTO (Reuters) – Manulife Financial and Sun Life Financial Inc on Wednesday reported increased core profits from a year ago, driven in part by business growth and improved earnings across all major business units.

But while Manulife beat analyst expectations for the quarter ended March 31, Sun Life missed estimates.

Payouts globally have risen due to claims related to the coronavirus pandemic, but strength in stock markets has helped soften some of that impact. Earnings of Canada‘s top two insurers were affected by steepening yield curves in North America.

While it tempered Sun Life’s results, the No. 2 insurer still saw reported profit more than double from a year ago as a result of favourable equity markets and interest rate changes.

Sun Life also took an after-tax restructuring charge of C$57 million related to changes it is making to its workspace, the company said.

Manulife reported core earnings of C$1.6 billion ($1.3 billion), or 82 Canadian cents a share, in the three months ended March 31, from C$1 billion, or 51 Canadian cents, a year earlier. Analysts had expected 77 Canadian cents.

Reported net income attributable to shareholders declined to C$783 million, or 38 Canadian cents, from C$1.3 billion, or 64 Canadian cents, a year earlier.

Sun Life reported underlying profit of C$850 million ($693 million), or 1.45 Canadian cents a share, in the three months ended March 31, from C$770 million, or C$1.31, a year earlier.

Analysts had expected C$870.8 million or C$1.46 a share.

Reported net income jumped to C$937 million, or C$1.59 a share, from C$391 million, or 67 Canadian cents, a year earlier.

($1 = 1.2277 Canadian dollars)

 

(Reporting By Nichola Saminather; Editing by Chris Reese and David Gregorio)

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