The Canon EOS 6D Mark II is a versatile DSLR camera designed for enthusiasts and professionals, offering advanced features for photography and videography. This manual provides a comprehensive guide to unlocking its full potential, ensuring users can master its functionality and settings for exceptional results.

1.1 Overview of the Canon EOS 6D Mark II

The Canon EOS 6D Mark II is a full-frame DSLR camera featuring a 26.2MP CMOS sensor, DIGIC 7 image processor, and vari-angle touchscreen LCD. It offers built-in Wi-Fi, NFC, and Bluetooth for seamless connectivity. With Dual Pixel AF, it excels in autofocus performance, while its weather-sealed body ensures durability. This camera balances portability with advanced features, making it ideal for both amateur and professional photographers seeking high-quality images and versatile functionality.

1.2 Purpose of the Manual

This manual is designed to guide users in understanding and utilizing the Canon EOS 6D Mark II effectively. It provides detailed instructions on camera settings, features, and troubleshooting, ensuring photographers of all levels can optimize their experience. The document covers everything from basic operations to advanced techniques, helping users unlock the camera’s full potential for capturing stunning images and videos.

Key Features of the Canon EOS 6D Mark II

The Canon EOS 6D Mark II features a 26.2MP full-frame sensor, vari-angle touchscreen, 45-point autofocus, dual-pixel AF, and 1080p video recording, making it ideal for photography and videography.

2.1 Design and Build Quality

The Canon EOS 6D Mark II boasts a lightweight yet durable magnesium alloy body, weather-sealed for outdoor use. Its ergonomic design ensures comfort during extended shoots, with intuitive controls like the Quick Control Dial. The camera’s robust construction and premium finish make it a reliable choice for professionals and enthusiasts alike, delivering a balance of portability and resilience for various shooting environments.

2.2 Sensor and Image Quality

The Canon EOS 6D Mark II features a 26.2MP full-frame CMOS sensor, delivering crisp, detailed images with excellent dynamic range. Paired with the DIGIC 7 Image Processor, it ensures enhanced noise reduction and precise color reproduction. The camera supports a wide ISO range of 100-40000, expandable to 50-102400, making it capable of capturing high-quality images in various lighting conditions. RAW and JPEG formats are available, offering flexibility for post-processing and sharing.

2.3 Autofocus System

The Canon EOS 6D Mark II boasts a 45-point all-cross-type AF system, enabling precise and fast focusing. Dual Pixel AF technology enhances autofocus speed and accuracy in live view and video modes. The system performs exceptionally well in low-light conditions, down to -3 EV, and supports advanced tracking for dynamic subjects. Custom AF settings allow users to tailor focus behavior, making it ideal for portraits, sports, and wildlife photography.

2.4 ISO Range and Noise Performance

The Canon EOS 6D Mark II features an ISO range of 100-40000, expandable to 50-102400, ensuring flexibility in various lighting conditions. The DIGIC 7 image processor minimizes noise, delivering clean images even at high ISOs. Low-light performance is exceptional, with minimal grain and preserved details. The manual provides guidance on optimizing ISO settings for different scenarios, helping users achieve the best results in both stills and video recording.

2.5 Video Capabilities

The Canon EOS 6D Mark II supports Full HD video recording at 60fps, offering smooth motion and high-quality footage. It features in-camera digital stabilization, reducing camera shake and ensuring steady videos. The manual highlights settings for optimal video capture, including resolution, frame rates, and audio recording options, enabling users to produce professional-grade content with ease and precision.

Accessing the Canon EOS 6D Mark II Manual

The Canon EOS 6D Mark II manual is available as a downloadable PDF from Canon’s official website, ensuring easy access to detailed instructions and troubleshooting guides.

3.1 Where to Download the Manual

The Canon EOS 6D Mark II manual can be downloaded from the official Canon website. Visit www.canon.com and navigate to the support section. Select your camera model, and you’ll find the manual available in PDF format for free download. Ensure to use Adobe Reader 6.0 or later for optimal viewing. This direct access provides instant guidance for camera setup, features, and troubleshooting.

3.2 Navigating the PDF Manual

The Canon EOS 6D Mark II manual is provided as a detailed PDF file. Use the bookmarks panel in Adobe Reader for easy navigation between sections. Key areas include camera setup, shooting modes, and troubleshooting. The manual is searchable, allowing quick access to specific topics. Ensure to use Adobe Reader 6.0 or later for full functionality. This comprehensive guide is organized to help users master the camera’s features efficiently.

Setting Up Your Canon EOS 6D Mark II

This section guides you through unboxing, initial setup, charging the battery, inserting the memory card, and familiarizing yourself with the camera’s basic controls and layout.

4.1 Unboxing and Initial Setup

Upon unboxing, ensure all accessories are included: camera body, battery, charger, neck strap, and manual. Insert the battery and memory card, ensuring they are securely locked. Power on the camera and navigate through the initial setup menu to set language, date, and time. Familiarize yourself with the basic controls and layout, including the mode dial, LCD screen, and navigation buttons. This step ensures your camera is ready for immediate use.

4.2 Charging the Battery and Inserting the Memory Card

Charge the LP-E6N battery using the provided LC-E6 charger until the indicator turns green. Avoid using third-party chargers to prevent damage. Insert the memory card into the SD/SDHC/SDXC slot, ensuring it clicks securely into place. Check the card’s write-protect switch is in the “unlocked” position to enable data writing. Verify the battery is fully charged and the card is properly seated before powering on the camera.

4.3 Basic Camera Controls and Layout

Familiarize yourself with the EOS 6D Mark II’s intuitive controls. The Mode Dial selects shooting modes, while the Shutter Button captures images or starts/stops video. Adjust settings using the Aperture/Exposure Compensation Dial and ISO button. The Multi-controller navigates menus and selects focus points. The Quick Control Dial provides quick access to key settings like ISO, AF, and metering modes. Understanding these controls enhances shooting efficiency and creativity.

Shooting Modes

The EOS 6D Mark II offers various shooting modes, including Manual, Aperture Priority, Shutter Priority, Auto, and Scene Modes, catering to both creative control and ease of use.

5.1 Understanding the Mode Dial

The mode dial on the Canon EOS 6D Mark II is located on the top right and provides quick access to various shooting modes. It features options such as Auto, Program (P), Shutter Priority (Tv), Aperture Priority (Av), Manual (M), and Custom Modes (C1-C3). Scene Intelligent Auto mode simplifies shooting for beginners, while custom modes allow users to save personalized settings. Understanding the mode dial is essential for selecting the right mode for any situation, ensuring optimal control over aperture, shutter speed, and ISO. This feature enhances creativity and efficiency, catering to both novice and advanced photographers.

5.2 Manual Mode (M)

Manual Mode (M) on the Canon EOS 6D Mark II offers full creative control, allowing users to independently adjust aperture, shutter speed, and ISO. This mode is ideal for advanced photographers who want precise control over their shots. Accessible via the mode dial, Manual Mode enables customization to achieve specific artistic effects, such as freezing motion or creating motion blur. It is particularly useful in challenging lighting conditions or for capturing unique visual styles, making it a powerful tool for professional-level photography.

5.3 Aperture Priority Mode (Av)

Aperture Priority Mode (Av) allows users to set the desired aperture, while the camera automatically adjusts the shutter speed for optimal exposure. This mode is ideal for controlling depth of field, making it perfect for portrait photography (blurred backgrounds) or landscape shots (sharp focus throughout). Located on the mode dial, Av mode provides creative flexibility while maintaining ease of use, ensuring professional-level results with minimal effort.

5.4 Shutter Priority Mode (Tv)

In Shutter Priority Mode (Tv), users set the shutter speed, while the camera automatically adjusts the aperture for proper exposure. This mode is perfect for capturing motion, such as freezing fast-moving subjects or creating artistic blur. Located on the mode dial, Tv mode offers creative control over motion effects, making it ideal for sports, wildlife, or artistic photography, while ensuring the camera handles the rest for balanced exposure.

5.5 Auto Mode and Scene Modes

Auto Mode simplifies photography by automatically adjusting settings for optimal results, ideal for beginners. Scene Modes, such as Portrait, Landscape, and Sports, tailor settings for specific scenarios. The Canon EOS 6D Mark II manual details these modes, guiding users through their use for enhanced creativity. Refer to the PDF manual for detailed instructions on leveraging these features effectively to capture stunning images in various conditions.

Customizing Your Camera

The Canon EOS 6D Mark II allows users to customize buttons and controls for personalized workflow efficiency. Create custom shooting modes for quick access to preferred settings, enhancing productivity and creativity;

6.1 Customizing Buttons and Controls

The Canon EOS 6D Mark II offers extensive customization options for its buttons and controls, allowing users to tailor the camera to their preferences. Assign functions to buttons like the M-Fn button for quick access to frequently used settings. This feature enhances shooting efficiency and streamlines workflows, making it ideal for both amateur and professional photographers seeking personalized control over their camera operations.

6.2 Creating Custom Shooting Modes

The Canon EOS 6D Mark II allows users to create custom shooting modes by saving personalized settings for quick access. This feature is ideal for specific photography scenarios, such as portrait or landscape shooting. Simply configure your desired settings, save them to one of the custom modes (C1-C3), and retrieve them via the mode dial for efficient shooting. This capability enhances workflow and ensures consistent results across different photographic situations.

6.3 My Menu Setup

The Canon EOS 6D Mark II’s My Menu feature allows users to customize their menu by registering frequently used settings. This streamlines workflow by providing quick access to preferred options. To set up My Menu, navigate to the menu tab, select “My Menu Settings,” and choose up to six items to add. This personalized menu can then be accessed directly, saving time and enhancing efficiency during shoots. Organize your settings strategically for optimal performance.

Image Quality and Settings

The Canon EOS 6D Mark II offers customizable image quality settings, including resolution, compression, and color profiles. Adjust white balance, Picture Style, and noise reduction for optimal results.

7.1 Image Size and Format (JPEG/RAW)

The Canon EOS 6D Mark II allows users to select image size and format, balancing resolution and file size. Choose from various JPEG compression levels or shoot in RAW for maximum detail. RAW files retain all sensor data, enabling advanced post-processing. JPEG is ideal for direct sharing, while RAW is best for professional editing. Adjust settings in the menu to suit your workflow and storage needs, ensuring optimal image quality and flexibility. File formats can be set independently for stills and video modes.

7.2 Picture Style Settings

The Canon EOS 6D Mark II offers customizable Picture Style settings, allowing users to adjust image processing parameters like sharpness, contrast, and color tone. Predefined styles include Standard, Portrait, Landscape, Fine Detail, and more. Users can fine-tune these settings or create custom Picture Styles to match their creative vision. These settings are applied during image processing, enabling consistent results across different shooting scenarios and enhancing post-processing flexibility for both JPEG and RAW files.

7.3 White Balance and Color Temperature

The Canon EOS 6D Mark II allows precise control over white balance and color temperature to capture accurate colors in various lighting conditions. Preset options include Auto, Daylight, Shade, Tungsten, Fluorescent, and Flash. Custom white balance enables manual adjustment for specific lighting setups. Additionally, color temperature can be fine-tuned in Kelvin (K) for personalized color tones, ensuring consistent and natural-looking results in both stills and video, enhancing the overall visual appeal of your images.

7.4 Image Compression and Quality

The Canon EOS 6D Mark II offers flexible image compression options to balance file size and quality. Choose between Fine, Normal, or Basic compression levels for JPEGs. RAW files capture uncompressed data, preserving maximum detail for post-processing. Adjusting compression settings ensures optimal storage efficiency while maintaining image integrity, catering to both professional and casual shooters’ needs for high-quality output without compromising workflow flexibility.

Advanced Shooting Techniques

Explore advanced techniques like focus bracketing, HDR, and silent shooting to enhance your photography. These features offer precise control and creativity, elevating your image capture capabilities.

8.1 Using the Built-in Flash

The Canon EOS 6D Mark II features a built-in flash for convenient lighting solutions. Activate it via the camera menu or by pressing the flash button. The flash supports E-TTL II metering for precise exposure control. Use flash exposure compensation to adjust brightness. It’s ideal for fill lighting in backlit scenes or adding depth indoors. The flash also supports wireless control for off-camera setups, enhancing creativity in various shooting conditions.

8.2 Bracketing and HDR

The Canon EOS 6D Mark II supports Auto Exposure Bracketing (AEB), capturing up to 7 frames at varying exposures. This is ideal for high-contrast scenes, allowing you to merge images into HDR. Enable AEB via the camera menu and adjust the exposure range. The built-in HDR mode processes images in-camera, creating a single photo with enhanced dynamic range. Use this feature for landscapes or interior shots to capture detailed shadows and highlights effortlessly.

8.3 Focus Bracketing and Stack Shooting

Focus bracketing on the Canon EOS 6D Mark II allows capturing multiple shots at varying focus points, ideal for macro or close-up photography; Enable this feature via the camera menu to create a series of images with different focal planes. Stack shooting combines these images into one, extending depth of field. This technique ensures sharpness across the entire frame, perfect for detailed subjects like flowers or small objects, enhancing precision in your photography workflow.

8.4 Silent Shooting Mode

Silent Shooting mode on the Canon EOS 6D Mark II reduces camera noise, making it ideal for discreet photography. Enabled via the menu, it uses electronic shutter to minimize sound. Perfect for wildlife or events where noise might disturb subjects. Note that rolling shutter effects may occur during fast movements. This feature enhances versatility, allowing photographers to capture moments without drawing attention, ensuring a more natural and uninterrupted shooting experience in sensitive environments. Use it wisely to preserve the moment undetected.

Video Recording

The Canon EOS 6D Mark II supports 1080p video recording at various frame rates, featuring Movie Digital IS for stabilization, HDR, and external microphone compatibility for enhanced audio quality.

9.1 Video Mode Basics

Engaging Video Mode on the Canon EOS 6D Mark II activates the camera’s movie recording capabilities. Users can access this mode via the mode dial, enabling manual or auto settings. The camera offers customizable frame rates and resolutions, ensuring flexibility for various projects. External microphones enhance audio quality, while digital IS stabilizes footage, making it ideal for both casual and professional video capture.

9.2 Adjusting Video Settings (Resolution, Frame Rate, etc.)

The Canon EOS 6D Mark II allows users to adjust video settings such as resolution, frame rate, and compression. Resolution options include Full HD (1080p) at 24, 25, or 30 fps. These settings can be customized via the menu system, enabling precise control over video output. The camera also supports external microphone input for enhanced audio quality, ensuring high-quality video and sound synchronization for professional-grade results.

9.3 Using External Microphones

The Canon EOS 6D Mark II supports external microphones via its 3.5mm stereo jack, enhancing audio quality in video recordings. Users can connect third-party microphones to capture clearer sound, reducing ambient noise. The camera also allows manual adjustment of audio levels for precise control. This feature is particularly useful for videographers seeking professional-grade audio to complement their video footage, ensuring high-quality sound that matches the camera’s impressive imaging capabilities.

9.4 Movie Digital IS and Stabilization

The Canon EOS 6D Mark II features Movie Digital IS, enhancing video stability by reducing camera shake and blur. This electronic stabilization works alongside lens-based IS for smoother footage, especially during handheld shooting. It supports 5-axis image stabilization, ensuring sharper and steadier videos. This feature is particularly beneficial for dynamic or low-light conditions, helping creators achieve professional-grade stability without additional equipment, and is easily enabled through the camera’s menu system for optimal results.

Connectivity and Sharing

The Canon EOS 6D Mark II offers built-in Wi-Fi, NFC, and Bluetooth for seamless connectivity. Transfer images to smartphones or computers and enable remote shooting via the Canon Camera Connect app. GPS support allows for geotagging photos, making it easy to organize and share your work efficiently.

10.1 Wi-Fi and NFC Setup

To enable Wi-Fi on the Canon EOS 6D Mark II, go to the Menu and select Wi-Fi/NFC settings. Choose your network from the list or enter the password manually. For NFC, simply tap your compatible Android device to the camera’s NFC area to establish a quick connection. Use the Canon Camera Connect app to transfer images to your smartphone or enable remote shooting. This feature enhances sharing and control, making it ideal for modern photography workflows.

10.2 Transferring Images to a Smartphone

After establishing a Wi-Fi connection, use the Canon Camera Connect app to transfer images to your smartphone. Select the desired photos on the camera and choose the transfer option. For a faster process, enable NFC on both the camera and your Android device, then tap them together to initiate a direct transfer. This seamless feature allows for easy sharing and backup of your captured moments, enhancing your workflow and accessibility.

10.3 Remote Shooting with the Canon Camera Connect App

With the Canon Camera Connect app, you can remotely control your EOS 6D Mark II, adjusting settings like aperture, shutter speed, and ISO. Use live view to preview shots, focus manually or automatically, and trigger the shutter. This feature is ideal for capturing photos in challenging positions or minimizing camera shake. It also allows real-time preview and image review, making remote shooting convenient and precise for creative control and streamlined workflow.

10.4 GPS and Geotagging

The Canon EOS 6D Mark II features built-in GPS, enabling geotagging of images with precise location data. This function automatically records latitude, longitude, and altitude in the image’s EXIF information, ideal for tracking shoots during travel or outdoor photography. GPS data enhances image organization and sharing, allowing users to view photos on maps or sort them by location. This feature is particularly useful for documenting trips or projects requiring location-based metadata for easy reference and organization.

Maintenance and Troubleshooting

Regularly clean the camera and sensor to maintain image quality. Update firmware for optimal performance. Troubleshoot common issues like error messages or connectivity problems using the manual.

11.1 Cleaning the Camera and Sensor

Regular cleaning is essential for maintaining image quality. Use a soft-bristle brush or bulb blower to remove dust from the sensor and camera surfaces. Avoid touching the sensor with bare hands. For stubborn spots, use a dry microfiber cloth. Never apply liquids directly to the sensor. Clean the exterior with a soft cloth and avoid harsh chemicals. Refer to the manual for detailed cleaning procedures to prevent damage and ensure optimal performance.

11.2 Updating Firmware

Regularly updating your Canon EOS 6D Mark II’s firmware ensures optimal performance and adds new features. Visit Canon’s official website, navigate to the support section, and search for your camera model to check for available updates. Download the latest firmware and follow the provided instructions to transfer the update to your camera’s memory card. Insert the card, access the firmware update option in the menu, and proceed with the update. Ensure the battery is fully charged and avoid interruptions during the process. After completion, restart the camera and verify functionality. This maintains your camera’s performance and unlocks new capabilities.

11.3 Common Issues and Solutions

Common issues with the Canon EOS 6D Mark II include error messages, sensor smudges, and Wi-Fi connectivity problems. For error messages, refer to the manual or Canon support. Sensor cleaning can be done with a swab and solution. Connectivity issues often resolve by restarting the camera or updating firmware. For persistent problems, contact Canon support or visit an authorized service center for professional assistance.

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Layan Odeh of Bloomberg reports Alberta Fund’s severance costs jump 383% after executive purge:

Alberta Investment Management Corp. paid nearly C$6 million ($4.4 million) in severance and other benefits to a departing chief investment officer who was in the job for about 20 months.

Marlene Puffer left the public money manager last September, several weeks before the provincial government stunned staff by firing the entire board, Chief Executive Officer Evan Siddall and other executives.

The severance disclosure is contained in Aimco’s new annual report, which says the firm shelled out a total of C$7.9 million in termination pay for “key management personnel” during the year, a 383% increase from the previous year.

In sacking Siddall and the board, the government accused them of allowing costs to soar as they added new international offices and increased staff. Former Canadian Prime Minister Stephen Harper was named Aimco’s chair and it’s currently operating under an interim CEO, Ray Gilmour. 

Since the November purge, the firm has been in restructuring mode, closing offices in New York and Singapore and laying off staff. Aimco’s total operating costs were C$1.15 billion for the fiscal year ended March 31, slightly above budget.  

Third-party fees of C$689 million were a bit higher than expected, and the firm had unbudgeted costs for closing those two offices, the report said. Aimco had just opened its New York location at One Vanderbilt, a top office property near Grand Central Terminal.

Aimco recently laid off around a dozen employees and decided to freeze around 25 vacant roles, Bloomberg News reported. Earlier, the firm eliminated 19 jobs, including the role responsible for the diversity, equity and inclusion program. It’s searching for a new chief investment officer.

This month, Aimco added former CIO Sandra Lau to its board.

The firm, which manages about C$180 billion of pension money and other capital, produced a 12.6% return last year in its balanced fund, missing its benchmark of 13.4%. Its total fund return was 12.3%. Those results were better than some peers in the so-called Maple Eight, including the Ontario Municipal Employees Retirement System and Ontario Teachers’ Pension Plan. 

Alright, let's get into it, shall we, because I'm tired of posting my thoughts on LinkedIn. 

First, let's have a look at executive compensation at AIMCo for 2023 taken from that year's annual report:

As you can see, former CEO, Kevin Uebelin got a severance of almost $5M in 2021 after the famous "vol blowup" back in 2020 and kept getting paid in 2022 and 2023 almost another $4M in severance even though he didn't work there.

Former CIO, Dale MacMaster, received a severance of $4.4M in 2021 and another $2.6M in severance in 2022 and 2023 even though he didn't work there either those years.

At the time, I remember finding this arrangement weird and reading former Chair's Mark Wiseman comment in the newspaper stating this is "industry standard" irritated me.

Obviously, both Kevin and Dale had a very strong legal case and that's why they were able to extract a pound of flesh from AIMCo after leaving that organization.

The much publicized vol blowup was way overblown because the VIX went to 80 during the pandemic -- something which is a 20 sigma event -- and came back down subsequently. In fact, had AIMCo kept that vol selling program alive, they would have made money but the headline risk was too large so they shut it down fast (it wasn't perfect, that's for sure, but it certainly wasn't as bad as critics claimed).

Now, why were Kevin Uebelin and Dale MacMaster who I consider to be one of the best CIOs ever at the Maple Eight fired (forced to resign)? Because the Government of Alberta was embarrassed and voiced its displeasure and members were equally irate. 

Typically at the large Canadian pension funds, it's rare a CEO gets fired, the board of directors prefers to let their contract run out and when it comes up for renewal, they do not get renewed.

That's how it works 99% of the times, no big fuss, "we thank you for your service, adios amigo". 

Next, have a look at executive compensation at AIMCo for 2024 taken from that the latest annual report: 

I circled the $6.2M former CIO Marlene Puffer obtained as a comp + severance and you can add $423,967 as part of her long-term incentive plan which she also gets since she's leaving the organization. 

In total, that's over $6.6M for a CIO that departed the organization after only 20 months there. 

"Ridiculous", "insane" were the comments people were texting me and at first glance, it's an egregious amount for the time served.

But there's obviously more to this story than meets the eye.

For Marlene Puffer to walk away with over $6M in compensation + severance after exiting the organization after less than two years, it's crystal clear to me she had a solid legal case and AIMCo had to pay her to avoid more damages.

Take note boys and girls, if you have deep pockets and a solid legal case, don't stop till you extract a pound of flesh, and in this case, that's what Marlene did.

To be fair to her, she's also at an age where finding another CIO job at a large Canadian pension fund is next to impossible so that worked in her favour too.

Whatever the case, something was amiss when she was let go and judging by her severance, she made a great case to defend her rights.

Next year, we will find out what former CEO Evan Siddall and former Senior Executive Managing Director, Global Head of Private Assets and Strategic Partnerships David Scudellari are going to receive in severance and I expect it to be another hefty sum.

I knew this was coming after AIMCo was purged and the negative press is distracting and quite frankly, a morale killer. 

Members aren't going to be happy, the public outcry will be loud and Alberta's Government just wants to make this all go away quietly.

Here's is what I initially wrote on LinkedIn:

Severance costs are publicly listed in all annual reports but yes, to the average Canadian making ends meet, this is ridiculous! In my opinion, all of Canada’s Maple Eight should publicly list their severances for each year going back to inception. If they want to be transparent, this shouldn’t be a big issue. Governments and members are paying attention, I can assure you of this. 

Typically, in any annual report, it publicly states "if any senior exec is fired without cause, this is the amount of severance owed to them".

I didn't read this in AIMCo's annual reports which is very odd. 

Anyways, I'm a stickler for transparency, real transparency, not window dressing, and if it were up to me, all Crown corporations would publicly list compensation for all employees and severance amounts doled out each year for all employees that were let go going back to inception. 

The lawyers will tell me it's impossible because of non disclosure agreements (NDAs) but if you ask me there is no way of knowing if there's real meritocracy and a real commitment to diversity, equity and inclusion unless you get compensation transparency including severance packages.

Lastly, I haven't gone over compensation details at all of Canada's large and mid sized pension investment managers but it's coming in September.

I'm on record stating most of the senior execs at Canada's Maple Eight are extremely well paid and they know it which is why they fiercely guard their positions. If they get let go, slim chance they'll get another job that pays as much.

That's not conjecture, that's a fact.

It doesn't mean they aren't good pension fund managers, they all are and the long-term results prove it, it just means there's a limit to how high compensation levels can get at what are Crown corporations.

Sure, they can make a case that they deserve to be paid a lot more than other Crown corporations where government interference is rampant but up to a certain limit.

Having independent governance isn't a free pass to inflate compensation every chance you get, it's a gift and should be used very wisely and judiciously.

That's my opinion so feel free to agree or disagree with me, I  don't have a monopoly of wisdom on everything related to pension funds.

As far as AIMCo, I will circle back on its 2024 Annual Report as I feel it's only fair to cover it properly in a separate comment. 

If you have anything to add, feel free to email me at LKolivakis@gmail.com.

Below, Alberta finally releases results of 2023 pension survey. 

Not surprisingly, only10% of Albertans supported the creation of a provincial pension, according to 2023 survey results recently released. As Sean Amato reports, the NDP says the government should have come clean and abandoned the idea months ago.

Update: On LinkedIn, Josef Pilger, a global pension expert shared this comment:

Interesting outline Leo. The government was prepared to pay $600m in fees for external managers, but focused instead on the ballooning operating costs and compensation. The globally admired Canadian model of direct investment comes at a price on operating costs. But in my experience, this is peanuts compared to the external fee savings and high risk adjusted net returns. Hence, how do we define acting in members and tax payers best interests?

I replied:

Great point, internalizing asset management has saved members and sponsors millions in fees but it doesn’t change the fact they are managing billions in assets of captive clients and are Crown corporations (backed by governments). Therefore, they should be held to the highest standards in terms of transparency and accountability. And just so you know, the direct model is changing, more reliance on strategic partners going forward which means higher fees as assets grow but co-investments will lower fee drag and to do those properly, you need a qualified staff that is paid properly.

I thank Josef for his insights and I'll be back next week. 

Brian Evans and Alex Harring of CNBC report S&P 500 closes at a record Friday, overcoming even more trade angst:

The S&P 500 hit fresh records on Friday as traders managed to look past new comments from President Donald Trump tied to U.S.-Canada tariffs. The broad market index’s rise new highs marks a sharp turnaround from the lows seen in April during the height of trade policy tensions.

The benchmark added 0.52% and closed at a record of 6,173.07. Earlier in the session, the S&P 500 rose as much as 0.76% to a high of 6,187.68, taking out its previous record of 6,147.43. The Nasdaq Composite, which also hit an all-time high and closed at a record, rose 0.52% to 20,273.46. The Dow Jones Industrial Average added 432.43 points, or 1%, settling at 43,819.27.

Stocks pulled back from their session highs after Trump said on Truth Social that trade talks between the U.S. and Canada were being terminated. Initially, investors had bid up equities after Commerce Secretary Howard Lutnick told Bloomberg News late Thursday that a framework between China and the U.S. on trade had been finalized. Lutnick added that the Trump administration expects to reach deals with 10 major trading partners imminently.

Friday’s sharp moves mark the latest episode in which Wall Street tries to navigate an ever-changing global trade landscape.

After rising to a new high in February on hopes for business-friendly policies from Trump, stocks tumbled as the president decided to instead implement stiff tariffs first. At its low in April, the S&P 500 was down nearly 18% for 2025. The benchmark began a stunning comeback after Trump walked back his stiffest tariff rates and the U.S. began negotiations for trade deals.

The S&P 500 is up more than 20% since reaching a nadir on April 8 and now up nearly 5% for the year. Along the way, investors kept buying despite a spike in oil prices spurred by the Israel-Iran conflict and a yield surge on deficit worries. A recovery in the artificial intelligence trade led by Nvidia and Microsoft helped fuel the comeback.

“I can see where the risks are here - if the trade [progress] is just hype from the White House and no deals are really forthcoming, then this market is going to roll over,” Thierry Wizman, global FX and rates strategist at Macquarie Group. “Ultimately, this all comes back to growth in the U.S. economy and growth of earnings.”  

Stocks curtail gains after Trump says U.S. is ending trade talks with Canada

The three major averages trimmed their earlier gains on Friday after President Donald Trump said the U.S. is ending all trade talks with Canada immediately.

The move was in response to Canada’s decision to impose a digital services tax on American tech firms, Trump said in a Truth Social post Friday afternoon.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.” 

Crypto stocks slide into the final weekend of the month and quarter

Crypto stocks slid to end the week amid some potential repositioning for quarterly portfolio rebalancing and general profit-taking heading into the final weekend of a winning month for the sector.

Among the crypto trading providers, Coinbase fell more than 5%, while Robinhood lost 1% and eToro dipped 2%. Crypto financial services firm Galaxy was lower by about 1%. Circle dropped 11%.

Amalya Dubrovsky , Karen Friar and Ines Ferré of Yahoo Finance also report S&P 500, Nasdaq notch record closes, brushing off renewed trade tensions: 

US stocks recovered on Friday afternoon to clinch fresh records despite renewed trade tensions after President Trump said he was terminating talks with Canada.

The S&P 500 (^GSPC) closed at an all-time high for the first time since February. The benchmark index was trading near record territory for much of the session over optimism on the trade front — the US and China clinching a trade truce — and hopes of a rate cut from the Fed sooner rather than later.

The Nasdaq Composite (^IXIC) also notched a record high. Meanwhile, the Dow Jones Industrial Average (^DJI) gained 1%, or about 400 points.

Stocks temporarily took a dramatic turn after Trump posted on social media that he was "terminating ALL discussions on Trade with Canada, effective immediately," citing Canada's digital services tax as the cause. He said he would set a new tariff rate on Canadian goods within the next week.

Markets had gotten a boost on the trade front on Friday after Trump said that the US and China have "signed" a trade deal. The two sides have cemented the tariff truce sealed last month in Geneva, and China has confirmed details of the agreed trade framework, per several media reports.

Under the pact, China has committed to delivering rare earth minerals to the US, Commerce Secretary Howard Lutnick told Bloomberg. Once that is underway, “we’ll take down our countermeasures,” he said.

Also on Friday, Treasury Secretary Scott Bessent on Friday said the US could complete the balance of its most important trade talks by Labor Day, raising hopes that the US wouldn't be firm on its July 9 tariff deadline.

Meanwhile, the Fed's rate path also remained in focus. The latest reading of the Fed's preferred inflation gauge showed price increases accelerated in May as inflation remained above the Fed's 2% target. Fed Chair Jerome Powell has stressed that an uptick in price pressures could be a stumbling block to a rate cut. That report also contained signs of an economic slowdown, however, which could further complicate the emerging debate between.

Fed rate cut and tech boom could lift markets but a choppy summer still looms, analyst warns

Despite recent gains in tech stocks, markets have largely traded sideways for seven months, Yahoo Finance's Francisco Velasquez reports. 

Velasquez writes:

After a roller-coaster first half for US stocks, investors hoping for smooth sailing in the back half of 2025 should hold off on celebrating.

Keith Lerner, co-chief investment officer at Truist, says the technical picture remains bullish, but valuations are stretched, and seasonal volatility could test investor resolve before year-end.

While July is historically a solid month, “August and September tend to be a little more challenging,” he said.

Long-term investors should stay in the market but keep expectations in check, especially as valuations near their ceiling. A softening Fed, steady economic data, and robust earnings from key sectors still underpin the bull case.

Read more here.  

Palantir shares hit a wall as Middle East conflict eases

Palantir stock (PLTR) dropped more than 5% Friday, after President Trump said during the NATO Summit that the conflict in the Middle East was “over" for now.

Trump added, "Can it start again? I guess someday it can. It could maybe start soon." 

Shares of Palantir had soared in early June after announcing a new $463 million contract to provide its AI software to the US Special Operations Command within the US military. The stock continued to rise after Israel first carried out airstrikes on Iran on June 12 and after the US carried out its own bombings on Iran’s nuclear sites later in the month. Palantir provides its AI software to the Israeli Defense Force.

“Shares of PLTR did seem to benefit from the tension and conflict in the Middle East, so with more quiet outlook for the region, PLTR may be giving some of those gains back,” DA Davidson analyst Gil Luria told Yahoo Finance.

In addition to the ceasefire between Israel and Iran, The Washington Post reports that there is a renewed push between Arab mediators and Israeli hostage families to negotiate an end to Israel's war on Gaza.

The drop also comes a day after protesters rallied outside of Palantir’s Palo Alto offices to oppose the company’s work with ICE amid Trump’s sweeping deportations.

In other news for Palantir, the company announced Thursday that it’s partnering with a nuclear power company, The Nuclear Company, to develop AI software to help build plants “faster and safer.” 

Chip stocks set to see growing benefit from rising AI spending, JPMorgan says

JPMorgan analysts said in a report following a survey of 168 chief information officers that artificial intelligence spending is set to jump over the next three years, with positive implications for chip stocks.

According to the survey, AI-related computing hardware as a percentage of CIOs' IT budgets is set to rise to 15.9% in three years from 5.9% currently, the analysts wrote.

“The survey results support our view of a strong multi-year spending cycle in the AI infrastructure build-out and should continue to support sustained strong revenue growth for the AI beneficiaries,” the report said.

Those beneficiaries include chipmakers Advanced Micro Devices (AMD), Broadcom (AVGO), Marvell Technology (MRVL), Micron (MU), Arm (ARM), and Nvidia (NVDA), as well as producers of high-performance networking products for AI data centers such as Astera Labs (ALAB).

The PHLX Semiconductor index (^SOX) has come roaring back since hitting a low in April. The index is up more than 14% over the past month.

Alright, it's Friday and it was another big week in the stock market led by large cap tech names like Amazon, Microsoft and Nvidia: 
But if you look at year-to-date performance, it's Industrials (XLI), Communications Services (XLC), Financials (XLF), Utilties (XLU) and Information Technology (XLK) leading the charge:  In other words, yes, Microsoft and Nvidia are making new record highs but so is JPMorgan, Boeing and a bunch of other companies across all sectors.
 Even more impressively, the move from April lows in some stocks is nothing short of astounding: 
 And there's more, check out Robinhood (HOOD) and Roblox (RBLX) shares this year and how they surged from their April lows:

And remember Cathie Wood and Ark, how her ARK innovation ETF got destroyed after 2021, well, she's had a nice run since April lows:

Of course, if you look at ARK's top holdings, you'll understand why:

Ever since the post Liberation Day selloff, momentum ETFs have been on a rampage:

 And again, it's not just tech lifting these momentum ETFs higher, it's more broad based:

So, where do we go from here? I titled this post "From MOMO to FOMO Rally?" because the moves I am seeing in the stock market across many sectors is nothing short of astounding, almost as crazy as the big 1999-2000 tech rally.

The best way I can describe it is it feels like CTAs and quant funds have taken over the market and they're focusing on large and mid cap liquid names and driving them higher.

Do you chase this rally? A logical person will say the Nasdaq is up 37% from April lows, I'll wait for a nice correction.

But the algos keep hitting the bid, chasing stocks higher, forcing a lot of under-performing institutional funds to chase the high flyers higher.

It's insane and let me be clear, from my vantage point trading stocks, the pain trade remains up. 

Still, valuations are stretched and with earnings season around the corner, and a lot of uncertainty on the economic and geopolitical front, it will be interesting to see if MOMO will drive more FOMO.

It might, we might see a summer melt-up followed by a fall meltdown. Stay tuned!

Below, you'll find the top-performing US large cap stocks and all cap stocks this week (all data from barchart.com):

One last comment on US dollar weakness as people seem hysterical these days:

 

Astute analysts will note that there have been some major deals announced in Europe lately from US alternative fund managers and flows have favoured the euro.

I'm not a big believer that the US dollar is trouble here, it will come back and I wouldn't extrapolate recent weakness too far into the future.

Below, the CNBC Investment Committee debate whether the 'fear of missing out' is driving the market higher. Listen carefully to Bryn Talkington and Stephanie Link, they nail it here.

Stephanie Link and Brian Belski also debate how to trade Nike shares as the stock surges following their Fiscal Q4 report. Again, I agree with Stephanie Link, sell the rip on Nike!

Third, Ed Yardeni, Yardeni Research president, joins CNBC's 'Closing Bell' to discuss market outlooks, reactions to the U.S. terminating trade talks with Canada, and more.

Fourth, Dan Niles, Niles Investment Management founder and portfolio manager, joins CNBC's 'Squawk on the Street' to discuss market outlooks, earnings expectations, and more.

Fifth, Treasury Sec. Scott Bessent joins 'Closing Bell Overtime' to talk the Trump administration announcing it is ending all trade talks with Canada over a digital services tax.

Lastly, earlier this week, Philippe Laffont, Coatue founder and portfolio manager, joined 'Squawk Box' to discuss the latest market trends, state of the 'Magnificent Seven', future of tech investing, his thoughts on bitcoin, state of the economy, impact of AI technology, who'll come on top in the AI arms race, and more.Laffont also discussed he AI arms race, the Fed's interest rate policy, future of TikTok, the NYC mayoral race, and more.

Laffont founded Coatue Management in 1999. He is a so-called Tiger Cub, having spent time working at Julian Robertson's Tiger Management hedge fund. He's one of the best tech investors in the world and all of Canada's large pension funds are his clients. Worth listening to his views and scroll his latest holdings here. Enjoy your weekend!

 Uda Rana of Global News reports the number of Canadians with pension plans jumped by 300K:

An additional 293,500 Canadians enrolled as members of a registered pension plan in 2023, Statistics Canada data released Tuesday showed.

According to a StatCan report, the number of Canadians who were active members of a registered pension plan (RPP) grew by 4.2 per cent to a total of roughly 7.2 million in 2023.

Of these, 4.9 million members were part of a defined benefit plan, which is a type of pension plan in which an employer or sponsor promises a specified pension payment, lump sum or a combination of the two on retirement.

In a defined benefit plan, the pension amount depends on an employee’s earnings history, tenure of service and age, rather than on individual investment returns.

This is in contrast to defined contribution plans, in which the employee’s pension benefits are determined by the size of their pension pot at retirement, rather than by a predetermined formula based on their salary and service.

Employees have control over investment choices, and the benefits are not guaranteed. The number of new members in defined contribution plans rose by 65,300 members, an increase of 5.1 per cent compared with 2022.

The number of Canadians enrolling in pension plans outpaced the employment growth rate. According to the Labour Force Survey, employment grew by 690,844, or 3.8 per cent, during the same period.

More women than men joined RPPs between 2022 and 2023. There were 150,700 more women with membership in an RPP, an increase of 4.2 per cent from 2022 to 2023, taking their number beyond 3.7 million.

The number of men with active RPP memberships increased by 142,800 in 2023 compared with one year earlier, bringing their total membership to just over 3.5 million. Women’s share of active memberships held steady at 51.3 per cent in 2023.

Memberships were up across the country, with all provinces except Manitoba seeing an increase in enrolments. There were 1,300 fewer Manitobans enrolled in RPPs compared with the previous year.

The largest number of new RPP members was in Ontario, which saw 161,800 new members. This was followed by Quebec with 54,800 new members, British Columbia with 32,000 new members and Alberta with 18,700 new members. 

This is good news, more Canadians are now being covered by registered retirement plans (RPPs) and the bulk of these new plans are defined benefit plans.

Moreover, more women than men joined RPPs between 2022 and 2023 and that is also critically important as women have struggled to keep up in retirement and this needs to change.

Last week, I discussed pension expert Sebastien Betermier's thoughts on bolstering Canada's retirement system. 

I also recently discussed HOOPP and Abacus Data's 2025 Canada Retirement Survey. 

Among the key findings:

• Fifty-nine per cent of unretired Canadians do not think they will ever be able to retire due to their financial situation. Half (49%) have not set aside any money for retirement in the past year and 39% have never saved for retirement. 
• Nearly two-thirds (62%) of Canadians view homeownership as a key part of their retirement strategy, either as a financial investment or a source of stability in retirement and as part of their strategy, half (50%) of unretired homeowners plan to rely on the sale of their home to set themselves up for retirement. 
• More than a third (36%) of Canadians report having less than $5,000 in savings, including for retirement, and one-in-five (20%) have no money saved. Those who do not own a home are significantly more likely to have less than $5,000 saved (57% vs. 19% of homeowners). 
• An overwhelming majority of Canadians (88%) would choose to pay 9% of their salary, with contributions matched by their employer, to a DB pension plan in exchange for a lifetime income in retirement. 

It is clear that we lack proper coverage especially in the private sector and until this changes, most Canadians will experience a difficult retirement. 

This week, I was pleased to learn SickKids staff will join hospital workers across Ontario as members of HOOPP: 

The Healthcare of Ontario Pension Plan (HOOPP) and The Hospital for Sick Children (SickKids) are pleased to announce that SickKids employees will become members of HOOPP’s defined benefit pension plan, effective Dec. 29, 2025. This means all hospitals in the province will soon be HOOPP employers.

“HOOPP is one of the strongest and most stable pension plans in Canada and offers its members a secure pension for life,” says Rachel Arbour, HOOPP’s Head of Plan Benefits, Design and Policy. “We look forward to working with SickKids employees over the coming months to help and support them as they transition into HOOPP.”

Susan O’Dowd, Vice-President, Human Resources and Commercial Services at SickKids, notes that the move follows staff feedback about SickKids’ current defined benefit pension plan. “After thorough review and careful consideration, we determined that transitioning all future service into HOOPP is the most viable path forward,” she says. “Enhancing our pension plan and joining HOOPP is not only something many staff have been asking for, but also a logical step for SickKids as it aligns us with the broader sector.”

HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 700 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, physicians and many others who provide valued healthcare services. In total, HOOPP has more than 478,000 active, deferred and retired members.

Almost all active members currently in SickKids’ defined benefit plan will be joining HOOPP for future service, which enables current defined benefit pension plan members to continue to grow their existing SickKids pension, even after the move to HOOPP. While most staff can look forward to an enhanced pension, a small group of staff, who would be disadvantaged by this change, will remain in the SickKids pension plan. “Moving to a ‘future service’ model protects the value of past contributions and service, which retain their full value. While past contributions and past service will remain with the SickKids plan, staff members' years of service with SickKids will also count towards HOOPP’s early retirement calculations.” says O’Dowd.

SickKids staff who have already retired, will retire before the end of 2025, or left SickKids and deferred their pension will receive a SickKids pension only.

“HOOPP offers value and high-quality retirement benefits to workers across more than 700 employers,” says Arbour. “Workers at SickKids are important members of Ontario’s healthcare community and we look forward to helping them build a stronger financial future.”

About the Healthcare of Ontario Pension Plan

HOOPP serves Ontario's hospital and community-based healthcare sector, with more than 700 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, physicians, and many others who provide valued healthcare services. In total, HOOPP has more than 478,000 active, deferred and retired members.

HOOPP is fully funded and manages a highly diversified portfolio of more than $123 billion in assets that span multiple geographies and asset classes. HOOPP is also a major contributor to the Canadian economy, paying more than $3 billion in pension benefits to retired Ontario healthcare workers annually.

HOOPP operates as a private independent trust, and its Board of Trustees governs the Plan and Fund, focusing on HOOPP's mission to deliver on our pension promise. The Board is made up of appointees from the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses' Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU), and the Service Employees International Union (SEIU). This governance model provides representation from both employers and members in support of the long-term interests of the Plan.

About SickKids

The Hospital for Sick Children (SickKids) has been changing the game for paediatric health care since it became the first children’s hospital in Canada in 1875. Affiliated with the University of Toronto, SickKids is one of Canada’s most research-intensive hospitals and has generated discoveries that have helped children globally. Its mission is to provide the best in complex and specialized care; promote a culture centred around patient and family experience; pioneer scientific and clinical advancements; foster an academic environment that nurtures health-care professionals; and champion an accessible, comprehensive and sustainable child health system. In 2025, SickKids is celebrating 150 years of excellence in children's health, continuing to advance Precision Child Health, its groundbreaking movement to deliver individualized care, including responsibly using artificial intelligence to improve clinical care and research. SickKids is proud of its vision for Healthier Children. A Better World. For more information, please visit www.sickkids.ca.

I can't think of a more deserving staff in Canada to join HOOPP.

And there are more potential members for HOOPP, like private radiology clinics across Ontario that are booming (a friend of mine is the radiologist based here in Montreal  that reads most of the cases).

Anyway, the point is we need to fill a gap and address the growing demand for a solid pension that Canadians can count on for life.

In my opinion, the looming Canadian retirement crisis is real and it's a huge policy blunder that federal and provincial governments never adequately addressed it.

HOOPP, OPTrust, CAAT Pension Plan, UPP, IMCO and others are doing their part but a lot more needs to be done.

We can't wait decades for enhanced CPP to kick in, we need to figure out ways to cover more Canadians in the private sector so they can retire in dignity.

I keep saying this, smart retirement policy is smart economic policy over the long run, and it has nothing to do with your political beliefs (I'm a right of center Conservative and strongly believe things need to be drastically changed).

Below, Michelle Munro, Director of Tax and Retirement Research, discusses the results of Fidelity Canada’s 19th retirement report survey where 2,000 Canadians were surveyed coast to coast on their retirement planning (July 2024).

Also, step into the past and explore how SickKids' campus has evolved and expanded since its founding in 1875. From its humble beginnings in an 11-room residential home, the hospital's campus grew to better support the three pillars of the organization: care, learning and research.

Lastly, paediatric health care has long been limited by boundaries, traditions and old ways of doing things. But that’s about to change. "Through our new five-year strategy, SickKids 2030, we’re rewriting the rules. We will no longer accept a world where children’s health is determined by averages and a one-size-fits-all approach."

Like I said, this is an incredible organization and their staff deserve and incredible pension plan that covers them for life.

James Bradshaw of the Globe and Mail reports B.C. pension manager earned 10% annual return on deals in volatile market:

British Columbia Investment Management Corp. earned an average return of 10 per cent for clients last fiscal year, missing its internal benchmark but showing its ability to make deals in a volatile market.

The 10-per-cent return combines the performance of Victoria-based BCI’s six largest pension-plan clients for the year that ended March 31.

In a “heck of a year” marked by upheaval in investing markets, “we had a good year,” Ramy Rayes, the fund’s executive vice-president of investment strategy and risk, said in an interview. BCI added $21.9-billion of investment income after fees.

The internal benchmark BCI uses to measure its performance gained 12.3 per cent. BCI is one of several large Canadian pension funds with broad portfolios of public and private assets that have struggled to keep pace with benchmarks focused on public equities, most notably large U.S. technology companies that have surged in value.

Over 10 years, BCI has earned an average annual return of 7.4 per cent, ahead of its benchmark of 7.1 per cent.

BCI now manages $295-billion of gross assets, compared with $250-billion a year earlier. After subtracting real estate debt and other liabilities, BCI’s net assets are $251.6-billion.

Many large investors have lamented the uncertainty plaguing markets, which has dampened deal-making and made it a hard year to put money to work.

By contrast, “we had quite a year in terms of deployment” of capital, Mr. Rayes said.

“People think the market is kind of jammed and low deal activity. We’re not seeing that,” he added.

BCI’s private-equity group, which earned a 13.4-per-cent return, made $2.2-billion of new investments and sold two of the largest assets in its portfolio: a stake in internet provider Ziply Fiber, which sold for $5-billion to Bell Canada parent BCE Inc.(BCE-T), and a 60-per-cent stake in European alternative asset manager Hayfin Capital Management.

The fund’s infrastructure and renewable-resources portfolio, which gained 8.3 per cent last year, made $5.1-billion of new investments, including taking BBGI Global Infrastructure SA private for $1.9-billion.

“We stayed active,” Mr. Rayes said. “We’re seeing so many opportunities right now, good opportunities, I would say at good value.”

The lone portfolio that lost money for BCI was its equity investments in real estate, which fell 1.8 per cent as assets were marked down in value. The real estate debt arm earned a 6.1-per-cent return.

Fewer of BCI’s new investments have been in the United States, where 39 per cent of the pension fund’s assets are invested, as uncertainty over tariffs and potential tax changes shifts the balance of risk and return.

“In some cases it’s been challenging to deploy in the U.S. and we’ve been prudent, and we’ve put things on pause at BCI,” Mr. Rayes said.

That is partly because of potential U.S. tax changes that would significantly raise tax bills for foreign investors. Senators have pushed to delay the implementation of the tax until 2027, but Canadian pension funds eyeing new, long-term investments have started to factor the tax into their decisions anyway.

“We price it in,” Mr. Rayes said, echoing recent comments by Canada Pension Plan Investment Board CEO John Graham.

“It doesn’t mean that we’re stopping investing [in the U.S.] but we’re certainly intentionally creating new partnerships in Europe and Asia,” Mr. Rayes added. “We want to make sure that we have a good, diversified portfolio.”

Even though BCI missed its fiscal-year benchmark, Mr. Rayes said he trusts that the pension-fund manager’s allocations to private-equity investments and other private assets will match up over the longer term.

“I don’t believe public equity will do 30-per-cent returns over 10 years. I really don’t,” he said, referring to outsized stock market gains driven by shares in major U.S. tech companies.

“I feel comfortable with it, but it does create that noise on a shorter-term period.”

Layan Odeh of Bloomberg also reports B.C. pension giant taps uncertainty in market to ink 45 deals in six months: 

British Columbia Investment Management Corp. (BCI) signed 45 deals during the past six months as the pension fund manager exploits the uncertainty in the market.

The public pension manager began its new fiscal year in April with ample liquidity after a series of asset sales, giving it dry powder to invest across a number of asset classes, according to a senior investment strategist.

“We have room to deploy,” Ramy Rayes, executive vice-president of investment strategy and risk, said. “While others might be stalling, we see good opportunities and good value, too.”

BCI announced this week the closing of a £1 billion take-private deal for Luxembourg-based BBGI Global Infrastructure SA — the first time it has done a privatization as the sole investor. The fund also bought Maple Leaf Self Storage, a chain based in western Canada.

Overall, the pension fund manager returned 10 per cent in the fiscal year, missing its benchmark of 12.3 per cent and bringing net assets to $251.6 billion, according to a statement Wednesday.

The fund’s infrastructure holdings notched an 8.3 per cent gain in the fiscal year ended March 31, while investments in private equity and private debt earned 13.4 per cent and 10.2 per cent, respectively.

The private equity unit made two sales in the secondary market, fetching $1.6 billion in proceeds. BCI also was an investor in Ziply Fiber, the United States broadband internet company that’s being acquired by BCE Inc. for $5 billion.

BCI cut its U.S. exposure to about 39 per cent last year from 43 per cent the previous year as it sold part of its equity portfolio, which is heavily tilted toward the country, Rayes said. The pension fund manager is also allocating capital to regions such as Europe and Asia amid U.S. President Donald Trump’s erratic trade policies.

Rayes said uncertainty about the world’s largest economy means investors will either bid lower for assets or require higher growth to compensate. “We might start underwriting a transaction in the beginning of the year — things change, the uncertainty increases and you get out,” he said. “Pens down on the transaction.”

While Trump’s proposed so-called revenge tax has been delayed and revised by the U.S. Senate, it adds another layer of complexity. Known as Section 899, the provision has non-U.S. investors worried that it could make investing in the country more expensive.

BCI has done its own scenario analysis on the so-called revenge tax. “For our total portfolio at BCI, we could have an impact of 15 basis points as it stands today,” Rayes said, but it’s unclear and the number would vary depending on the structure of the investment.

BCI, which invests the retirement savings of British Columbia’s public sector workers, increased its exposure to Canada by seven percentage points to 37.8 per cent during the year. That was driven by an increased allocation to government bonds, private debt and real estate. Rayes said BCI would be interested in investing in Canadian infrastructure, such as airports.

BCI decided to “start moving within the capital stack,” investing more in infrastructure debt, convertible preferred shares within private equity and asset-backed loans, he said.

“Right now being just in the equity sleeve or just purely in the debt sleeve may not get you the perfect risk-adjusted return,” Rayes said. Hybrid assets offer the chance to maximize returns and create downside protection, he said.

Earlier today BCI released its results stating it achieved 10% annual return in fiscal 2025:

Marks 25th anniversary by delivering $9.3 billion in added value since inception

VICTORIA, BC — June 25, 2025 — British Columbia Investment Management Corporation (BCI) today announced an annual combined pension plan return¹ of 10 per cent for the fiscal year ended March 31, 2025. The combined pension plan return represents the performance of BCI’s six largest pension clients by assets under management (AUM).

Gross AUM² grew to $295 billion with net AUM totalling $251.6 billion. Investment income contributed $21.9 billion net of all fees to AUM growth, demonstrating the strength of BCI’s diversified investment approach.

“Despite the severe market turbulence leading up to our March 31 year-end, we did an excellent job in fiscal 2025 rolling out a resilient, defensive-leaning investment strategy closely aligned with our clients’ long-term investment needs,” said Gordon J. Fyfe, BCI’s Chief Executive Officer and Chief Investment Officer.

BCI continues to deliver annualized long-term returns that exceed clients’ actuarial discount rates. Over the five-year period, BCI returned 8.9 per cent and 8.6 per cent over 15 years. Since inception, BCI has delivered $9.3 billion in cumulative value add, demonstrating the strength and resilience of its well-diversified investment strategy. BCI repeatedly delivers sustainable value for its clients, regardless of market volatility or economic uncertainty.

“BCI’s long-term performance has enabled our pension clients to remain in surplus positions, with funding ratios ranging from 103 to 133 per cent,” added Fyfe. “As we continue to face market uncertainty, we are actively modelling client portfolios against a range of risk scenarios. In all market conditions, great deals can still be found, and we continue to leverage our strong liquidity position to transact across asset classes globally.” 

Strong Performance Across Asset Classes 

All asset classes generated positive returns except for Real Estate Equity, which faced continued market headwinds despite modest interest rate cuts. Public Equities, Fixed Income, and Private Equity were the largest contributors to total performance during the fiscal year.

Within Public Equities, absolute return strategies generated strong results during a period when active equity managers faced headwinds. These strategies aim to provide consistent positive returns regardless of market conditions. Since inception in fiscal 2020, they have achieved a 16.1 per cent annualized return.

The Fixed Income portfolio delivered robust returns through active interest rate positioning and strong credit selection. The Corporate Bond Fund grew to $18.5 billion in net AUM, while the Principal Credit Fund expanded to $19.4 billion in net AUM. The Fund broadened its offerings by introducing asset-backed lending (ABL) through three new strategic partnerships, providing enhanced downside protection and attractive risk-adjusted returns. With shorter loan durations and increased flexibility, ABL strengthens portfolio resilience and offers stability and opportunity during periods of market volatility.

BCI Private Equity delivered strong results despite challenging market conditions. The team executed $2.2 billion in new investments and announced significant exits, Hayfin Capital and Ziply Fiber3, two of its five largest assets. It also generated $1.6 billion in proceeds from the completion of two secondary sales.

BCI Infrastructure & Renewable Resources experienced 18 per cent net AUM growth for the calendar year. In fiscal 2025, the group originated and executed $5.1 billion in new investments. The asset class delivered excellent total returns despite turbulent markets and geopolitical stress. Notable transactions included the take-private of BBGI Global Infrastructure S.A. and two key investments which support the energy transition economy, Renewi PLC, a recycling company, and Shepherds Flat wind project, one of the world’s largest windfarms.4

BCI’s Real Estate investments demonstrated resilience and strategic positioning in tough market conditions. The Real Estate Debt portfolio delivered a positive return due to strong asset selection and active management. Real Estate Equity produced the lone negative result, due to market-driven valuation adjustments coming from higher interest rates rather than realized losses. Strong portfolio fundamentals and positive income supported overall performance, with stable occupancy rates and rent growth experienced by industrial, alternative, and residential sectors. 

Committed to Responsible Investing 

During the fiscal year, BCI continued making strong progress in responsible investing. Highlights for the year included surpassing $6 billion in cumulative sustainable bond participation, exceeding BCI’s 2025 expectation of $5 billion, hosting BCI Private Equity’s inaugural ESG Value Creation Conference, and achieving a 100 per cent score from the Global Sovereign Wealth Fund’s Governance, Sustainability and Resilience Scoreboard. 

BCI’s Ecosystem5 

The effects of BCI’s operations extend far beyond investment returns. In 2024, the organization’s ecosystem contributed $24.4 billion to British Columbia’s provincial GDP, representing 5.9 per cent of the province’s economy. This impacted 1 in 10 British Columbia households and supported the creation of 225,800 jobs provincially and an additional 8,000 jobs nationally, generating $12.2 billion in wages for workers across all age groups.

For more corporate highlights, including BCI’s focus on sustainable growth, innovation, and operating on a global scale, read the 2024-2025 Corporate Annual Report released today. 

Please refer to our Annual Report for additional details, which may supplement or supersede the information provided herein.

All figures are in Canadian dollars unless otherwise stated.

¹ The combined pension plan clients reflect the investments of BCI’s six largest pension clients: BC Hydro Pension Plan, College Pension Plan, Municipal Pension Plan, Public Service Pension Plan, Teachers’ Pension Plan, and WorkSafeBC Pension Plan.

² Gross assets under management include all investment assets, before deducting Real Estate Debt and Equity recourse debt directly issued by QuadReal Property Group, BCI and QuadReal Property Group Real Estate Debt and Equity uncollateralized derivative liabilities, and BCI’s Funding Program liabilities.

3 Transaction has been announced but not yet closed; remains subject to satisfaction of closing conditions, including regulatory approvals.

4 Transactions were signed before BCI’s March 31 year-end but closed during the first quarter of the subsequent fiscal year.

5 These figures come from a 2024 Canadian Centre for Economic Analysis study and show the economic activity supported by BCI’s payments, its clients, operations, and investments during its fiscal year ending March 31, 2024. The study focused on BCI’s economic contributions and does not compare different retirement or insurance plan options.

Alright, BCI is the last of the Maple Eight pension funds to report its results.

The results were in line with what others reported with gains primarily coming from Global Public Equity (mainly US, 14.3%),  Private Equity (13.4%), Private Debt (10.2%) and Infrastructure & Renewable Resources (8.3%).

I would have liked to discuss the results with CEO/CIO Gordon Fyfe but he's never around when results are released (goes on vacation) and BCI's Comms team didn't contact me to set up an interview with Ramy Rayes, Executive Vice President, Investment Strategy & Risk, with whom I've spoken within the past (very nice guy featured above).

Communications was never BCI's strong suit so I was glad Ramy spoke to a couple of reporters today to give some tidbits into their thinking and strategy.

Still, this blog is the best platform in the pension investment world and in my opinion, those who do not partake and support it show great disrespect to their members, not to me (I couldn't care less, I'll continue covering their activities).

Let me jump into it. Take the time to read BCI's annual report here (click on the PDF icon next to the question mark at the top to read the PDF file, much easier and faster to jump within and between sections).

The annual report is well written and easy to read.

Let me go over the main things starting with BCI's asset mix:

As you can see, Fixed Income (34%) and Public Equities (24%) make up 58% of the total assets.

Here, it's worth noting that even though BCI has shifted assets into private markets over the last ten years since Gordon Fyfe arrived as CEO (in June 2014), the bulk of the assets remain in public markets because BCI manages assets of mature plans relative to its Maple Eight peers and needs liquidity (which they manage carefully) to pay out pension benefits.

Next, let's look at geographic exposure:

 

Not surprisingly, the bulk of BCI's assets are in the US (39%) and Canada (38%), with Europe (13%), Emerging Markets (8%) and Asia Pacific (3%) making up the rest.

BCI's higher weighting in domestic assets relative to its large Canadian peers is due to legacy issues (they used to have all their real estate assets in Canada before diversifying outside of Canada through a deal with RBC Asset Management) and they have a lot of Canadian bonds (again, they manage assets of mature pension plans and need that liquidity to pay benefits).

Next, read Chair Peter Milburn's letter:

I note the following:

Over the years, BCI has built a resilient investment program designed not just to withstand volatility, but to adapt to it. While the current macroeconomic environment has been volatile and increasingly uncertain, BCIs long-term approach and experienced leadership provide a steady hand. Those guiding the organization today have led through past market disruptions and continue to be focused on long-term, sustainable growth and value creation.

As I reflect on fiscal 2025, the BCI Board continued to focus on enabling BCI’s success in the  increasingly complex environment we faced. Regulatory expectations for pension funds are evolving, and strong governance remains central to our oversight role. This year the BCI Board undertook an external effectiveness review, reaffirming our commitment to strong governance and continuous improvement. We also continued to strengthen our environmental, social, and governance (ESG) frameworks to better align with global standards and growing client expectations, and refined our approach to risk and strategy. These activities prepare the organization to successfully navigate future challenges and opportunities as we have in the past.

People are at the heart of BCI’s success, and the BCI Board supported ongoing investment in talent development and the organization’s commitment to equity, diversity, and inclusion, ensuring it remains a place where top talent can excel as we deliver on our purpose. 

I can't speak to BCI's commitment to equity, diversity and inclusion but judging from all their posts on LinkedIn, it seems they do take it seriously (a bit overkill on LinkedIn, everyone needs to give it a break).

Next, let's go over CEO/CIO Gordon Fyfe's letter:

 

I note the following:

Nearly all asset classes delivered strong results, in both absolute and relative terms. Our Private Debt and Infrastructure & Renewable Resources assets were noteworthy performers. Over the course of the fiscal year, these programs increased their focus on high-growth Asian markets with Private Debt seeking investment opportunities with attractive yields and diversification benefits, while Infrastructure & Renewable Resources made its first direct investment in Japan.

Private Equity and Real Estate Equity underperformed their respective benchmarks. Although Private Equity delivered a robust 13.4 per cent return, it missed its 30.1 per cent benchmark which was driven by strong public equity returns and the Magnificent Seven AI-related companies. BCI’s Real Estate portfolio, managed by QuadReal, also underperformed its 6.8 per cent absolute return benchmark by 8.5 per cent, though it remained impressive compared to Maple 8 peers in these difficult market conditions.

From a longer-term perspective, BCI continues exceeding actuarial discount rates, with client funding ratios ranging from 103 to 133 per cent. However, given the lingering uncertainty around global trade and the investment environment, we may face several tough years ahead. We are closely monitoring developments, actively modelling client portfolios against potential scenarios, and briefing clients on risk-reduction strategies designed to help mitigate geopolitical and trade uncertainty impacts.  

All of BCI's clients are fully funded, some more than others, but as Gordon warns, given the lingering uncertainty, tougher years may lie ahead.

He notes Private Equity underperformed its benchmark last year by a wide margin because of the Mag-7 dynamics dominating the S&P 500 and Real Estate managed by QuadReal also underperformed its absolute return benchmark by 8.5% but was still impressive compared to Maple Eight peers (I'd say some peers performed better than others).

Anyways, I'm not going to get into private equity and real estate benchmark issues, I know too much on the subject and suffice it to say there's no perfect benchmark so best to judge absolute and relative performance over a longer time period (5,10, 20 years if data is available). 

I did note this on BCI's Private Equity performance last fiscal year from their press release:

BCI Private Equity delivered strong results despite challenging market conditions. The team executed $2.2 billion in new investments and announced significant exits, Hayfin Capital and Ziply Fiber3, two of its five largest assets. It also generated $1.6 billion in proceeds from the completion of two secondary sales. 

So timely distributions realizing nice gains and two secondary sales made up the bulk of the returns there.

In Infrastructure and Renewable Resources, I note this from the press release:

BCI Infrastructure & Renewable Resources experienced 18 per cent net AUM growth for the calendar year. In fiscal 2025, the group originated and executed $5.1 billion in new investments. The asset class delivered excellent total returns despite turbulent markets and geopolitical stress. Notable transactions included the take-private of BBGI Global Infrastructure S.A. and two key investments which support the energy transition economy, Renewi PLC, a recycling company, and Shepherds Flat wind project, one of the world’s largest windfarms.4 

This group was extremely busy last fiscal year and Gordon noted this in his letter:

This year, we released a new three-year business plan, focused on three ambitions: Driving Sustainable Growth, Accelerating Innovation, and Operating on a Global Scale. In pursuit of the latter ambition, we continue to expand our footprint globally. In fiscal 2025, we established a new European Private Equity hub in London, which will strengthen access to deals and help attract talent, while equipping us to operate in closer proximity to our already sizeable holdings in the region. About $11.5 billion of BCI’s $33.6 billion Private Equity portfolio is currently invested in Europe, while more than 50 per cent of our Infrastructure and Renewable Resources assets are outside North America.

In an era of great volatility and restructuring of international trade relations, diversification and adaptability become crucial for long-term portfolio resilience. Beyond our growing New York and London offices, we now maintain a small Mumbai team overseeing investments in India, the Philippines and Middle East, while scouting out ASEAN opportunities. 

Let me wrap it up there, take the time to read BCI's annual report here. 

I would have appreciated a long and detailed discussion with Ramy but it didn't happen (BCI's members lose out, not me). 

Below, BCI's Head of Global Private Equity, Jim Pittman, discussed trends he sees in the industry at the Milken Conference a month ago:

Pittman highlighted that while 2021 saw a record US$1.2 trillion in deals sold, 2024’s figure plummeted to just US$250 billion, pointing to a confluence of factors including inflation, geopolitical risk, and supply chain disruptions. All panelists agreed: “Nothing kills M&A activity more than uncertainty.”

After several years marked by sluggish distributions and a backlog of aging portfolio companies, 2025 is showing signs of renewed activity. Panelists expressed cautious optimism that, as volatility decreases, the IPO market could see significant improvement. Strategic corporate buyers are also showing early signs of renewed M&A interest. This optimism is supported by industry data, with global exit values rising 34% year-over-year and exit counts up 22%, according to a recent Bain report, signaling that pent-up demand is beginning to translate into real deal flow.

Pittman’s commentary reflected a broader industry push to unlock liquidity for limited partners (LPs) after several lean years. He pointed to the growing relevance of the secondary market and continuation funds as alternative paths for exits. GPs are also looking at other ways of unlocking liquidity through “componentized sales” – selling off portions of their holdings to unlock liquidity. One GP emphasized the importance of considering multiple exit strategies: “Less than 20 per cent of [their] realisations now come from IPOs. Over 50 per cent come from some type of strategic sale, such as large corporate buyers.”

The panel also highlighted a healthy pipeline of investments at attractive valuations. “I’m super excited about the buyer’s market. We’re buying things 50% off or more-pricing we haven’t seen since the global financial crisis,” remarked one panelist.

Pittman reinforced that BCI is actively seeking opportunities in sectors with strong fundamentals and operational value creation potential. He noted that BCI remains active, having sold three companies and acquired three others in the past eight months. In the past year, BCI Private Equity unlocked C$2.8 billion of capital through asset sales, successfully generating liquidity and securing strong realized returns as a result of the program’s focus on active portfolio management. The sale of BCI’s majority stake in Hayfin Capital and the announced sale of our investment in Ziply Fiber are two recent examples, in addition to secondary fund sales.

Watch the panel discussion below which is also available here along with more key takeaways.

Great discussion, all the panellists are smart and experienced and offer unique insights. KKR's Alisa Amarosa Wood is particularly impressive and she really nails it on a few points, including dispersion of returns in the private equity industry and getting the right alignment to drive value creation at their portfolio companies.

Update: On Monday, July 7th, BCI posted and interview where CEO/CIO Gordon J. Fyfe shares how BCI has evolved over the years, where we stand today, and his vision for the future. Watch the video to discover the journey and what’s next for BCI.

 

Zak Bentley of Infrastructure Investor reports AIMCo's Ben Hawkins on the success of AirTrunk sale and midstream performance: 

Amid all the headlines surrounding September’s Blackstone-led A$24 billion ($15.4 billion; €13.6 billion) acquisition of data centre group AirTrunk, was a Canadian institutional investor success story. PSP Investments was one of the original acquirers in 2020, alongside Macquarie Asset Management, while CPP Investments would join Blackstone in the new ownership consortium.

However, compatriot sovereign wealth fund Alberta Investment Management Corporation was a winner of the process, albeit a more silent one. AIMCo had co-invested with Macquarie back in 2020 and five years later was left counting a “substantial” return that exceeded underwritten expectation, according to Ben Hawkins, AIMCo’s executive managing director and global head of infrastructure, renewable resources and energy transition.

Hawkins declined to state exactly what “substantial” meant, although sources have told Infrastructure Investor that it could be as much as about 30 percent.

“We bought into the thesis that AirTrunk would be able to potentially grow in a fairly rapidly growing broader data center market, but also in a rapidly growing part of the world, and one which is actually pretty difficult to be successful in developing data centres,” Hawkins told Infrastructure Investor.

“Ultimately, the pandemic hit and created some tailwinds and then AI fuelled growth beyond that. When I think about that type of co-investment opportunity, it was an interesting mix of relatively straightforward infrastructure, cash-producing assets with15-year contracts but where the platform value has the potential of providing significant upside.”

As for future similar opportunities, Hawkins remains cautious, warning that parts of the data centre market are reminiscent of the renewable power market from years gone by.

“We think there’s interest and opportunities, but spend a lot of time really looking at the fundamentals as much as we can to try to evaluate the gap between the narratives that are being priced in in various places and just how much of a constraint power is,” he stated. “It does raise some questions just as to what really can be practically delivered in some of these markets and just highlights how critical having some answers to those questions are to continue to realise on this story.”

Still, Hawkins again acknowledged the fundamentals and said the market “certainly could have the potential to have a lot more room to surprise”.

AirTrunk, Hawkins said, was one of the stronger performing assets last year for AIMCo, whose infrastructure portfolio delivered a 12 percent return, it said last month, with a 12.7 percent return delivered over the last four years.

Other highlights were in the midstream sector, such as the 416 mile-long Coastal GasLink Pipeline in British Columbia, which it owns alongside KKR, and its 87 percent stake in midstream platform Howard Energy Partners.

“We’ve been big believers in natural gas as a long-term transition fuel for a long time and I don’t know if the market had fully endorsed our view through the last five years, but it definitely feels like they’ve come around in the last couple,” Hawkins said.

Coastal GasLink was a significant construction project, which reached mechanical completion in November 2023, while Howard Energy is a portfolio of operational pipelines.

“We don’t take the underlying commodity risk but look to a variety of contractual structures which provide a floor to the contracted volumes, but then also benefit when those volumes uptick,” Hawkins explained. “Both those elements deliver on value as you’d expect, it’s supposed to be infrastructure, but we like infrastructure which has a little bit of upside to it as well.”

Another highlight was one of AIMCo’s more recent investments: its 2022 acquisition of rail haulage group Cando Rail, based in Canada.

“They’ve been able to outperform what the normal GDP story would imply, but they’re also looking at further growth opportunities, so are hoping to expand that business model going forward,” Hawkins added.

Partnership model

The model through which AIMCo made its AirTrunk investment is relatively uncommon for the Canadian institution. Direct investments remain its primary investment approach, with about 85-90 percent of deals done on a direct basis, despite the co-investment success with Macquarie.

It has about C$19.8 billion ($14.3 billion; €12.7 billion) in infrastructure under management, comprising about 12 percent of the fund’s total portfolio.

“We came to realise that there were deals or regions in the world where we weren’t really as well-equipped to do direct deals and digital is one of those where we really value third-party managers, and in Asia as well,” Hawkins maintained.

“Co-investments are an important part of our broader strategy, but we’re highly selective, so there’s only a handful of managers that we work with and really try to find those which can complement what we do on a direct deal basis.”

However, AIMCo has found new deals difficult to come by, a theme going back about two years, and that has meant a repositioning of its focus.

“By and large, we’re trying to leverage our existing portfolio companies where we can to look to them as platforms,” Hawkins said.

“Our underlying portfolio companies have capabilities that we don’t have in-house, so we’re talking about their sector-specific expertise, boots on the ground and the broader capabilities and ability to source proprietary dealflow that wouldn’t necessarily come to us. They could be more organic in nature or bolt-on acquisitions that don’t really get a lot of attention, but in some ways that’s what makes it more interesting when they can pull that off.”

Riding the volatility

The difficulty in the search for new deals isn’t helped by today’s volatile market situation, a dynamic Hawkins said is shared by his fellow private markets colleagues.

“It feels like a lot of sellers have pulled their processes and are waiting for some of the uncertainty to dissipate, although I think infrastructure is, for the most part, pretty well insulated from some of the tariff noise and ideally where there’s inflation protection, even protected from some of the indirect consequences of some of the tariff uncertainty,” Hawkins maintained. “It still has had a bit of a chilling effect just in terms of transactions.”

Canada, of course, has been at the forefront of trade tensions with the US. Hawkins said about 10 percent of AIMCo’s infrastructure portfolio is in Canada, while close to half resides in its southern neighbour. Hawkins is bullish that the institution hasn’t had heightened concerns as a result of this and won’t be changing course.

“The US is just too important of a market to really be looking to adjust our approach, focus or even portfolio for that matter,” he said. Hawkins added that AIMCo is focused on redeploying capital from its AirTrunk sale in Asia, while it is still trying to find a new home in Europe for capital received from the sale of Spanish IPP Eolia Renovables to Engie in November 2021.

Back in Canada, the federal government in March opened up the possibility of bringing Canadian pension funds and institutional investors investing in the country’s airports. Would AIMCo, having been part of a Canadian-dominated consortium owning London City Airport since 2016, be interested?

“I think that could be really interesting to Canadian pension investors and probably much broader than that as well, and could be pretty sizeable. One could easily see a number of really large consortiums looking to participate,” he responded.

“That all said, it really comes down to the circumstances behind that, and it’s really hard to say when or if this comes together. I think if it ever did, I think you could see a pretty hotly contested process for parties trying to find a way into some of the larger assets and more strategic locations.”

Alright, this is an excellent interview with AIMCo's Ben Hawkings who I like and interviewed back in November 2022 (read my comment here).

I also covered Blackstone and CPP Investments's acquisition of AirTrunk for A$24bn here and at the time, the press releases stated the sellers were Macquarie Asset Management (MAM) and the Public Sector Pension Investment Board (PSP) so I didn't know AIMCo also co-invested in the initial acquisition of AirTrunk along with PSP.

As a reminder, back in April 2020, Macquarie Infrastructure and Real Assets (MIRA) led a consortium to buy an 88% stake in the A$3bn (€1.7bn) data centre firm AirTrunk.

The consortium, led by Macquarie Asia Infrastructure Fund 2 and including other MIRA-managed partners, acquired its stake in the business from Goldman Sachs, Sixth Street Partners and founder, Robin Khuda.

Obviously PSP Investments was the major co-investor on that deal and AIMCo a minor one but both organizations realized big gains when Blackstone and CPP Investments bought AirTrunk for A$24bn. In just five years, Macquarie, PSP and AIMCo made great returns on AirTrunk.

And the red hot data centre space is showing no signs of abating, so I'm sure Blackstone and CPP Investments will also make great returns on AirTrunk.

Macquarie raked in A$1.3bn in performance fees on the sale and moved on.

Less than a month after selling its majority stake in AirTrunk, Macquarie Asset Management agreed to provide up to $5 billion in funding for US data centre startup Applied Digital.  

In any case, both PSP and AIMCo made great returns on the sale of AirTrunk and PSP's CEO Deb Orida told me that being first mover in data centres really helped.

Back to Ben Hawkings, the article states he remains cautious, warning that parts of the data centre market are reminiscent of the renewable power market from years gone by:

“We think there’s interest and opportunities, but spend a lot of time really looking at the fundamentals as much as we can to try to evaluate the gap between the narratives that are being priced in in various places and just how much of a constraint power is,” he stated. “It does raise some questions just as to what really can be practically delivered in some of these markets and just highlights how critical having some answers to those questions are to continue to realise on this story.”

Still, Hawkins again acknowledged the fundamentals and said the market “certainly could have the potential to have a lot more room to surprise”.

Ben also states co-investments with a handful of strategic partners is how they capitalize on opportunities all over the world, especially in Asia (where their office in Singapore was closed so they need strong strategic partners).

Another thing I found interesting is how they're trying to leverage off their existing portfolio companies to use them as an extension of their investment team:

 “Our underlying portfolio companies have capabilities that we don’t have in-house, so we’re talking about their sector-specific expertise, boots on the ground and the broader capabilities and ability to source proprietary dealflow that wouldn’t necessarily come to us. They could be more organic in nature or bolt-on acquisitions that don’t really get a lot of attention, but in some ways that’s what makes it more interesting when they can pull that off.”

On tariffs, he rightly notes that infrastructure is largely insulated and has embedded inflation protection but nonetheless, transactions have slowed considerably:

“It feels like a lot of sellers have pulled their processes and are waiting for some of the uncertainty to dissipate, although I think infrastructure is, for the most part, pretty well insulated from some of the tariff noise and ideally where there’s inflation protection, even protected from some of the indirect consequences of some of the tariff uncertainty,” Hawkins maintained. “It still has had a bit of a chilling effect just in terms of transactions.”

Alright, excellent interview with Ben Hawkings who is an excellent investment manager at AIMCo and a very nice and decent guy. Glad he's still around.

In other AIMCo news, Layan Odeh and Paula Sambo of Bloomberg report that they're looking for a new CIO amid push to expand Calgary office:

Alberta Investment Management Corp. is hunting for a new chief investment officer as it carries out an overhaul that began last year when the provincial government fired the board and its top executive.

The new CIO would be based in Calgary, the largest city in Alberta and the home of Canada’s major oil and gas companies. Edmonton-based Aimco is considering both internal and external candidates, according to people familiar with the matter, asking not to be identified because they weren’t authorized to speak publicly.

Four people held the CIO title at Aimco in less than four years. The most recent, Marlene Puffer, departed in September.

Aimco, which manages about $180 billion of pension capital and other money for the Canadian province, wants to increase its staff in Calgary to boost the city’s financial sector. Newly appointed Chief Legal Officer John Walsh works out of the Calgary office, which has about 70 of Aimco’s 680 employees.

“The size of the team in Calgary has grown and we’re looking for space to accommodate them,” Aimco spokesperson Carolyn Quick said.

The firm is also changing its remote-work policy, requiring employees to work from the office three times a week starting in January, the people said.

Aimco’s restructuring was set in motion on Nov. 7, when Alberta’s finance minister sacked the board, Chief Executive Officer Evan Siddall and three other executives, saying they had allowed expenses to soar to unacceptable levels. Ray Gilmour was named interim CEO and Stephen Harper, the former Canadian prime minister, was installed as chair.

Since then, the money manager’s global expansion, championed by Siddall, has reversed. It shuttered its offices in New York and Singapore and parted ways with David Scudellari, its global head of private assets, and Kevin Bong, the executive who ran the Singapore office.

Last month, Aimco laid off around a dozen employees and decided to freeze around 25 vacant roles, according to one of the people. Earlier this year, Aimco eliminated 19 jobs, including the role responsible for the diversity, equity and inclusion program.

Aimco produced a 12.6% return last year in its balanced fund, missing its benchmark of 13.4%. Its total fund return was 12.3%. But the fund’s results exceeded those of some peers in the so-called Maple Eight, such as Ontario Municipal Employees Retirement System and Ontario Teachers’ Pension Plan, which last year earned 8.3% and 9.4%, respectively.

Canada’s largest pension funds are under pressure to consider investing more in the domestic economy as the US wages a tariff war against its closest trading partners.

In addition to Edmonton and Calgary, Aimco has offices in Toronto, London and Luxembourg. 

Let me be brief here. The best CIO AIMCo ever had was Dale MacMaster and never mind the much publicized vol blowup, he was exceptional and I talk to all of them. 

I think there are excellent CIOs who can easily work out of the Calgary office but I'm a bit perplexed as to why they're not looking to first hire a CEO as Ray Gilmour was named interim CEO.

In my opinion, proper governance is you hire a CEO who is then in charge of hiring a CIO that reports to him or her. 

It's sad to see more people were let go at AIMCo and I really hope all these cuts are justified and won't hurt the organization. 

Let me end it there, it was a bit a whirlwind weekend and hard to believe that at this writing, Trump has announced a ceasefire between Iran and Israel.

Below, Mark Esper, Fmr. Secretary of Defense, joins 'Closing Bell Overtime' to talk Iran's latest missile strike on US targets in the Middle East. Next, President Trump said on Monday afternoon that Iran and Israel have agreed to a ceasefire between the two nations that have been exchanging air and missile strikes for over a week now. Iran launched a missile attack at a US base in Qatar today, after the US attacked Iran nuclear sites over the weekend with B2 Spirit bombers.

Also, Fox News chief political anchor Bret Baier breaks down what led to President Donald Trump announcing a ceasefire agreement between Israel and Iran on 'The Ingraham Angle.'

Iran’s Foreign Minister Seyed Abbas Araghchi on Monday refuted claims that Tehran had agreed to a US-brokered ceasefire deal with Israel, while signaling his country was ready to stop hostilities. 

Let's hope this war ends fast and better days lie ahead for the Middle East. 

On Thursday, I had a great discussion on emerging markets with Varun Laijawalla, portfolio manager at global investment manager Ninety One:

Varun is a co-portfolio manager for the Emerging Markets Equity and Emerging Markets ex China Equity strategies in the 4Factor team at Ninety One. Prior to joining Ninety One, he was vice president of Asia ex-Japan Equity Sales at Macquarie Capital Securities, and was based in Hong Kong for 5 years. Varun started his career in London at Corporate Value Associates, where he consulted blue-chip corporates in the Financial Services sector. Varun holds an MBA from INSEAD with a specialization in Finance. He earned a degree in Bachelor of Science in Management from the University of Warwick.

I want to thank Varun for taking the time to talk to me and also thank Laik Sweeney for organizing the Teams meeting and sending me material.

I don't generally talk to portfolio managers but it was clear from the onset this wasn't a sales pitch, I wanted to dig deep into emerging markets and Varun really knows his stuff as you'll see below.

I began by asking him to give me a background about himself and how he got to Ninety One which he did:

Sure, I've been at the firm for 10 years. I'm co-manager Emerging Markets Equity portfolios. I've only invested in emerging markets through the duration of my career. Before the joining the firm, I was based in Hong Kong where I spent four years working on the sell side, working for Macquarie Capital. There I was focused on Asia ex-Japan, so the current role is a broadening role to global emerging markets.

I'm originally from India, I was born in India, my family are from there. I grew up in Holland but with very close ties to India through my grandparents and my family. I married an Indian girl, my in-laws live in India so we go back very often.

I asked him if it was Mumbai and he said that's where he was born. I noted it's definitely a burgeoning place

I then asked him to tell me a bit about Ninety One and which asset classes it specializes in. He replied:

Ninety One is very straightforward. We manage I think close to 250 billion Canadian dollars, and roughly 60% of those assets are emerging markets related. We are one of the few asset managers that are emerging markets focused. That's emerging markets equities, emerging markets fixed income, emerging markets private markets. So if you were to put us into one category, I'd say we are an EM house and that speaks to the heritage of the business. 

The business was founded in South Africa during an interesting time, in 1991 hence the name, and it was a particularly monumental time of our position because it's when apartheid ended. We were founded in a market undergoing tremendous change and that's in our DNA, operating in difficult markets where change happens sometimes for the good, sometimes for the bad. 

I asked him if he broke down assets between public and private markets, are they predominantly public and he said yes. 

I then shifted my focus to investments telling Varun I'm a macro person, used to allocate money to the best directional hedge funds in the world, had very few EM managers in my L/S book of managers and for me Emerging Markets were always about Risk On/ Risk Off markets meaning when rates were low and vol was low, they outperformed, when rate climbed and vol picked up, they got dinged. 

But I told him this "macro top down view" isn't necessarily still binding as there has been a profound shift in emerging markets over the last ten years and you see it as Canadian pension funds shifted their focus there, and there are powerful secular trends -- urbanization, rise of a strong middle class, digitization and communications and even though these countries remain export oriented, there is a growing service economy there leading to more economic stability. 

I asked him if he agreed or if it's still Risk On/ Risk Off like we thought about emerging markets in the 90s? He replied:

I think your intuition is correct. If you take a 20-year view, and you line up the best-performing asset class every calendar year all the way to the worst-performing, Emerging Markets Equities will be the very best or the very worst in roughly 75% of those calendar years over a 20 year period.

To your point, there's is absolutely Risk On/ Risk Off, a lot of volatility and inherent cyclicality. 

To your point about things changing, you're absolutely right. What has changed is vol (volatility), vol has changed and if you look at vol through that lens, the vol of emerging markets has been falling precipitously over the past 15 years. So much so, over the last couple of years there have been periods where vol of EM was lower than vol of DM, and when I say DM, I mean MSCI Equity. It's quite an eye-opening thing to appreciate.

And the reason for the vol divergence or narrowing of vol, I think there are structural reasons and cyclical  reasons. The structural reasons from a macro perspective, the policy has improved for EM because you used to have bad policy frameworks and that has changed. What I mean by that is you have strong central banks particularly in places like Brazil, India and Indonesia. That is leading to better policy-making. 

You also have flexible exchange rates that have moved away from pegged exchange rates, therefore the sudden breaking of the currency is less common.

That is the macro side of how things have changed, the other is plumbing, the general plumbing in a lot of these emerging markets has improved. And by plumbing I mean they've become deeper markets locally or domestically. 

Take India for example, it's a very deep, domestic market where the annual domestic flows have almost tripled since pre-Covid. So the Indian equity market saw roughly $12 billion of inflows pre-Covid. Post-Covid, $12 billion became $29 billion in a short amount of time.

The reason that has dampened vol is if you have foreigners running for the exits, you still have the domestic funds there to hold up the market. It's a much more genuine market rather than one governed by foreigners.

I think the final thing is we talk about US exceptionalism, if you put numbers against a narrative, equity vol has increased and it has increased because it's a concentration risk around US assets, particularly around the Mag-7. 

So you have almost the DMification of EM or the EMification of DM where we are looking a lot more developed market like and developed markets are looking a lot more like emerging markets.

Things are changing. 

Indeed, over the last 20 ears, things have changed drastically in emerging markets.

I noted there's definitely more diversification now in the EM markets than the US market but it's the same across the DM worlrd ex-US, meaning that Mag-7 and other tech heavyweights in the US (eg. Broadcom) are skewing the S&P 500 there.

I noted in emerging markets, you have good financial services, telecoms, materials but similar to Canada, they don't have that powerful technology sector which has led the US and world equities since 2010 frankly.

So there are diversification benefits in emerging markets but I also told Varun that countries like India worry me a bit because there are still three or four billionaires which control the main publicly listed equities there.

He responded:

Those comments are well placed but I think there's nuance if you would allow me to explain.

To your point on technology and the US being the innovation hub and the rest of the world following or being a fast follower, I'm not sure I agree with that and the reason I say that is if you think about AI, AI as it relates to the stack. You've got the apps at the very top, predominantly US based, then you've gt the GPTs in the middle, again, US based, but at the bottom of the stack, you have the infrastructure which is how to bring the whole thing to life. That is the fundamentals to how a house is built. And that is entirely emerging market based, predominantly Taiwan and Korea based. Think about Taiwan Semiconductor, Nvidia doesn't exist without the chip manufacturing and capability of TMSC nor doe sit exist without HAMNI Semiconductor which specifically provides high bandwidth memory chips that make AI possible.

The question I would pose to you, Leo, is during a gold rush, do you want to own the goldmine which is the apps, or do you want to own the guys that make the picks and shovels? the picks and shovels is in emerging markets.  

I interjected to say that is very interesting because Taiwan Semiconductor is still a stock that is very cheap by my standards:

I asked him to give me a breakdown of sector exposure because I always assumed financials make up 20-30% and technology maximum 10% in emerging markets. He responded:

You'd be surprised. If we look at Technology, it's now 25% of the benchmark.Taiwan Semiconductor is the largest, then you have Samsung Electronics based in Korea, Xiami (the Apple of China), and then a long list of other businesses but those are the top three [Note: Not sure which benchmark he is referring to because in the iShares MSCI Emerging Markets ETF (EEM), Alibaba and Tencent also figure among top holdings.]

So Technology is 25% of our world, Financials is 25% of our world. Innovation is happening in our markets, it's almost a quarter of the opportunity set.

I also asked him whether it's fair to say there is more value added in emerging markets because they're not as widely covered as US markets.

He responded:

I would certainly think so. The way I evidence this and we've done a white paper on this, we try to answer the question in which asset class does it really pay to go active vs being passive?

So we lined all up all the asset classes, and the one where it consistently paid to go active was emerging markets over the last 20 years. And that speaks to your point about the inefficiency.

If you think about the reasons for this inefficiency, I'll point out a couple. Retail participation is a really big one. China is 30% of the benchmark, roughly 80% of Chinese trading is dominated by the retail investor. 80% of the biggest market in the opportunity set, that's enormous. 

If you look at places like Korea, Saudi Arabia, they're dominated by the retail investor. So an active approach that is disciplined --and we'd like to think we are in that category -- has a pretty good shot of generating alpha over an extended period.

The other area of inefficiency i one of the characteristics of emerging markets is you have family owned businesses, like the point you made about India. Whats interesting about that as it related to inefficiency is you tend to have two types of families. The first is the family that wants to grow the size of the pie and therefore treat minorities well, that is a win-win type of approach.

The second is a family that wants to grow their share of the pie. That's not a win-win approach. What you tend to have in that second category of family is leakage. Leakage in related party transactions with their own side businesses, leakage sin terms of allocating capital to M&A, leakages in terms not paying out dividends or buying back shares when they should be because perhaps they own a minority stake in the business. 

That leads to opportunity if you can determine which business to invest in and which business to avoid.  

He gave me an example of a Russian airline they were looking at five years ago which looked remarkably good on paper but they looked at the board structure, governance structure and specifically changes to the board and one of the proposals was to add a 2-year old boy. They discovered the founder entered into a proxy battle with the board and to ridicule other board members, he proposed his 2 year old boy be a board member.

That was an extreme example but worth noting that governance and board structure matters in emerging markets. 

Lastly, I asked him about Trump's tariffs and how they are impacting emerging markets. 

He responded:

Tariffs are a lose lose game, there's no sugarcoating, everyone loses. That's the first thing.

Second thing, let's look at the price action, forget my opinion. Emerging markets are outperforming developed markets year-to-date. And one of the best performing markets year-to-date is China which supposedly should be hardest hit by tariffs. 

So, there's a narrative and there's reality. The reality is emerging markets are outperforming developed markets and China is doing very well.  

I interjected and told him last year when David Tepper came out with his big long on China, I was very skeptical because China is a communist country. So I asked him why is China outperforming?

He answered:

This is where my view comes in, if you look at why China has underperformed over the last 5 years, you'll get a lot of emotion around regulations, geopolitics, etc.

Take all that away, there's a financial reason that China has underperformed. There are five things that drive any market at any point and time: revenue growth, margin growth, currency, revaluation and fifth most important for China is net issuance.   

Think about net issuance as a company issuing capital vs a company doing a buyback or paying a dividend.  

That is what happened in China, net issuance has been off the charts over the past decade predominantly because you had very large companies in the late 20teens that went to IPO, the Chinese internet companies. And when they IPOed, they IPOed at a very high multiple in relation to the market multiple. They IPOed at roughly 27x P/E, the market multiple was 10 times. 

That's not a problem in and of itself, the problem is you had regulations in 2021 and those high priced companies derated to the market multiple. They are very big index companies, that is a dilutive impact on the benchmark, hugely dilutive. Alibaba's weighting in the benchmark now is 2.85%, it's come down a lot since it IPOed. 

That's history. If you look at what is happening now to think about the future, the net issuance in China is reducing substantially. It's reducing substantially because in 2024, the value of buybacks was almost double the value of buybacks in 2023. 

So the capital allocation framework for the average Chinese company has flipped on its head, the behaviour has changed. Now Chinese companies are saying the following: "I can't control the geopolitics, I can't control policy in my own country, I can't control whether the consumer saves or spends, there's only one thing I can control as an entrepreneur, it's with what do I do with the cash that flows into my business. And with that cash I will not be empire building, buying companies willy nilly, I'm going to do a buyback because my stock is cheap, I will be paying myself a dividend." 

That is why you have record high buybacks, record high  dividends in China. That is leading to net issuance declining significantly.

To recap, the financial reason China underperformed is net issuance, not anything else. The financial reason China could outperform is net issuance, that drag goes away and that is happening.

We ended up with a discussion on which markets he likes in the EM world and he told me UAE because it's uncorrelated and it's becoming more open to business, reducing tariffs and in 2019, they issued a golden visa for foreigners allowing them to remain in the country if they lose their job so immigration there is enormous (Dubai is booming).  

He told me he likes Aldar Properties in Abu Dhabi. He also like PopMart in China where Chinese buy small collectible toys which sit in mystery boxes so you don't know what you're buying and this business in China is booming (check out Labubu on Tik Tok). These mystery boxes are now selling all over the world and the margin overseas is significantly higher than the margin in China.

He told me they're underweight Taiwan because given tariffs are here to stay they want to be selective with businesses there that have pricing power (like Taiwan Semiconductor). 

Alright it's late but this was a fantastic discussion and I wanted to post it so my readers can digest it over the weekend. 

Varun Laijawalla is a really smart guy who is a real pleasure to talk to and he opened my eyes to the opportunity set in the emerging markets.

Below, a conversation with Varun Laijawalla, Portfolio Manager at Ninety One, where he manages long only EM and EM ex-China portfolios. Take the time to listen to this interview.

Sebastien Betermier, Associate Professor of Finance, Desautels Faculty of Management at McGill University and Executive Director of the International Centre for Pension Management (ICPM) published a comment on how to build a stronger and smarter retirement system in Canada:

A well-designed pension system brings enormous social and economic value to its members and society as a whole. Retirees have a reliable source of income during retirement when they are elderly and vulnerable. Retirees are also more inclined to spend and contribute to a healthy economy when they can rely on a steady income source.  In addition, a well-capitalized pension system encourages disciplined savings from an early age, which can lead to significant wealth accumulation over the life cycle and lower financial stress. These savings are invested in businesses, real estate, and infrastructure projects, which further contribute to a healthy economy. 

Unfortunately, Canada’s pension system does not stand out on the global stage. According to the Mercer CFA Institute Global Pension Index, Canada scores a B and ranks 17 out of 48 countries. This is passable but not great. What can Canada do differently to strengthen its pension system? I’ll use the Rule of Three and discuss three distinct strengths of the Canadian pension system, three major problems, and three actionable solutions. 

Strengths of the Canadian Pension System

The Canadian pension system has the distinct advantage of being balanced, providing a combination of safety and flexibility. Programs such as Old Age Security Pension (OAS) and Guaranteed Income Supplement (GIS) are means-tested and provide a social safety net for those with lower incomes. The Canada Pension Plan and its Quebec analog, the Quebec Pension Plan, provide a defined benefit plan for all Canadians. CPP/QPP benefits are portable, indexed to inflation, and cover up to one-third of the average Canadian pensionable earnings throughout retirement. In addition to these government schemes, many employers offer corporate pension plans to their employees. And individuals wishing to save more have a menu of tax-efficient vehicles to invest in.

The financial sustainability of the CPP/QPP schemes presents another distinct strength of the Canadian pension system. Thanks to important reforms passed in the mid-1990s, these national schemes, which previously operated on a pay-as-you-go basis, are now partly capitalized. Over the past twenty-five years, the high return generated from the invested capital has enabled the schemes to stay afloat and keep contributions and payouts stable despite the increased funding pressures resulting from the ageing population. By contrast, pension systems that continue to operate exclusively on a pay-as-you-go basis, such as the system in France, face mounting financial imbalances that are triggering politically unpopular discussions about raising the retirement age.

Another unique strength of the Canadian pension system is the strong governance structure of its large public-sector pension plans, which provide defined-benefit pensions for the military, teachers, and other public-sector workers. These plans operate at arm’s length from their governments, are run like private-sector organizations, and are renowned globally for their cost-efficient investment model, which consists of investing directly in a wide universe of assets ranging from listed equities to private infrastructure. The high returns earned over the past 20 years (about 8% annually on average) have enabled these plans to pay decent pensions to Canada’s public-sector workers and remain open and fully funded.

Challenges Facing the Canadian Pension Landscape

Unlike the public sector, where pension coverage is excellent, pension coverage in the private sector is surprisingly low, which partly explains the B score. Nearly 80% of private-sector workers do not have access to an occupational pension scheme. And for the 20% that do have access, the benefits offered by the plans are often subpar. 

Part of the problem is the high level of market fragmentation. Each province has its own regulator, making it challenging for companies hiring workers in multiple provinces to offer consistent and scalable pension plans. Added to this, most pension plans are tied to employers. This means that individuals relocating to another province or switching jobs may accumulate several pension pots, making it challenging to keep track of the different pots. 

The low household savings rate is another problem: Canadians do not save much for retirement. Canada has the highest household debt-to-disposable income ratio in the G7, at 185%. Furthermore, a survey conducted online with 2,000 Canadians aged 18 and over reveals that 4 in 10 Canadians have less than $5,000 in savings. Almost a third of unretired Canadians aged 55-64 say they expect to continue working in retirement to support themselves.

A third problem is that the governance of our public-sector plans is under threat. The eight largest Canadian pension funds, collectively known as the Maple 8, currently manage over CAD 2 trillion of assets. Increased nationalism and concerns about low productivity growth in Canada have triggered a hot debate about whether governments should exert greater control over the way pension funds invest. Last Fall, the Alberta government abruptly dismissed the entire board and CEO of AIMCo, the large asset manager for the province’s pensions and endowments.

Actionable Reforms for a Stronger Pension System

The more assets public-sector pension plans accumulate, the more tempting it will become for fiscally constrained governments to control the way the plans’ capital is invested. Stronger guardrails must be established to ensure the plans remain operationally independent.

One such guardrail is the adoption of an independent committee to identify and nominate new pension fund board directors who are appointed by the government. This will maximize the likelihood that new directors are highly qualified and non-partisan. Another guardrail is the requirement that the legislative branch confirms the new directors. This will ensure the appointments are made with parliamentary review and scrutiny. Finally, governments should not have the ability to terminate board directors before the end of their term under regular circumstances. This will ensure the directors have the freedom to act with a long-term focus, free from political pressures. 

For private-sector pension plans, the priority is to bring them up to par with the public-sector plans. For this to happen, we need to create scale. One path forward is to adopt a common set of standards and regulations for registered pension plans across provinces, which goes above and beyond the current CAPSA guidelines established by pension regulators to promote the coordination and harmonization of regulatory principles and practices across provinces. A common set of standards and regulations will level the playing field, provide an easier, more consistent, and scalable environment for employers, and reduce costs. 

Another pathway to creating scale is to promote pension plan arrangements that do not require an employer-employee relationship. This is the pathway pursued in Australia, where employees can request their employer to direct pension contributions to the pension plan of their choice. These plans do not offer the same degree of customization as employer-based plans, but are much more scalable and specialize in handling a large number of small accounts efficiently. In Canada, such a structure does not exist. One exception is the Saskatchewan Pension Plan (SPP), a defined-contribution plan created by the Saskatchewan government that is available to all Canadians, is portable, operates at arm’s length from government, and does not require an employer-employee relationship. 

In addition to creating scale, we need to improve the quality of private-sector pension plans. Most private-sector organizations provide a standard defined-contribution plan where employees are on their own and bear all the risks. The challenge is how to reduce risks for members without transferring those risks to employers.

One solution is to encourage the growth of jointly sponsored pension plans such as CAAT Pension Plan, Healthcare of Ontario Pension Plan (HOOPP), OPTrust Select and University Pension Plan (UPP). Jointly sponsored pension plans allocate risk across a broader membership base than single-employer plans and provide a “DB-like” stream of retirement income for employees without exposing employers to a significant risk of rising contributions. Another solution is to promote the growth of Variable Payment Life Annuities (VPLAs). These new types of annuities, which were recently proclaimed into law in Canada, provide an opportunity for pension fund members to pool a part of their retirement savings. In doing so, members can reduce important risks such as their own longevity risk in a cost-efficient way without putting employers on the hook. 

Building the Political Will for Change

Scoring an A on the Mercer CFA Institute Global Pension Index is possible. We know what the issues are and how to fix them. It’s a matter of building political will and coordination, and learning from other countries that have reached near-universal pension coverage and offer cost-efficient pension solutions for the private sector. Pushing forward these changes is a no-brainer, as a more robust pension system will improve financial well-being, reduce senior poverty and dependence on government, and encourage long-term investments. 

I thank Sebastien Betermier for sending me this excellent comment.

He's a well-known pension expert in Canada and his knowledge of our pension system is second to none.

He highlights all the important points but there are areas where I disagree with him on some of his views.

First, he's right, Canada has a decent pension system with Old Age Security (OAS), Guaranteed Income Supplement (GIS) and CPP/ QPP benefits forming the three-legged stool, but there is a growing retirement crisis and it's entirely in the private sector where comprehensive coverage is low or non-existent.

And let me be crystal clear, by comprehensive coverage, I mean the gold standard, a defined-benefit plan backed by the provincial or federal government that retirees can count on till the day they die.

Earlier this week, I discussed HOOPP and Abacus Data's 2025 Canada Retirement Survey. 

Among the key findings:

• Fifty-nine per cent of unretired Canadians do not think they will ever be able to retire due to their financial situation. Half (49%) have not set aside any money for retirement in the past year and 39% have never saved for retirement. 
• Nearly two-thirds (62%) of Canadians view homeownership as a key part of their retirement strategy, either as a financial investment or a source of stability in retirement and as part of their strategy, half (50%) of unretired homeowners plan to rely on the sale of their home to set themselves up for retirement. 
• More than a third (36%) of Canadians report having less than $5,000 in savings, including for retirement, and one-in-five (20%) have no money saved. Those who do not own a home are significantly more likely to have less than $5,000 saved (57% vs. 19% of homeowners). 
• An overwhelming majority of Canadians (88%) would choose to pay 9% of their salary, with contributions matched by their employer, to a DB pension plan in exchange for a lifetime income in retirement. 

That last point is telling because the majority of Canadians are screaming out "we need help to retire in dignity" but nobody is listening to them.

Their MPs at the provincial and federal level all have gold-plated defined-benefit pensions guaranteed for life and all they need is to serve two full terms to get it.

Added bonus, these MPs can vote for hefty pay increases when they think it's deserved and that also boosts their pension payout (for life).

Why do you think Jagmeet Singh stuck around, he wanted his pension. And while Conservatives were targeting his pension, their leader Pierre Poilievre is set to draw more than $230,000 annually once he turns 65. 

Anyways, back to Sebastien's comment and bolstering Canada's retirement system.

He's absolutely right that our Maple Eight funds are the envy of the world, operating like businesses independently from government and the long-term returns support this notion.

More importantly, they all have more than enough assets to meet their long-dated liabilities and this is the ultimate measure of success for any pension plan.

So that independent governance is critical and producing the much-needed long-term results. 

Sebastien then claims the governance of our public-sector plans is under threat using what happened at AIMCo as an example when the Alberta government abruptly dismissed the entire board and CEO.

Here is where I have different views and let me explain.

What happened at AIMCo was unfortunate but it was also a big warning shot across all of Canada's large pension funds, if you piss off your major shareholder, the provincial or federal government, your board and senior management can easily be fired and replaced.

I know for a fact many provincial governments and the federal government are becoming increasingly uncomfortable with giving their public pension funds too much leeway as compensation runs amok and costs mount, so while we are unlikely to see another Alberta "clean the house up" episode ever again, never say never.

In other words, independent governance is truly a balancing act and these large Canadian pension funds are increasingly being asked to provide a lot more detailed transparency on where they invest and every aspect of their operation including compensation and costs is being scrutinized.

So, they have to satisfy their most important shareholder, their sponsor governments which have enormous power and will use it if they're not happy with their relationship with their large pension investment managers.

At the end of the day, whether they like it or not, these are Crown corporations, not private investment managers and they need to manage their most important relationships with governments accordingly if they want to maintain their independent governance.

That's what the AIMCo cleanup proved to me at least. 

What else? I like Sebastien's idea of adopting an independent committee to identify and nominate new pension fund board directors who are appointed by the government.  

In my opinion, given the complexity at these shops, you need to seriously consider putting more former employees from all departments (front office, back and middle office, risk, finance and IT) of large Canadian pension funds at the board levels.

There are pros and cons about placing former employees on the board as I've seen good and bad outcomes from doing this but the complexity of these shops and their underlying strategies, you can't expect to find qualified people with the requisite experience to properly assess and monitor all their activities.

I'll be blunt, most board members look great on paper, they're smart and experienced people but many of them are in over their head overseeing activities at these large Canadian pension funds.

But I want to be clear, hiring a former CEO or senior executive from a Maple Eight fund to put them on your board doesn't guarantee better oversight (it could backfire and perpetuate more problems/ abuses) but I know through my conversations with senior people, many board of directors at the Maple Eight funds are in way over their head (most are fine and all learn a lot along the way).

It's a tough job overseeing these large pension funds and it’s not getting any easier. 

Lastly, Sebastien is right, we need to create scale and offer private sector employees better retirement outcomes.

We need to use what is working at CAAT Pension Plan, UPP, HOOPP to expand coverage but I also think we need bigger and bolder action here and offer every private sector employee a defined-benefit plan like public sector workers have. 

The most important retirement legislation in Canada was passed years ago, it's called enhanced CPP and it will help future generations of Canadians retire in security but it won't help Canadians getting ready to retire over the next five, ten or fifteen years.

I'll state once again what I stated a couple of days ago, we need a royal commission to look into bolstering Canada's retirement system and we need it sooner rather than later.

We have to think outside the box and discuss all options including creating a new large pension fund that covers existing private sector workers who have no DB plan, model its governance after the Maple Eight funds.

What about Canada's large banks and insurance companies, how will they react? If they're smart, they will welcome such a development and focus on delivering value add where they can, wealth management and other services.

Again, in my opinion, it's time to think big and think boldly.

Let me once again thank Sebastien Betermier for sending me his comment and getting me to think hard about what needs to be done to bolster Canada's retirement system.

Below, in this webinar, pension researcher Sebastien Betermier from McGill University presents findings from a GRI report that he co-authored with Keith Ambachtsheer from the University of Toronto and Chris Flynn from CEM Benchmarking. The focus of the research is to identify trends in how much Canadian pension funds invest in Canada (from 11 months ago).

Ivan Levingston and Mary McDougall of the Financial Times report Macquarie buys stakes in UK airports from Ontario Teachers’ Pension Plan:

Australia’s largest infrastructure investor has bought stakes in three UK airports from Ontario Teachers’ Pension Plan, marking the latest deal in the travel industry as investors capitalise on a post-pandemic rebound.

Macquarie Asset Management said on Wednesday it had acquired 25 per cent of London City airport, a 55 per cent share in Bristol airport, as well as a 26.5 per cent stake in Birmingham airport. It did not disclose the value of the stakes.

The acquisitions come with Macquarie’s ownership of infrastructure assets in the UK under scrutiny as a result of the crisis at Thames Water, which amassed massive debts and regularly paid dividends during a decade-long ownership to 2017 by the Australian investor.

Macquarie said the airports offered “unique propositions and catchment areas which present significant growth opportunities” and that it was committed to helping airlines expand their route networks.

The sale of Ontario Teachers’ stake in London City has completed, while the Birmingham and Bristol airport deals are subject to regulatory approval and are expected to complete by the end of this year.

Ontario Teachers acquired its holdings in Birmingham and Bristol in 2007 and 2008, respectively, before adding its share of London City in 2016.

The Macquarie deals follow a spate of transactions in the UK’s airport sector. US private equity group Blackstone struck a £235mn deal with Canadian pension investor PSP in March for a 22 per cent stake in the owner of the Aberdeen, Glasgow and Southhampton airports.

Private investors have also backed several other UK airports, including London’s Heathrow and Gatwick. Spanish construction company Ferrovial agreed last year to sell the majority of its stake in Heathrow to private equity group Ardian and Saudi Arabia’s sovereign wealth fund.

The Labour government has made airport expansion one of its areas of focus, with four out of London’s five major airports seeking to expand. London City airport received permission to expand its passenger numbers by more than a third last August.

Richard Lowe of IPE Real Assets also reports Ontario Teachers sells stakes in UK airports to Macquarie:

Ontario Teachers’ Pension Plan has sold its stakes in three UK airports to Macquarie Asset Management – more than 24 years after first entering the UK airports sector.

The Canadian pension fund has sold a 55% stake in Bristol Airport, a 26.5% interest in Birmingham Airport and a 25% share of London City Airport to Macquarie European Infrastructure Fund 7.

Ontario Teachers first invested in UK airport infrastructure in 2001, later acquiring direct stakes in Birmingham in 2007, Bristol in 2008 and London City in 2016.

In 2017, Ontario Teachers reduced its exposure to Bristol and Birmingham airports by selling stakes to New South Wales Treasury Corporation and Sunsuper Superannuation Fund (now Australian Retirement Trust). Ontario Teachers had previously taken full ownership of Bristol Airport in 2014, after acquiring Macquarie’s 50% stake. Stepstone is also listed as a minority owner of Bristol Airport.

Ontario Teachers has owned a 48.25% stake in Birmingham Airport since it acquired an additional 19.25% stake from Victorian Funds Management Corporation in 2015. The rest of the airport is owned by West Midlands metropolitan boroughs and employees.

The Canadian investor had co-owned London City Airport as part of a consortium including fellow Canadian pension funds Alberta Investment Management Corporation and OMERS, and Wren House Infrastructure, an arm of the Kuwait Investment Authority.

Charles Thomazi, senior managing director and head of infrastructure for EMEA at Ontario Teachers, said: “UK airport infrastructure has been a key area of focus for Ontario Teachers over the past 20 years and we’re very proud to have supported Bristol, Birmingham and London City as they’ve grown, developed and continued to strengthen the experience for passengers.

“Each airport plays an important role in its region and, with all currently undergoing expansion programmes, will continue to grow and deliver for their passengers, communities and the broader economy.”

Macquarie is acquiring the stakes on behalf of its latest European infrastructure fund, for which it raised €8bn. Last year, a previous fund in the series sold a stake in AGS, the owner and operator of Aberdeen, Glasgow and Southampton airports.

Gordon Parsons, senior managing director at Macquarie Asset Management, said: “As a leading investor in airports around the world, including the UK, we understand their importance to local communities and for economic growth. Collectively, Birmingham, Bristol and London City airports serve over 25m passengers each year and are a valued home for leading regional and global airlines.

“Each airport has a unique path for growth ahead, and we’re supportive of the management teams’ plans to deliver enhanced customer experiences and more routes to each of the communities they serve. We look forward to playing our part, as a long-term investor, to support all three airports on their development in the years to come.”

Capital Brief also reports Macquarie buys stakes in three UK airports from Ontario Teachers’ Pension Plan: 

The news: Macquarie Group has agreed to acquire ownership stakes in Bristol, Birmingham and London City airports from Ontario Teachers’ Pension Plan.

The numbers: The investment by Macquarie Asset Management, via its Macquarie European Infrastructure Fund 7, was for an undisclosed amount and includes a 55% stake in Bristol Airport, a 26.5% stake in Birmingham Airport and a 25% stake in London City Airport.

The London City Airport deal has reached financial close, while the acquisitions of the other two airports are expected to conclude by the fourth quarter of fiscal 2025, subject to regulatory approvals, the company said.

The three airports collectively serve over 25 million passengers each year.

Macquarie said it plans to support the airports over the long term by expanding route networks, improving passenger experience and working with management and stakeholders on sustainability strategies.

The context: Macquarie has invested in airports globally for over 20 years and operated in the UK for 35 years. It has previously held stakes in airports in Australia, Belgium, Italy, Denmark, Ecuador, Colombia and the UK.

Last year it exited its ownership in AGS Airports, where it had invested £250 million ($516 million).

It comes a day after Macquarie said it had closed the $US6.8 billion Macquarie Infrastructure Partners VI fund for investments in the Americas, alongside $US1.3 billion in co-investment capital.

Earlier today, Ontario Teachers' issued a press release on this deal:

18 June 2025 - Ontario Teachers’ Pension Plan Board (Ontario Teachers’) announces today that it has reached an agreement to sell its interests in three UK airport assets - Birmingham Airport (BHX), Bristol (BRS) and London City Airport (LCY) - to Macquarie Asset Management (Macquarie).

Ontario Teachers’ has been a long-term investor in these airports, contributing to their growth, modernisation and decarbonisation over the past two decades. Ontario Teachers’ first invested in UK airport infrastructure in 2001, later acquiring direct stakes in Birmingham in 2007 and in Bristol in 2008. A 25% stake in London City Airport was acquired in 2016. These airports have continued to serve tens of millions of passengers annually, driving connectivity across the country, continent and globe and together, play a central role in regional economic growth across the UK, contributing collectively over £3.7 billion in gross value added (GVA) and 37,600 jobs.

Charles Thomazi, Senior Managing Director and Head of Infrastructure in EMEA at Ontario Teachers’ said:

“UK airport infrastructure has been a key area of focus for Ontario Teachers’ over the past 20 years and we’re very proud to have supported Bristol, Birmingham and London City as they’ve grown, developed and continued to strengthen the experience for passengers. Each airport plays an important role in its region and, with all currently undergoing expansion programmes, will continue to grow and deliver for their passengers, communities and the broader economy. We’d like to thank our fellow shareholders for their collaboration and our management teams and airport staff for their dedication and support, not least during the Covid-19 pandemic. We are confident that BHX, BRS and LCY will continue to flourish and are pleased to be passing the baton to new investors Macquarie as they support them in the next stage of their growth.”

During Ontario Teachers’ ownership, highlights include:

Bristol Airport

• Significant growth to over 10 million passengers per annum, with a 72% increase in traffic since 2008 and the fastest recovered major UK Airport post-Covid 19 pandemic;
• Investment of over £300m over the past decade, including in improving the customer experience, Next Generation security, new retail & catering facilities, car parking and the development of a new public transport Interchange
• Strong growth in the number of airlines operating from the airport, providing increased choice for customers to the 115 destinations it serves; and
• Level 4+ accreditation in the international Airport Carbon Accreditation (ACA) scheme; airport on track to achieve a net zero position for scope 1&2 emissions by 2030.

Birmingham Airport:

• 35%+ growth in passengers, from 9.6 million in 2007 to over 13 million at the end of 2024
• Significant investments totalling over £425m made over past 18 years to modernise and expand BHX, including extension of the runway, the opening of a new pier, a new baggage system, upgraded security and check in areas and an enhanced passenger drop off area;
• Multiple new flight routes added, today provided by over 30 airlines connecting travellers to over 165 destinations;
• Level 3 accreditation in the (ACA) scheme since 2023; airport on track to meet commitment for operations to become net zero by 2033.

London City Airport:

• Significant investments by shareholders over last 9 years totalling over £600 million to expand LCY to accommodate larger aircraft and expand facilities, with development projects including the UK’s first remote digital air traffic control tower, expansion of the airside footprint through reclamation of land as part of the City Airport Development Programme (CADP), Next Generation security expansion and a new baggage facility;
• Continued focus on enhancing the passenger experience and destination choice and Level 4+ accreditation in the international Airport Carbon Accreditation (ACA) scheme since 2019.

The sale of Ontario Teachers’ stake in London City Airport has reached financial close following signing. The sales of its stakes in Birmingham and Bristol airports are subject to regulatory approval, and are expected to complete in Q4 2025.

About Ontario Teachers’ Pension Plan

Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $266.3 billion as at December 31, 2024. Ontario Teachers' is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 343,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn. 

Alright, even though financial details are not disclosed, this is a significant distribution for Ontario Teachers' as it was invested in these three UK airports for a long time.

It acquired its holdings in Birmingham and Bristol in 2007 and 2008, respectively, before adding its share of London City in 2016. 

As the press release states, significant value added was obtained on all three airports as Teachers' and its fellow shareholders implemented a plan to contribute to growth, modernize and decarbonize their operations.

Macquarie Asset Management, via its Macquarie European Infrastructure Fund 7, acquired a 55% stake in Bristol Airport, a 26.5% stake in Birmingham Airport and a 25% stake in London City Airport. 

Macquarie is no stranger to airports. Late last year, along with Ferrovial, it sold its stakes in AGS Airports to AviAlliance, PSP Investments' airports platform:

Macquarie Asset Management (Macquarie), via Macquarie European Infrastructure Fund 4, and Ferrovial have reached an agreement to sell AGS Airports to AviAlliance.1 The terms of the transaction represent an enterprise value for the business of approximately £1.53 billion.

AGS Airports owns and operates the primary airports serving Aberdeen, Glasgow and Southampton. These airports provide essential domestic and international connectivity to three important economic and population centres across the UK and serve more than 10.8 million passengers annually.2 The airports contribute approximately £2 billion in Gross Value Added to the UK economy per year and support more than 30,000 jobs across a sophisticated supply chain.3

AGS Airports was established as a 50:50 joint-venture between Macquarie and Ferrovial following their 2014 acquisition of the airport portfolio from Heathrow Airport Holdings Limited. A partnership approach with Ferrovial has enabled AGS Airports to invest £250 million to deliver vital improvements, including:

• The largest investment in Aberdeen International Airport’s capacity since its main terminal was opened in 1977. The £20 million investment increased terminal space by 50 per cent to accommodate enhanced security facilities, an increased retail offering, new areas for baggage reclaims, expanded business lounges, and new immigration and arrivals facilities.
• A £9 million investment to revamp infrastructure at Glasgow Airport to accommodate all wide-body aircraft alongside improvements to a dedicated pick-up and drop-off facility, new car rental centre, expanded security facilities, and improved retail and lounge options.
• A £17 million runway extension at Southampton Airport, which opened in 2024, securing the airport’s future contribution to local communities and businesses across the South East and importantly allowing for the airport to be able to operate larger aircraft and diversify its airline base.

During the COVID-19 pandemic, when UK air arrivals fell by 89 per cent between April 2020 to January 20214, Macquarie and Ferrovial also provided vital support to ensure the ongoing resilience of the airports group despite the unprecedented challenges posed to its day-to-day operations.

Martin Bradley, Head of Infrastructure for Macquarie Asset Management in EMEA, said: “Since 2014, we have worked in partnership with Ferrovial to support around £250 million of investment by AGS Airports aimed at delivering a better experience for passengers travelling via Aberdeen, Glasgow and Southampton airports. Following this decade of investment, we are pleased to be passing the baton to AviAlliance to unlock the next phase of growth.”

Andy Cliffe, Chief Executive Officer of AGS Airports, said: "Over the past 10 years, Macquarie and Ferrovial have played a central role in unlocking our full potential. Their close partnership with the teams across our three airports ensured we had the support to invest in our passenger offering while improving our operations. We are grateful for their close stewardship and look forward to continuing to develop our services and beneficial impact on passengers and communities across the regions of Aberdeen, Glasgow and Southampton.”

Macquarie has invested or arranged more than £60 billion in UK infrastructure over the past two decades and is supporting £20 billion of investment across its portfolio over the coming years to deliver improved energy, transport, utilities, social and telecommunications infrastructure in England, Wales and Scotland. 

The transaction is expected to reach financial close by Q1 2025, following the satisfaction of customary closing conditions and regulatory approvals. 

1. A wholly owned subsidiary of Public Sector Pension Investment Board (PSP Investments)
2. LTM June 2024 passenger numbers across Aberdeen, Glasgow and Southampton Airport, AGS Airports
3. https://www.glasgowairport.com/media-centre/2019-and-older/glasgow-airport-contributes-1-44-billion-to-scottish-economy-and-supports-over-30-000-jobs/
4. GOV UK statistics relating to passenger arrivals in the United Kingdom since the Covid-19 outbreak 

Clearly Macquarie knows how to add value to airports it invests in and given that UK regulators aren't too happy about how they managed Thames Water, I'm confident they will take the necessary steps to work closely with existing shareholders and add value to the airports they just acquired stakes in.

Now, what will Ontario Teachers' do with the funds it receives? It will invest them elsewhere as opportunities arise.

These airports deals demonstrate how large alternative asset managers can compete with the Maple Eight or work with them to acquire and sell prized assets.

If it makes sense to sell stakes in an infrastructure asset and they get a decent price, why not sell?

It's part of managing their portfolio and yes, it will also boost returns of OTPP's Infrastructure group this year.

Below, Ontario Teachers’ Pension Plan, one of the world’s largest and most influential institutional investors manages nearly $200 billion dollars in assets globally. Global markets are in flux on the back of geopolitical & trade uncertainties While emerging technologies like AI threaten to disrupt business models across sectors. Prashant Nair caught up with Jo Taylor, the CEO At Ontario Teachers’ Pension Plan to discuss the impact of potential changes in the global economy and also the Plan's investment strategy in India (March 30, 2025).

Also, Faultline recently reported on the battle over London's $80 billion airport. Worth watching this, very interesting and has nothing to do with why OTPP sold its stakes in these three UK airports.

Meera Raman of the Globe and Mail reports that according to a new survey, almost half of Canadians say fading retirement dreams are weighing on mental health:

Nearly 60 per cent of working Canadians believe they’ll never be able to retire, according to a new survey from the Healthcare of Ontario Pension Plan (HOOPP) — reflecting how anxiety and financial instability are reshaping retirement planning across the country.

That fear is taking a toll. The annual survey, released Tuesday, also found that 44 per cent of Canadians say their mental health has worsened because of geopolitical instability. Many reported feeling anxious, fearful and sad about their finances, with concerns intensifying over the past year.

After a long bull-market run that increased the size of many people’s nest eggs, the notion of a comfortable retirement has been upended by a storm of economic forces. More Canadians are putting off saving, scaling back plans or questioning whether they’ll be able to retire at all.

“I feel like history is repeating itself, only worse,” said Alison Smith, a 50-year-old banking professional in the Greater Toronto Area. “I just don’t have enough. I don’t have enough private savings to survive by the time I retire.”

Ms. Smith lost her job during the 2008 financial crisis, and even though she was able to find another job, she is still concerned about how her savings will stand up to recent market swings. “It’s going to be time to pay the piper pretty soon, and I think we’re all feeling the pressure,” she said of her Gen X peers.

The survey by HOOPP, which manages pension investments for more than 478,000 members at more than 700 employers in Ontario’s hospital and health care sector, found that almost half of Canadians haven’t set aside any money for retirement in the past year. Thirty-nine per cent say they’ve never saved for retirement at all. More than a third say geopolitical instability has already affected their travel plans, with many Canadians delaying or cancelling their trips to the United States.

The findings were based on a survey of 2,000 Canadians aged 18 and older from April 11 to 16, 2025.

Even for Canadians who have managed to squirrel away some savings, the stress remains.

“When the markets are down, they recover faster than a retiree’s confidence returns,” said Adam Chapman, a certified financial planner based in London, Ont. “The markets come back, but the retirees are still ultra-hesitant and anxious.”

Mr. Chapman said that while portfolio values may have stabilized, his phone keeps ringing. Many of his retiree clients are overwhelmed, not just by the memory of recent market dips, but by the barrage of news about tariffs, interest rates and global instability.

“They’re having a hard time following the news that’s happening, with announcements changing week to week, sometimes day to day,” he said.

Mr. Chapman points out a technical term in financial planning for what many retirees are going through: “sequence of returns risk.”

It refers to the risk of a market downturn in the first few years of retirement — a period when retirees begin to draw down their portfolios. If the market drops early on, losses can compound faster than if the same dip happened later in retirement.

But Mr. Chapman says that only tells part of the story.

“That just looks at the numbers,” he said. “It doesn’t look at what’s the emotional effect of a down market in the first couple of years for a retiree who just retired. People are feeling insecure and not confident.”

That emotional effect is rippling through even the best-laid retirement plans, he said, prompting some to question whether they should have retired in the first place.

Jennifer Rook, vice-president of strategy, global intelligence and advocacy at HOOPP, said the emotional toll is reflective of the times.

“People are living longer, and we’re in uncertain times,” she said. “Just the very concept of retirement is hard for people to think about right now.”

Mr. Chapman recommends that soon-to-be retirees and those already retired prioritize not just financial planning, but emotional support. That could mean speaking with a mental-health professional or working with a financial adviser who understands the psychological toll that retirement can take, he said.

Some advisers and firms are recognizing this growing need. Many now pursue additional training to better support clients through the emotional side of retirement, including grief, fear and uncertainty about the future.

“Really good financial planners and financial advisers go way beyond the math when the math doesn’t work,” Mr. Chapman said. 

A friend of mine who is a really good financial advisor says his number one job is being a psychologist, consoling and reassuring his clients through these news-driven turbulent times.

People get very emotional with money and that often leads them to do stupid things at the wrong times.

Admittedly, we are human, not algorithmic machines trading markets every second of the trading day so when the S&P 500 goes down 20% after Trump's Liberation Day, you bet people are calling their financial advisors to get out of the market. 

More worrisome, Gigi Suhanic of the National Post reports more Canadians are relying on a home to fund their retirement despite the risks:

A majority of Canadians believe that owning a home is a critical part of their retirement strategy and the number of them relying on the sale of their home to help them retire continues to rise, according to a major pension plan, even though there are issues with that strategy.

Sixty-two per cent of people surveyed by the Healthcare of Ontario Pension Plan (HOOPP) said homeownership is “a key part of their retirement strategy, either as a financial investment or a source of stability in retirement.”

Forty-four per cent of people said they were depending on the sale of their home to put a retirement fund in place, up from 42 per cent last year and 38 per cent in 2023.

“When people are younger, they have to save for two key assets in life, one being a house and one being retirement,” Jennifer Rook, HOOPP’s vice-president of strategy, global intelligence and advocacy, said. “As the house becomes more expensive, you are kind of forced to choose a little bit more. What we are seeing is people are really still striving for the house and putting stock in (it).”

One-third of homeowners said they would remortgage their homes to fund their retirement — the first time HOOPP asked that question in the seven years of the survey.

But the survey uncovered risks associated with relying on selling a house for retirement.

“If you’re relying on that as your retirement asset, that plan is a lot less certain than it was when you embarked on that path many years prior,” Rook said.

HOOPP said 65 per cent of homeowners who are working say they are worried that they will still have a mortgage by the time they are ready to retire, up from 51 per cent in 2024 and 45 per cent in 2023.

On a more positive note, 48 per cent said they worried about being able to afford their current or future mortgage payments, compared to 52 per cent last year.

But 62 per cent of non-homeowners doubt they will ever be able to purchase a home based on current interest rates, a similar number to last year.

At the time of last year’s survey, interest rates were at their most recent peak of five per cent before the Bank of Canada started cutting. Rates now stand at 2.75 per cent.

The survey said younger generations are more likely to be banking on homeownership to fund their so-called golden years, with 55 per cent of those aged 18 to 34 saying they are going to rely on their home to “set them up for retirement,” compared to half of those aged 35 to 54 and 41 per cent of those aged 55 to 64.

“When you’re young, you think of things differently than you do as you get a bit older,” Rook said. “But it might also speak to the availability of a pension.”

Perhaps that’s why 88 per cent of those surveyed by HOOPP said they would be willing to contribute regular instalments to a defined-benefit pension plan, which is structured to guarantee payments for life once you stop working.

HOOPP also said Canada’s frayed relations with the United States was the top concern weighing on Canadians’ minds and affecting their financial planning, with 67 per cent “very concerned” about it, but that increased to 71 per cent for those near retirement.

Inflation and general economic uncertainty were also among the top concerns of those surveyed.

Overall, planning for retirement is still hard for many people, with the survey painting “a grim picture” of Canadians’ retirement preparedness: 66 per cent of unretired Canadians said they will need to continue working later in life to financially support themselves; 15 per cent of retired people said they didn’t have savings when they stopped working; and more than one-third said they have less than $5,000 in savings.

Abacus Data conducted the survey of 2,000 adults for HOOPP from April 11 to 16. The survey has a margin of error of 2.19 per cent 19 times out of 20.

Jennifer Rook, HOOPP’s vice-president of strategy, global intelligence and advocacy is absolutely spot on: “When you’re young, you think of things differently than you do as you get a bit older, but it might also speak to the availability of a pension.”

What do all these retirement surveys show? They show many Canadians are living paycheck to paycheck and cannot afford to retire.

An increasing number of the lucky ones that own a home will remortgage their home to afford retirement and that's become the de facto national retirement plan for a large subset of the population with no access to a defined-benefit plan.

For the ones that do not own a home, the situation is dire. 

It's a slow motion retirement nightmare for most Canadians and it's taking its toll on their mental health.

No doubt, Old Age Security and Guaranteed Income Supplement (GIS) will help many low-income Canadian retirees get by during their retirement years but the key phrase here is (barely) "get by” (helps top out their CPP/ QPP benefits). 

The economic effects of more and more Canadians unable to retire or retiring with little to no savings are profound.

I have a conservative friend of mine who agrees with me, every Canadian working 25+ years deserves a decent DB pension plan, it's ridiculous that our politicians are not taking appropriate actions to make this a reality but like everything else in Canada, there are powerful vested interests that want to maintain the status quo.

The folks at HOOPP understand the value of a good pension and they've been at the forefront advocating for better pensions for all the population. 

Why? What do they care? They boast of having one of the best DB pension plans in the world and can literally ignore this issue.

But it's an important policy issue for them and since they are healthcare professionals, they understand the mental, physical and financial toll of retirement insecurity, a bit akin to food insecurity.

So we should commend them for advocating for better pensions for all.

Below, here is the executive summary and key findings from the seventh annual Canadian Retirement Survey that HOOPP and Abacus Data put out: 

Executive Summary 

The Healthcare of Ontario Pension Plan (HOOPP) partnered with Abacus Data on the seventh annual Canadian Retirement Survey, conducted in the spring of 2025. This public opinion tracking survey examines Canadian individuals’ retirement savings behaviour within the current economic environment, and the personal, societal and economic issues impacting their retirement security.

The results of this year’s survey highlight the importance Canadians place on achieving financial security in retirement, even amid mounting affordability concerns and global economic uncertainty. Nearly nine-in-10 Canadians would choose to pay 9% of their salary, with contributions matched by their employer, into a defined benefit pension plan in exchange for a secure lifetime income in retirement. This consensus is consistent across all age groups.

This sentiment persists despite significant economic uncertainty, which has left many Canadians prioritizing their daily expenses over saving for retirement. Those especially struggling include Canadians who do not own a home and homeowners with rising mortgages due to rate increases at renewal, casting doubt on homeownership as a path to a secure retirement.

Key findings Affordability issues hurt Canadians retirement  

As Canadians navigate broad economic uncertainty and affordability challenges, most (77%) are worried about the negative impact of inflation on their ability to afford their daily expenses and 60% say they have no disposable income.

With many struggling to keep up, the top concerns for Canadians are Canada–U.S. relations (67%) and the cost of daily living (67%). Other concerns include:

• economic uncertainty (65%)
• housing affordability (60%)
• having enough money in retirement (56%)

Canadians are particularly worried about the impact of geopolitical uncertainty, including global trade tensions, on:

• the increasing cost of living (61%) and housing (54%)
• their retirement savings (46%)
• losing their jobs (33%)

Rising expenses and economic uncertainty have hurt Canadians’ retirement savings and outlook. Fifty-nine per cent of unretired Canadians do not think they will ever be able to retire due to their financial situation. Half (49%) have not set aside any money for retirement in the past year and 39% have never saved for retirement.

The economic challenges facing Canadians have also taken a toll on their well-being, leaving them more likely to feel anxious (52%, +7 pts from 2024), fearful (48%, +6) and sad (47%, +6) about their finances.

Many see homeownership as part of a retirement plan, despite challenges

Despite the challenges posed by a lack of affordable housing and a struggling housing market, nearly two-thirds (62%) of Canadians view homeownership as a key part of their retirement strategy, either as a financial investment or a source of stability in retirement.

As part of their strategy, half (50%) of unretired homeowners plan to rely on the sale of their home to set themselves up for retirement. Yet only 30% of Canadians who do not own a home say they have enough money coming in to save, and 62% are worried about the impact of interest rates on their ability to buy a home.

Meanwhile, a growing proportion of unretired homeowners are concerned about their ability to pay off their mortgage so they can retire when planned (65%, up 14 pts from 2024). In fact, 66% of homeowners with a mortgage say their payments have increased in the past year or are expected to go up within the next 12 months. Of this group:

• 78% agree the increase has meant or will mean cutting back in other areas to continue to afford their housing.
• 78% agree the increase has or will reduce their ability to save for retirement.

Non homeowners struggling, less prepared for retirement 

With affordability top of mind for many, more than a third (36%) of Canadians report having less than $5,000 in savings, including for retirement, and one-in-five (20%) have no money saved. Those who do not own a home are significantly more likely to have less than $5,000 saved (57% vs. 19% of homeowners).

The rising cost of rent is also a concern for most (84%) non-homeowners. In fact, the top financial priority for non-homeowners is paying rent (66%), while homeowners are more likely to focus on saving for retirement (54%). Only 38% of non-homeowners selected saving for retirement as a priority.

This may help explain why unretired homeowners are twice as likely as non-homeowners to have ever saved for retirement (71% vs. 36%).

Notably, the results suggest having a workplace pension can help Canadians save more, regardless of homeownership. Just 13% of homeowners and 50% of non-homeowners with pensions reported having less than $5,000 in savings, compared with 33% of homeowners and 66% of non-homeowners without retirement benefits.

Canadians see pensions as key to retirement security

Canadians continue to face rising prices, rents and mortgages, leaving many concerned about how these challenges could affect their futures:

• 66% of unretired Canadians expect to continue working in retirement to support themselves financially.
• 49% of all Canadians are concerned about outliving their retirement savings and 46% expect their quality of life to decrease in retirement.

Having a pension improves Canadians’ outlook. Canadians with a defined benefit (DB) pension are most likely to agree they will be able to meet their financial needs in retirement (59%), followed by 55% of those with a defined contribution pension and 30% of those without retirement benefits.

Most Canadians also recognize the value pensions provide, with nearly two-thirds (62%) agreeing that amid global uncertainty, workplace pensions are of greater value for individual contributors.

Underscoring this, an overwhelming majority of Canadians (88%) would choose to pay 9% of their salary, with contributions matched by their employer, to a DB pension plan in exchange for a lifetime income in retirement. Canadians of all ages see the value of a DB pension and would opt-in if they could, including:

• 82% of those aged 18 to 34
• 88% of those aged 35 to 54
• 92% of those aged 55 to 64
• 93% of those 65+

Conclusion

Amid mounting affordability challenges, broad economic uncertainty and ongoing trade tensions, most Canadians are prioritizing their daily expenses over saving for retirement. Those who do not own a home, as well as homeowners with rising mortgage payments, are especially worried about the impact of their housing expenses on their ability to afford day-to-day expenses.

Remarkably, these difficulties have not diminished Canadians’ desire to contribute to a defined benefit (DB) pension plan in order to receive a secure, lifetime income in retirement. This reflects Canadians’ understanding of the importance of retirement security, and the value of a DB pension for workers.

The findings suggest Canadians understand the societal value provided by pensions and believe more workplaces should offer these benefits:

• 83% of Canadians agree it is in everyone’s best interest for more people to have better retirement savings.
• 78% agree companies have a responsibility to offer a pension plan that workers can access for adequate retirement income.
• 73% agree that regardless of economic conditions, companies could afford to offer workers good pensions if they wanted to.

These findings are based on an online survey of 2,000 Canadians aged 18 and older from April 11 to 16, 2025. A random sample of panelists was invited to complete the survey from a set of partner panels based on the Lucid exchange platform. These partners typically use double opt-in survey panels, blended to reduce potential skews in the data from a single source. The margin of error for a comparable probability-based random sample of the same size is +/- 2.19%, 19 times out of 20. The margin of error will be larger for data that is based on sub-groups of the total sample. The data were weighted according to census data to ensure the sample matched Canada’s population according to age, gender, educational attainment and region. Totals may not add up to 100 due to rounding.

I think the most telling finding is most Canadians would be willing to contribute 9% of their salary to a DB pension if their employer matches their contribution in order to have lifetime income during retirement. 

Our politicians in Ottawa need to wake up and have a royal commission on retirement security to explore ways we can address the needs of a growing population that wants a DB pension.

Alright, let me end it there, I suggest everyone reads the report in detail here. 

Below, Blueprint Financial discusses the retirement crisis in Canada in 9 minutes, referring to HOOPP's findings. Take the time to watch this and ask your politicians to take retirement security more seriously -- it's a national crisis. 

And no, most Canadians don't need $1 million to retire but they certainly can't retire on $5,000 or less in savings and people need to wake up and crunch the numbers properly. Parallel Wealth explains and to be truthful, I have some questions on some of his numbers but he highlights important points worth noting.

Suzie Neuwirth of Alternative Credit Investor reports Canada’s largest pension plan backs Nuveen’s Australian RE debt fund: 

Nuveen’s Australian commercial real estate debt strategy has secured an A$300m (£144m) investment from the Canadian Pension Plan Investment Board (CPP Investments), bringing total commitments to more than A$650m.

The Canadian pension plan, through its subsidiary CPPIB Credit Investments, joins existing investors Teachers Insurance and Annuity Association of America (TIAA) and Temasek.

Nuveen said that the fund, which has now reached second close, is expected to exceed A$1bn in total assets under management (AUM) including capital approved for co-investments.

The strategy is already more than 40 per cent deployed, focusing on senior and junior loans secured by prime real estate in Australia.

There is a preference for industrial, logistics and residential sectors, with a selective approach to retail and office space across major cities in the country.

The strategy is led by Dugald Marr, Nuveen’s head of debt Australia and New Zealand.

“This is another milestone for the strategy,” said Andrew Kleinig, head of Australia and the global client group for South East Asia at Nuveen.

“With CPP Investments’ commitment, we will continue our focus on strategic, in-depth partnerships with the highest calibre of investors. We are excited to work with a like-minded partner who also shares a high conviction on the asset class.

“CPP Investments has provided significant value-add as a strategic investor, ensuring long-term success and growth of the partnership. It showcases Nuveen’s pedigree in real estate investment and our ability to bring regionally tailored solutions across both equity and debt platforms. We believe Nuveen’s offering across real assets more broadly is well-positioned to help clients across Asia navigate volatility alongside managing their responsible investment goals.”

Raymond Chan, managing director and head of APAC Credit at CPP Investments, said: “Australia is one of our key markets in Asia Pacific and this transaction marks an important milestone for our credit strategy in the region. The investment builds upon our extensive market research and insights from our successful investments in Australia.

“Leveraging Nuveen’s strong local network and capabilities, this partnership enables us to tap into attractive real estate debt investments in Australia and further augment our credit program in the region. These opportunities offer stability and attractive yields amid global volatility, contributing to long-term returns for the CPP fund.”

Nuveen is a global asset manager with over US$1.3tn (£1tn) AUM. 

Last week, CPP Investments issued a press release stating it has committed A$650 Million to Nuveen Australian Real Estate debt strategy:

Sydney (June 12, 2025) – Nuveen, one of the largest asset managers globally with over US$1.3 trillion AUM*, has reached second close of its commingled Australian commercial real estate debt strategy with commitments of over A$650 million.

Canada Pension Plan Investment Board (CPP Investments), through its subsidiary CPPIB Credit Investments Inc., invested A$300 million, joining Teachers Insurance and Annuity Association of America (TIAA) and Temasek as strategic partners of Nuveen for this strategy. Total AUM are expected to exceed A$1 billion including capital approved for co-investments.

The strategy is already more than 40% deployed via committed loan investments focusing on institutional senior and junior loans secured by prime real estate in Australia. Preferred sectors for the strategy are industrial / logistics and residential, with a selective approach to retail, office and alternatives across major cities in Australia.

The strategy leverages both Nuveen Real Estate’s global debt platform, which currently has over 55 dedicated specialists, and the team of more than 60 at Nuveen Real Estate in Asia. The strategy is led by Dugald Marr, Nuveen’s Head of Debt Australia and New Zealand (featured above), and the support of an experienced team with a long track record of originating and structuring high-quality loan investments in this market.

Investments are also aligned to Nuveen Real Estate’s comprehensive responsible investment processes and ESG factor analysis. This includes waste reduction and energy consumption, climate risk analysis and social aspects with the ability to structure Green Loans or Sustainable Linked Loans where applicable to incentivise ESG targets on behalf of clients.

The investment comes at a time when Australian commercial real estate debt offers the potential for a compelling blend of stability, attractive yields, and strong collateral protection, all of which are increasingly important to investors concerned about global volatility.

Australia’s mature market, supported by robust economic foundations, strict regulatory requirements for banks and the need for more alternative capital sources provides a good foundation for long-term investment in this space.

The strategy will continue to focus on repeat institutional borrowers, conservative lending parameters and prime assets in sectors that benefit most from Australia’s high population growth and limited supply.

Andrew Kleinig, Head of Australia and the Global Client Group for South East Asia at Nuveen, said:

“This is another milestone for the strategy. With CPP Investments’ commitment, we will continue our focus on strategic, in-depth partnerships with the highest calibre of investors. We are excited to work with a like-minded partner who also shares a high conviction on the asset class. CPP Investments has provided significant value-add as a strategic investor, ensuring long-term success and growth of the partnership. It showcases Nuveen’s pedigree in real estate investment and our ability to bring regionally tailored solutions across both equity and debt platforms. We believe Nuveen’s offering across real assets more broadly is well-positioned to help clients across Asia navigate volatility alongside managing their responsible investment goals.”

Raymond Chan, Managing Director & Head of APAC Credit at CPP Investments, said:

“Australia is one of our key markets in Asia Pacific and this transaction marks an important milestone for our credit strategy in the region. The investment builds upon our extensive market research and insights from our successful investments in Australia. Leveraging Nuveen’s strong local network and capabilities, this partnership enables us to tap into attractive real estate debt investments in Australia and further augment our credit program in the region. These opportunities offer stability and attractive yields amid global volatility, contributing to long-term returns for the CPP Fund.”

*Top 20 largest global asset manager based on Pensions & Investments, 12 Jun 2023. Rankings based on total worldwide assets as of 31 Dec 2022 reported by each responding asset manager, with 434 firms responding; updated annually. TIAA is the parent company of Nuveen.

About Nuveen

Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1.3 trillion in assets under management as of 30 September 2024 and operations in 27 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.

Nuveen Real Estate is one of the largest investment managers in the world with US$142 billion of assets under management. Managing a suite of funds and mandates, across both public and private investments, and spanning both debt and equity across diverse geographies and investment styles, we provide access to every aspect of real estate investing.

With over 90 years of real estate investing experience and more than 770 employees* located across 30+ cities throughout the United States, Europe and Asia Pacific, the platform offers global reach with deep sector expertise, providing investors access to high quality investments across the private real estate investment landscape. For further information, please visit us at nuveen.com/realestate

*Includes 360+ real estate investment professionals, supported by a further 411 Nuveen employees. Source: Nuveen, 31 March 2025.

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 22 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2025, the Fund totalled C$714.4 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Instagram or on X @CPPInvestments. 

This is a very nice deal with Nuveen's Australian commercial real estate debt strategy.

Nuveen, the investment manager of TIAA and is a partner of choice for many large Canadian funds.

You'll recall La Caisse partnered up with them in 2024 on a US$600 million commercial real estate joint venture. 

More recently, La Caisse and Nuveen provided Redaptive with a $650M credit facility.

Basically Nuveen is a well-known asset manager which takes responsible investing very seriously.

That's an added benefit to these large pension funds looking to lower their carbon footprint.

This commercial real estate debt fund has big investors like TIAA and Temasek and the strategy will focus on industrial / logistics and residential properties, with a selective approach to retail, office and alternatives across major cities in Australia. 

The press release states already more than 40% deployed via committed loan investments focusing on institutional senior and junior loans secured by prime real estate in Australia.  

I know, the "junior loans" part doesn't sound to risk averse but I'm sure the bulk is senior secured debt and these people know what they're doing.

Raymond Chan, Managing Director & Head of APAC Credit at CPP Investments, summed up the deal nicely:

“Australia is one of our key markets in Asia Pacific and this transaction marks an important milestone for our credit strategy in the region. The investment builds upon our extensive market research and insights from our successful investments in Australia. Leveraging Nuveen’s strong local network and capabilities, this partnership enables us to tap into attractive real estate debt investments in Australia and further augment our credit program in the region. These opportunities offer stability and attractive yields amid global volatility, contributing to long-term returns for the CPP Fund.”

Again, CPP Investments' Credit Investments invests in both public and private credit and credit-like products globally. This includes investments across corporate, consumer and real assets credit along the credit rating spectrum, except for local currency government bonds.

These assets make up roughly 16% of total assets ($114 billion out of $714 billion) and a huge chunk of that is in private credit through their Antares Capital holdings (they own 84% of it and sold a 16% stake in Antares to Northleaf Capital Partners in 2016).  

Credit Investments generated 16.5% net last fiscal year, a performance that was mainly driven by European investments and Antares Capital. 

As shown below, 14% of the Credit Investments assets are in real estate loans and Asia Pacific makes up 7% of their Credit assets:

What is the attraction of Australian commercial real estate debt? I can sum it up as follows: Nuveen has an experienced and dedicated credit team there that will deploy the assets strategically and deliver excellent risk-adjusted returns. 

This once again shows how important strategic relationships with strong partners are as it allows the CPP Fund to leverage off these relationships to deploy capital across the world wherever they see excellent opportunities.

And as always, they're is a co-investment component there too to reduce fee drag.

Below, Joe Christie from Capital Property Funds delves into private credit lending, particularly the differences between secured and unsecured lending in commercial real estate debt markets (September, 2024).

Also, in the past decade, Australia’s major banks witnessed a 16% decline in their commercial real estate debt share, with over $74 billion now sourced from alternative non-bank lenders. This rise in non-bank lending has ushered in a wave of new lenders. While this market remains attractive to investors seeking competitive returns in a diversified portfolio, it's crucial to note that not all funds are alike. Before diving in, investors must weigh these 4 pivotal factors carefully. Henry Elgood of Trilogy Funds discusses (July 2024).

Lastly, Saira Malik, Chief Investment Officer, Nureen shares expert insights on market trends, strategic portfolio considerations, and the evolving investment landscape with Bloomberg's Kara Wetzel at The Future Investor: Finding the Opportunities event in San Francisco (2 weeks ago).

Barbara Shecter of the National Post reports public sector pension fund looks for more ways to invest in Canada as US risks grow:

The Public Sector Pension Investment Board has been quietly assessing whether it has under-utilized a “home-ice advantage” and is looking for more ways to invest in Canada, chief executive Deb Orida said, a potentially timely pivot as the United States, a popular destination for pension investments, is looking riskier.

The internal look at portfolio design also comes as Ottawa is looking to “catalyze” billions of dollars in private investment to shore up the economy and reduce dependence on the U.S.

“We’re asking (ourselves) whether there’s opportunities to leverage our global capabilities in areas like infrastructure here at home,” Orida said as the investment manager for the pensions of federal government workers, the Canadian Forces and the Royal Canadian Mounted Police posted a 12.6 per cent return for the fiscal year that ended March 31, with assets climbing to nearly $300 billion.

She said the renewed focus at home stemmed from a wide consideration of factors influencing investing, including geopolitical realignment over the past couple of years, and was not done in direct response to either the Canadian government‘s desire for stepped-up domestic pension investments or the potential for tax and trade tensions with the U.S. to change the value proposition of investing there.

“It may have all come together at the same time. But really, for us, it’s about having the capabilities… better capabilities than we did, say, a decade ago, to make good investments in Canada, because we have this expertise and ability to add value,” she said.

International expertise that could be brought to assets in Canada, should they be made available, includes investing in airports and data centres, she said, adding that PSP has a subsidiary that specifically invests and operates airports around the world. Earlier this year, AviAlliance sold a stake in the Budapest airport and purchased three others in the United Kingdom: Aberdeen, Glasgow and Southampton.

As for data centres, PSP Investments and Macquarie Asset Management bought a control stake in AirTrunk in 2020 that was profitably sold in 2024 to a consortium of investors led Blackstone.

PSP has around $70 billion in investments in Canada, representing about 20 per cent of its portfolio, and that’s before including the purchase of a minority stake on Ontario’s 407 toll road, a deal that closed this month.

Orida said there is not a specific target for increasing domestic investments. Rather, the pension manager will include its new focus on what’s it’s calling the “Canada power intersection initiative” in making decisions that maximize returns without taking on undue risk.

PSP Investments is also focusing on its platform in Europe.

“We’re well positioned in Europe. We have a great team in London,” she said. “It’s a cross-asset class team where we have private equity, real estate, infrastructure, (and) private credit expertise.”

As for the United States, she said there has been no decision to pause or pull back on investments there as a result of trade and potential tax developments. But new risks are being taken into consideration, including the potential for new tax costs stemming from a controversial bill making its way through the U.S. Congress, when assessing investments there, she said.

“It’s not a black and white turning away. It’s rather an incorporation of the additional uncertainty, or risk, or potential implication of changes in tax laws, and then a holistic assessment of the risk adjusted return after factoring in all of that right relative to your other opportunities,” Orida said.

The potential changes to years of favourable tax treatment, which may be applied to Canadian investors in the U.S. if the Senate passes the legislation as the House of Representatives has done, are contained in section 899 of a large budget package U.S. President Donald Trump has dubbed “One Big Beautiful Bill.”

“We have analyzed the potential impacts of 899, and looked at different scenarios and analyzed the potential impacts on our existing portfolio,” she said. “As well, (we have) put thought to how we would incorporate that into new underwritings if there are new underwriting that are attractive, and how we would try to incorporate that uncertainty and potential impact.”

Earlier today, PSP Investments issued a press release stating it continues its track record of strong returns and portfolio resilience with a 12.6% return in fiscal 2025, net assets approach $300 billion:

• Five and 10-year net annualized returns of 10.6% and 8.2%. 

• $31.9 billion in cumulative net investment gains above the Reference Portfolio over the last 10 years. 

• One-year net return of 12.6% and outperformance of the Reference Portfolio, demonstrating the resilience of our investment portfolio.  

Montréal, Canada, June 13, 2025 - The Public Sector Pension Investment Board (PSP Investments) ended its fiscal year on March 31, 2025, with a 12.6% one-year net return, outperforming the one-year Reference Portfolio return by 1.5%. Led by strong performances from the Infrastructure, Private Equity, Public Market Equities, and Credit Investments portfolios, as well as from foreign currency exposure, these results continue PSP Investments’ track record of delivering strong long-term returns and added value through strategic asset allocation and active management decisions. PSP Investments also outperformed its five-year and 10-year benchmarks. 

Net assets under management (AUM) grew to $299.7 billion, a 13.2% increase over the previous fiscal year, primarily driven by $33.5 billion of net income. Net transfers reached $1.3 billion, which included $3.2 billion received from the federal government for the funding of the plans and $1.9 billion that PSP Investments transferred back to the Consolidated Revenue Fund from a “non-permitted surplus,” as defined under the Public Service Superannuation Act, which limits the amount the Public Service Pension Fund can be overfunded.  

“PSP Investments demonstrated significant organizational capabilities in delivering strong returns and showing resilience in uncertain times,” said Deborah K. Orida, President and CEO at PSP Investments. “We are proud of the excess return we generated over the one-year, five-year and 10-year periods. This demonstrates the strength and resiliency of our portfolio design and the benefits of investing with focus and foresight.  We have the right strategy, talent and partners in place to continue to fulfill our important mandate.”   

PSP Investments measures success at the total fund level through the following performance objectives: 

• Achieve a return, net of expenses, greater than the return of the Reference Portfolio over a 10-year period: By the end of fiscal year 2025, PSP Investments achieved a 10-year net annualized return of 8.2%, which represents $31.9 billion in cumulative net investment gains above the Reference Portfolio and an outperformance of 1.3% per annum. This result was achieved without incurring more pension funding risk than the Reference Portfolio. The 1.3% outperformance represents the value added by PSP Investments from its strategic asset and currency allocation, active management decisions, and careful execution.  

• Achieve a return, net of expenses, exceeding the Total Fund Benchmark return over 10-year and 5-year periods: By the end of fiscal year 2025, PSP Investments achieved a 10-year net annualized return of 8.2% against the Total Fund Benchmark return of 7.1%, and a five-year net annualized return of 10.6% against the Total Fund Benchmark return of 9.1%. This represents $18.8 billion in excess net investment gains over 10 years and $13.8 billion in excess net investment gains over five years.   

Highlights of portfolio performance by asset class. All figures as at March 31, 2025. 

The table below presents the annual, five-year and ten-year annualized performance of the asset classes set out in our Statement of Investment Policies, Standards and Procedures. For a detailed performance analysis of each asset class, please visit investpsp.com or download the annual report here. 

Costs
As a long-term investor, we assess our costs in the context of the excess return, net of all costs, achieved over the Reference Portfolio. To this end, PSP Investments generated cumulative net investment gains, net of all costs, of $3.9 billion and $31.9 billion in excess of the Reference Portfolio over the one-year and 10-year period, respectively. To deliver this excess return, PSP Investments incurred operational costs of $790 million, investment costs of $1,609 million and financing costs of $1,465 million during the fiscal year 2025. These are in line with the costs incurred during the previous fiscal year despite a higher AUM and reflect our disciplined approach to cost management.  

About PSP Investments

The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investors with $299.7 billion of net assets under management as of March 31, 2025. It manages a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources, and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow us on LinkedIn. 

Alright, it's Friday, I had an extremely busy morning and want to go over PSP Investments' fiscal 2025 results.

On Thursday, I had a Teams meeting with PSP's CEO Deborah Orida and will get to that below.

First, let me quickly go over some items from the 2025 Annual Report available here. 

Below are the 2025 financial highlights:

Clearly PSP Investments had an outstanding fiscal 2025, gaining 12.6%, beating its Reference Portfolio return by 1.5% (no mention of whether they beat their benchmark portfolio in fiscal 2025).

More importantly, by the end of fiscal year 2025, PSP Investments achieved a 10-year net annualized return of 8.2%, which represents $31.9 billion in cumulative net investment gains above the Reference Portfolio and an outperformance of 1.3% per annum.

Also the press release mentions by the end of fiscal year 2025, PSP Investments achieved a 10-year net annualized return of 8.2% against the Total Fund Benchmark return of 7.1%, and a five-year net annualized return of 10.6% against the Total Fund Benchmark return of 9.1%. This represents $18.8 billion in excess net investment gains over 10 years and $13.8 billion in excess net investment gains over five years.   

In terms of asset class and geographic exposures, PSP Investments invests half its total assets in private markets (Infrastructure, Real Estate, Private Equity, Natural Resources, Private Credit in Credit Investments) and half in public markets (stocks, bonds and liquid alternatives like hedge funds in Global Alpha portfolio). 

Geographically, assets are invested globally with Canada (20%) and the US (40%) making up the bulk followed by Europe (16%):

Worth noting that PSP has a sizable allocation to Natural Resources, way ahead of its peers there, and this portfolio adds important diversification benefits and inflation protection.

Next, take the time to read Chair Maryse Bertrand's message:

 I note the following: 

On April 1, 2025, PSP Investments marked its 25th anniversary. Since inception, the organization has evolved into a sophisticated global investor, with net assets under management of $299.7 billion. As of March 31, 2025, we were third largest among Canada’s public pension investors.  The Board has played an important role in this success, providing strong oversight and guidance to ensure the organization manages its growth and delivers on its long-term mandate.  In fiscal 2025, our discussions focused on discharging our responsibilities for strategy, risk, and financial and human capital matters. Against a backdrop of geopolitical developments, and the transformation of the economy and evolving priorities in Canada and globally, we keenly followed and supervised how PSP Investments is adapting to the changing environment. At the enterprise level, we also engaged with senior management on the evolution of the organization’s culture and efforts to attract and develop the best talent.  As PSP Investments has expanded globally, cost discipline and improving analytical capabilities through modern platforms and tools have long been focus areas for the Board. We wholeheartedly supported management in making operational excellence one of the three pillars of the corporate strategy and are closely tracking progress. 

Also read CEO Deborah Orida's message: 

I note the following: 

As we have seen, market volatility and uncertainty have increased in the wake of US tariff announcements. Our well-diversified portfolio encompasses high-quality assets and multiple investment strategies aimed at maximizing long-term returns, managing risks, and building resilience. We have ample liquidity to maintain our focus on delivering returns over the long term, and we continue to proactively incorporate potential shifts in global dynamics and economic conditions into our portfolio design process, risk management and investment decisions.

And this: 

In fiscal 2025, we launched our three-year corporate strategy, which focuses on excellence in the way we invest, operate, and live our mission. As part of our strategy, we are taking a more focused approach to our active investing activities, doubling down on our areas of expertise and conviction to drive greater risk-adjusted active returns. This strategy is enabled by the deep investing capabilities we have developed over the last 25 years. 

For example, PSP Investments has been investing in infrastructure since 2006, and we have developed strengths in transportation, data infrastructure and energy, where we can leverage our platform approach to make value-added investments. The acquisition of three airports in Scotland and the wider United Kingdom (Aberdeen, Glasgow and Southampton) by our wholly owned subsidiary AviAlliance is a prime example of our strategy in action. Leveraging our global airports expertise, we acquired assets with significant value-creation potential and subsequently syndicated part of the investment to Blackstone. 

We also announced our largest-ever Canadian transaction, a multibillion-dollar investment in 407  Express Toll Route (407 ETR), a toll highway spanning the Greater Toronto Area.

This stable, long-duration investment fits our infrastructure strategy and supports a critical road serving more than 3 million Canadians weekly. 

In fiscal 2025, we also crystallized value for contributors and beneficiaries through some of our largest-ever dispositions. This included the sale of our stake in AirTrunk, a hyperscale data centre platform in the Asia Pacific region, which experienced phenomenal growth during the time of our ownership. The sale yielded exceptional returns beyond our investment base case, reflecting both the outstanding performance of the company and the high valuations within the sub-sector.

In addition, I want to commend the team at our subsidiary, Canada Growth Fund Investment Management (CGFIM1), who have closed 12 transactions across five provinces since CGFIM’s launch in the summer of 2023. As of March 2025, they had committed $2.4 billion to projects aimed at accelerating the growth of Canada’s clean economy. You can learn more about the Canada Growth Fund through its annual report. 

Below is PSP's executive team:

Discussion With PSP's CEO Deborah Orida

Alright, let me get to my discussion with Deborah (Deb) Orida or else this comment will be endless and it's the weekend and most people never read my Friday comments (they'll read this one).

I want to thank Deb for taking the time to talk to me and also thank Maria Constantinescu for setting up the Teams meeting and sending me the press release ahead of time  (I did not have access to the full report until today when it was made public).

I began by asking Deb to give me an overview of the results and she did:

 As you said, we've had a great year, 12.6% is very good. But what I most proud of is continuing the track record of performance over the longer term which I know you're focused on as well. On both the 5 and 10-year basis, we outperformed the Reference Portfolio and the Benchmark and in total since inception we have now delivered cumulative net income of $205 billion.  

It's been really great and I can't take credit for all of it. A lot of it is leveraging the deep expertise PSP has in areas like Infrastructure which delivered 17.8% last year, Credit Investments which delivered over 15% last year and I think we are well positioned for the future.

I said these were extremely strong results with value added coming from all asset classes including Fixed Income which gained a little over 10% last year (shockingly unless their Global Alpha, ie. external hedge fund portfolio is managed via Fixed Income portfolio and that's not clear to me).

I shifted my focus to private markets noting Private Equity had another solid year and PSP's approach has always been solid fund investments and co-investments with a few key strategic partners.

I told Deb the almost 17% return in PE kind of shocked me because if you look at large peers, they're struggling a bit in this asset class as there are a lot of headwinds (higher for longer, historically low distributions, etc). Again, I didn't have access to the annual report to read the details but Deb shared this with me:

In Private Equity, we've had the benefit of taking a combined funds and direct approach. When Simon (Marc) came in, he brought the two groups together, so there wasn't that competition for growth between funds and directs that you might have in other funds. It's one team taking a combined approach. 

This has allowed us to focus on good partners, extract good co-investment opportunities out of that focus on those relationships. We've also been patient around the allocation. As you know, when we and others had the denominator effect that PE looked over-allocated, but as you also know at PSP, we have the long-term policy allocation target allocation as well as the medium-term approach which allows us to be patient as we think about how those allocations love along relative to the long-term target.

In this last year, we did do a secondary but it was executed at a pretty good price as opposed to a price we might have faced if we forced ourselves to sell down when everyone else was also experiencing the impacts of the denominator effect.

[**Note this from annual report:" Private Equity generated over $9.4 billion in cash distributions in fiscal 2025, driven by direct exits, refinancings and secondary sales, despite global merger and acquisitions slowdown. These asset monetization initiatives significantly contributed to the advancement of the portfolio recalibration, bringing allocation down by 1.7% this year, to 13.6%.]

I noted the Yale endowment recently sold $3 billion in private equity fund stakes and reportedly took a haircut of 10% (interestingly, they're trying to get ahead of the tsunami of selling in secondaries market).

I shifted my attention to Credit Investments which continue to deliver strong returns, gaining 15.4% last fiscal year. Credit Investments on non-investment grade credit investments in North America and  Europe across private and public markets, as well as rescue financing opportunities.

Deb shared this with me:

We're almost 10 years, establishing the business in 2015. It's a well-established team. In that almost 10-year period we delivered inception-to-date 12%, most of that was in a lower rate environment, so it's a team with a deep track record. This year's returns at over 15% are very strong.

But I think most importantly, as you're seeing a bunch of new entrants in that market, our long-term track record --you're right we have a team in London but we also have folks in New York and Montreal -- so it's a well established team and it's a team that's well positioned to take advantage of the broader relationships that we have at PSP as a multi asset class investor. 

So where new private credit funds might be anxious to deploy, we are being more patient and we can also leverage the relationships that we have with the sponsors across private equity, infrastructure and real estate to make sure we are getting the good calls.

She's absolutely right about that, the Credit Investments team at PSP is very experienced and along with that at CPP Investments, I'd say they're the two best teams in the global institutional world and are very smart and careful in how they deploy capital and leverage off their strategic relationships across all asset classes.

[**Note: Private Credit was initiated at PSP under the watch of Andre Bourbonnais, he deserves the credit for that asset class.] 

I then shifted my attention to Real Estate where it didn't surprise me returns were flat last year and asked her to discuss the structure of that portfolio. 

Deb responded:

On Real Estate, you're right, flattish performance. This year, we continue to see some pain in some of the specialty areas of offices like life sciences and studios, offset by strong performance in areas like logistics. 

Overall, over the last couple of years, we've done some good work on focusing the strategy on sectors and geographies where we have expertise and a track record of success and conviction around the future.

We've also been refining our partner portfolio and I would say the team has been rolling up their sleeves, tackling and preserving and in some cases creating value in some of the more challenging investments we have in the portfolio. 

We don't see it in the returns yet but I think we are doing the right things.

I asked her if that portfolio remains an important one at PSP as it was 15% at one point and she replied:

We are sub 10% now (8.9%) and Real Estate remains part of a broadly diversified portfolio. As you know, PSP is 50% public markets and 50% private alternatives and I think Private Equity, Infrastructure, Private Credit, Real Estate and Natural Resources remain the right contributors to the diversification of the portfolio.

I agree, shifted my attention to Infrastructure which had a stellar year returning almost 18% last year (17.8% to be exact). I talked about how PSP and KKR teamed up to buy AEP Transmission stake for $2.8 billion earlier this year (see my comment here) but asked Deb why this portfolio surged last year.

She replied:

Well, you know this Leo, PSP has been investing in some of the areas that have become hot more recently for years. We've been investing in data centres for years and the opportunity we had to sell AirTrunk for example which was the world's largest data centre transaction when Blackstone and CPPIB bought it from us was an opportunity to realize the value that had created by backing what was originally a smaller platform to grow and then take advantage of the enthusiasm n the market for that type of asset. So it's really about having the opportunity to realize some of the value creation from the capabilities we've been investing in for years.

The other capability that has created and will create value for us in the future is AviAlliance, our airports platform where we sold Budapest this year, we bought  AGS Airports that owns and operates Aberdeen, Glasgow and Southampton airports. When we bought AGS, it was the fact that we had operating expertise in that airports platform that allowed us to buy assets that had value creation opportunities. And after we did that deal, Blackstone was interested in co-investing with us, not the other way around. 22% went to Blackstone.

No doubt about it, PSP Investments has one of the best airports platforms among institutional investors and AviAlliance is doing a great job:

I also mentioned PSP Investments recently bought a stake in Highway 407, a great Canadian asset and Deb responded:

Great point, you know we're really proud of our investments in Canada. At the end of the fiscal year, we had almost $70 billion invested in Canada and that was of course before the 407 because it closed in June. 407 was or largest single investment in Canada to date and also an opportunity to leverage our deep infrastructure expertise in tool roads in particular. 

At that point we covered the main asset classes and my apologies to the Natural Resources team which delivered a solid 8.6% gain last year as I didn't delve deeply into their activities but read about them in the annual report:

 

I asked Deb what is going on with the non-permitted surplus and how it's affecting PSP. 

She responded:

As you know, at our stage of maturity, the biggest source of the growth of the Fund is actually from the income of the Fund. When you think of the fact that our net contributions from Ottawa were $1.3 billion and obviously the portfolio grew by tens of billions. So the puts and takes from Ottawa are not the main source of our growth. 

That said, we were very happy how we worked with our sponsor to operationalize the transfer of the money from the non-permitted surplus back to Ottawa. They were very thoughtful about doing it in a way that would not impact the returns or force us to sell something when it wasn't the right time. 

I think the fact that there is a non-permitted surplus is in some ways a testament to the capabilities at PSP and the returns we were able to generate even within our risk budget. We will continue to owrk with our sponsor and manage that as we need to. 

Finally, I noted Patrick Charbonneau was appointed the new CIO earlier his year and it feels like a long and crazy year with the tariff saga and we are not done yet as the second half of the (calendar) year is only unfolding now.

I asked Deb how PSP is adapting to the insane volatility in markets and rising geopolitical risks.

She replied:

I would say two things. One is as we face volatility and the risk of future volatility, I'm really happy not only we have Pat in the CIO seat but we also have Alexandre Roy in the CRO seat. Alexandre started in Risk but then became the number two in our CIO Office before he became the Chief Risk Officer and in the volatility we faced in April after Liberation Day, I could not have been happier -- because I think Alex has been at PSP 18 or 19 years -- so I could not have been happier we had someone as smart, committed and knowledgeable about PSP in the CRO seat as Alex. 

So Alex will help us manage the short-term and we are well positioned from a liquidity standpoint so we can stay focused on the long term through volatility like that. 

And as it relates to the long term, I think the big opportunity for Pat in the CIO seat is we have good portfolio design capabilities, so we don't need to change that, that's not why Pat has become the CIO.  

But rather the expertise that Pat has -- deep expertise in private markets, infrastructure and CEO of Canada Growth Fund -- I think is going to allow to bridge the gap between portfolio design and portfolio execution. 

He will help us with investors, particularly private market investors, being able to understand better what the Total Fund wants from their investments.

You know when I sat in an asset class, I used to just wait from the CIO Office to know how many billions of dollars I got to spend. But I think the next evolution of that is investors actually understand from a portfolio design perspective, given that we back pension liabilities that are linked to inflation, what the Fund wants from me in infrastructure is not only stability but also inflation protection and therefore I know what kind of assets I should be looking for in order to  preserve the mandate.

Great point, that's why Deb is the CEO, she understands things at a higher level and has placed key people to focus on execution and preserving that mandate.

As I noted, portfolio design is there, now it's all about execution and thinking about the Total Portfolio and making sure the liabilities are met especially that inflation protection component.

We touched on the activities on the Canada Growth Fund and she told me she's happy Yannick Beaudoin took over the helm from Pat and they continue to execute that mandate very well, up to 13 transactions and $2.7 billion committed across carbon capture, cleantech and critical minerals. "And most of the money has been committed in western Canada."

I asked her one last quick question on Michael Sabia and Marc-Andre Blanchard going to Ottawa to serve Prime Minister Carney and she said she has "great respect" for both of them and "we as Canadians are very lucky to have their service to the country." 

I completely agree and  wrapped it up there.

Once again, I thank Deb for another illuminating discussion and I feel PSP is very lucky to have her at the helm of this organization (hope to meet her in person one day as I feel I know her well now). 

Below, Tom McClellan, The McClellan Market Report editor, joins 'The Exchange' to discuss how the markets are digesting Israel's airstrikes against Iran.

Next, Stephanie Link, chief investment strategist at Hightower Advisors, says current market dips are buying opportunities. She favors growth stocks like Snowflake and turnaround plays like Gap, but avoids bonds for now.

Third, Bob Elliott, Unlimited CEO, and Krishna Guha, Evercore ISI global policy head, join 'Closing Bell Overtime' to talk the day's market action.

Lastly, DoubleLine Group CEO Jeffrey Gundlach talks about the price of gold, fixed income, private credit, President Donald Trump's tax bill, Federal Reserve monetary policy and artificial intelligence with Lisa Abramowicz at the Bloomberg Global Credit Forum in Los Angeles.

Mathieu Dion of Bloomberg reports CDPQ looks to trim US assets as CEO worries about stagflation: 

The head of Caisse de Dépôt et Placement du Québec said it’s time for the fund to scale back on US investments after years of growth and great returns.

“It’s been 10 years of US exceptionalism,” Chief Executive Officer Charles Emond said. “Obviously, you got to a point where we reached sort of a higher percentage than usual. We’re at 40% of our total fund in the US. I’d say that’s kind of the peak, like to trim a bit.” 

The rest of the article is hidden behind a paywall and for some reason wasn't posted on BNN Bloomberg which is odd.

Anyway, I don't need to read it, I can tell you right away what Charles Emond discussed on Wednesday at Le Cercle Financier in Montreal and I wasn't there.

Charles Emond recently told the Financial Times La Caisse (they changed their name back to La Caisse from CDPQ) is set to invest more than £8bn in UK over next fives years and stated this on their US exposure:

The 52-year-old chief executive said the fund’s US exposure would probably be “trimmed a little bit” as it was “at a peak after a decade of outperformance”. But he added it remained the “deepest, biggest, closest market to us and we will continue to deploy money there”.

CDPQ’s plan to invest more in Britain comes as 17 of the UK’s largest defined contribution pension providers have pledged to invest at least 5 per cent of assets in their default funds in British private markets by the end of the decade, a move the government hopes will drive £25bn of investment into the UK.

Emond said this commitment from UK pension funds could create a “positive synergy” and help attract more overseas investment into the UK. He said CDPQ was keen to invest alongside British retirement funds as “like-minded partners” with local knowledge.

The fund currently has C$25bn in France — its second-largest market in Europe — which Emond also expects to increase by 50 per cent by the end of the decade.

He added he was investing “time and effort” in exploring opportunities in Germany, with the country’s energy needs and loosened fiscal rules ushering in “a new beginning there with plenty of opportunities”. 

Basically, their US assets have done extremely well over the last decade and they're now trimming exposure (because they became a larger part of total portfolio) but remain highly committed to the "deepest, biggest, closest market".

Going forward, they're focusing their attention on the UK, France and Germany and they're not alone.

Blackstone is planning to invest up to $500 billion in Europe over the next decade, CEO Steve Schwarzman told Bloomberg Television in an interview on Tuesday, underscoring the increasing confidence in the region's prospects. Schwarzman said Europe represents a "major opportunity" for the world's largest alternative asset manager, which oversees assets worth more than $1 trillion.

Why Europe? Because rates have come down there a lot (the ECB is more aggressive than the Fed) and there is a massive fiscal thrust going on in Germany.

Typically in alternative investments, you want to go long countries where rates are declining and fiscal policy is expansionary (not just Germany, France has room to spend more too, albeit a lot less room). 

This in essence is why Blackstone likes Europe over the next decade and why La Caisse is investing close to US$10 billion in the UK over the next five years as well as in France and Germany.

There are great opportunities in Europe, it's as simple as that. 

Is the US dead? Is US exceptionalism over?

Hell no! I don't buy any of this nonsense, the US remains the economic superpower of the world and nobody is in a position to displace it.

The S&P 500 is nearly back to record highs and even though there's a lot of complacency, the pain trade remains up.

Still, European, Canadian, Australian and Asian stock markets are all up as well and that shows you global investors are widening their geographic scope.

And even though the US dollar's crown is slipping fast over tariff concerns, I don't believe it will remain weak for a long period. 

The only part of the Bloomberg article I would have liked to read is Charles Emond's thoughts on why stagflation is coming.

So far, tariffs have not shown up in the US inflation data, there are a lot of reasons why but it remains to be seen if the second half will remain as tame on on inflation.

If so, there will be mounting pressure on the Fed to cut rates aggressively.

Chales Emond alluded to mounting inflation pressures and it was reported in the French press: 

The number of companies (in their portfolio) directly affected by the U.S. President's tariffs "is quite limited," Mr. Emond said.

"Of all the companies in which the Caisse has invested, globally, approximately 6% would be directly affected by tariffs, and 12% in Quebec. The reason is that, even if we forget, tariffs are on goods. Three-quarters of the economy is services," he argued.

Nevertheless, the macroeconomic impact "hits us 100% in the wallet, which affects everyone," with a potentially stagflationary shock, Mr. Emond said.

He said he was "impressed" by the counterbalances to the US administration, which are few in number but "quite effective," citing the courts and the bond market.

Still, Donald Trump is creating "a lot of uncertainty" at the moment. "We're still in a worse place than we were at Christmas, economically," Mr. Emond said, although the economy remains, for the moment, "somewhat solid."

According to him, the Trump administration "could be walking on thinner ice in the coming months," particularly if the economy weakens and inflation is felt in the United States, with the midterm elections in about a year's time as a backdrop.

"What we have to imagine is that there will be a kind of desire to declare a kind of victory in order to move on to other things, but it will remain bumpy. I think there is a logic that will prevail," Mr. Emond said.

I certainly hope logic prevails because so far, Trump 2.0 has been an abysmal failure on all fronts, including his immigration crackdown (going to be a long, hot summer in some big US cities).  

Alright, let me wrap it up there.

Below, La Caisse celebrates its 60th anniversary, an important milestone in measuring how far it has come from its creation in 1965 to today. "On this occasion, we are affirming our convictions and identity by adopting La Caisse as our brand. This name pays tribute to the origins of our creation and proudly embodies our Québec roots."

Also, Blackstone is planning to invest as much as $500 billion in Europe over the next 10 years, Chief Executive Officer Steve Schwarzman said in an interview to mark the 25th anniversary of the money manager’s operations in London. “We see it as a major opportunity for us,” Schwarzman said in an interview with Bloomberg's Francine Lacqua on Tuesday. “They are starting to change their approach here, which we think will result in higher growth rates. So this has worked out amazingly well for us.”

In alternative investments, always follow the leader, Blackstone. 

Lastly, Brad Gerstner, Altimeter Capital Founder & CEO, joins CNBC's "Halftime Report" to discuss his AI strategy.

Fascinating insights, listen to what Gerstner says and take all the talk of "the end of US exceptionalism" with a shaker of salt.

Robert Fife of the Globe and Mail reports Carney hires Hydro‑Québec CEO Michael Sabia to head federal bureaucracy: 

Prime Minister Mark Carney has recruited Hydro‑Québec CEO Michael Sabia to take over as the country’s top bureaucrat to advance his ambitious agenda.

Mr. Sabia had served as deputy minister of finance before he left government to serve as head of the Quebec pension plan and later Hydro‑Québec.

The current Clerk of the Privy Council John Hannaford announced Wednesday that he will leaving the government as the head of the public service and top adviser to the Prime Minister.

Mr. Carney had sought out Mr. Sabia because he needed a PCO clerk with business experience, who can push through his agenda that includes major nation-building projects, a revamped military, major housing initiatives and cost-cutting expenditures for the public service.

“Prime Minister Carney asked me to take on this role at time when the country is facing some unprecedented challenges,” Mr. Sabia said in a statement.

“In that context, I am joining the federal government to tackle this challenge head on.”

The Prime Minister noted that Mr. Sabia brings over three decades of expertise across the public and private sectors. Aside from running Hydro‑Québec, Mr. Sabia headed the Caisse de dépôt et placement du Québec (CDPQ), Bell Canada Enterprises and held senior roles at Canadian National Railway, and in the Privy Council Office.

“As Canada’s new government builds the strongest economy in the G7, Mr. Sabia’s leadership will be key to this mission,” Mr. Carney said, saying he will help the government “advance nation-building projects, catalyze enormous private investment to drive growth, and deliver the change Canadians want and deserve.” 

The Canadian Press also reports Hydro-Québec CEO Sabia resigns to join Carney Privy Council:

Prime Minister Mark Carney is tapping Michael Sabia, a veteran of the public and private sector, to head up the Privy Council Office in Ottawa.

Sabia’s tenure as clerk of the Privy Council and secretary to cabinet will begin July 7. He replaces John Hannaford, who is retiring.

The Privy Council offers non-partisan policy advice to the prime minister and cabinet and is responsible for managing the broader public service.

Sabia has served as president and CEO of Hydro-Québec since 2023. He said in a statement released by the utility Wednesday that he was answering Carney’s call to serve as the prime minister pushes for a rapid transformation of Canada’s government and economy.

“Prime Minister Carney asked me to take on this role at a time when the country is facing some unprecedented challenges,” he said. “In that context, I am joining the federal government to tackle these challenges head-on.”

Sabia started his career in the public sector and spent years at the Privy Council. He was Canada’s deputy finance minister throughout the pandemic years and the early recovery period.

He served as the head of Quebec’s public pension plan for over a decade before that. He is a former CEO of Bell Canada Enterprises and former CFO of Canadian National Railway.

Sabia was named an officer of the Order of Canada in 2017.

“As Canada’s new government moves with focus and determination to build the strongest economy in the G7, bring down costs for Canadians and keep communities safe, Mr. Sabia will help us deliver on this mandate and our government’s disciplined focus on core priorities,” Carney said in a media statement.

Ari Rabinovitch of Global News also reports Carney names Hydro-Quebec’s Michael Sabia as new top bureaucrat:

Prime Minister Mark Carney has announced Michael Sabia, a longtime business leader and senior bureaucrat, as the country’s new top bureaucrat starting next month.

Sabia has been named Clerk of the Privy Council Office, the department that is responsible for supporting the Prime Minister’s Office and which plays a central role in turning government priorities into actionable policies for bureaucrats to implement.

In a statement, the role is also described one that will “advise the Prime Minister and elected government officials in managing the country, from an objective, non-partisan, public policy perspective.”

Sabia is currently the president of Hydro-Quebec. He will replace John Hannaford as Clerk of the Privy Council, with Hannaford now retiring, according to the press release. 

Carney said Sabia’s leadership will play a “key role” in helping Canada to become “the strongest economy in the G7,” and added that “Canada’s exemplary public service – with Mr. Sabia at the helm – will advance nation-building projects, catalyze enormous private investment to drive growth, and deliver the change Canadians want and deserve.”

Prior to his role at Hydro-Quebec, Sabia served as Canada’s deputy minister of finance, director of the Munk School of Global Affairs and Public Policy, and held senior leadership, CEO and president roles respectively at Bell Canada Enterprises and at Canadian National Railway. 

In case you're not very politically astute, PM Mark Carney is moving fast to surround himself with key people to fulfill his ambitious agenda.

He recruited his friend and close confidant, Tim Hodgson, to run for a seat and appointed him Minister of Energy. Hodgson has already vowed to fast-track infrastructure projects.

Carney recently recruited Marc-André Blanchard from CDPQ to become his Chief of Staff and help him coordinate policies across ministries. 

And now he has recruited another CDPQ alumni, Michael Sabia, away from Hydro-Quebec to head up the Privy Council, the department that helps the government in implementing its vision, goals and decisions in a timely manner.

Sabia is no stranger to Ottawa, he's already headed up the Privy Council years ago and did a brief stint as Deputy Finance Minister during Covid to help former Finance Minister Chrystia Freeland. 

But he was disillusioned and frustrated with what he saw and decided to come back to Quebec to head up the largest power utility in Canada and a major player in the global hydropower industry. 

Michael Sabia has very powerful friends (the Desmarais family staunchly supports him) and he always lands on his feet.

I'm not convinced he enjoyed being the head of Hydro-Quebec as much as being the head of CDPQ so I can't say I'm shocked he's leaving that organization to go to Ottawa to head up the civil service.

Similar to Marc-André Blanchard, Sabia has deep roots in policy-making, he  feels compelled to join Prime Minister Carney at this critical time to serve his country.

And neither he or Blanchard are taking these positions for the money, obviously.

But pay attention here. 

It's not by accident that Nathaniel Erskine-Smith, the former Minister of Housing, Infrastructure and Communities, announced the appointment of Macky Tall as Chair of the Board of Directors for the Canada Infrastructure Bank (CIB) for a four-year term at the end of March. 

That appointment has Michael Sabia written all over it as Macky was his right-hand man at CDPQ running Infrastructure and Liquid Markets.

Are you following me so far? Things are moving at light speed in Ottawa (well, by Ottawa standards) and key people are being named in key positions and nothing is by accident, this has been in the cards for some time now.

Our country has a lot of serious issues, the biggest one is a slowing economy.

Tim Kiladze of the Globe and Mail just reported that home prices are falling, and Canada is losing its secret weapon for stoking GDP growth.

The late econometrician Ed Leamer wrote a great paper on how "Housing is the Business Cycle" and if it's one thing policymakers in Ottawa need to pay attention to, it's the housing market. 

Unfortunately, that's the least of our problems, we have a structural productivity problem that has gotten a lot worse over the past decade, directly impacting our standard of living.

We have to deal with President Trump's tariffs and diversify our economy to become less reliant on our southern neighbour.

We need to address critical infrastructure needs and that's where Sabia, Blanchard, Hodgson will all play a critical role, working their contacts at the Maple Eight and beyond to get things going, selling major stakes in key infrastructure projects and cutting regulations to spur new ones.

"Yes but Leo, this is Ottawa, this isn't CDPQ where Michael Sabia was able to hire bright talent and pay top dollar to get things going. The bureaucrats in Ottawa are notorious for pushing paper around," a friend of mine notes.

He's right but Michael knows the terrain better than anyone, he knows the bureaucratic beast in Ottawa, if it's someone who can get things done, it's him.

My former boss now Canadian senator Clément Gignac called me earlier to discuss the US foreign tax bill sending jitters across Wall Street.

Clément thinks it's wonderful news that Marc-André Blanchard and Michael Sabia are helping Prime Minister Carney and I agree.

There's a lot of work ahead for this government and I know these are very experienced and intelligent people that can make things happen on many fronts.

Once again, I would urge would urge Marc-André Blanchard and Michael Sabia to read former PSP CEO Neil Cunningham's insights on what to do with the $9 billion Public Service Pension Plan (read the comment here). 

I would even recruit Neil to help them with their ambitious agenda, he's another very experienced smart person that can help them on critical policies.

Alright, let me wrap it up there and wish Marc-André Blanchard and Michael Sabia all the best as they assume these critical roles. They're both starting work on July 7th and have a lot to tackle.

Below, CTV News reports Prime Minister Mark Carney is tapping Michael Sabia, a veteran of the public and private sector, to head up the Privy Council Office in Ottawa.

Also, on June 4, 2025, at the 2025 Energy NL Conference, Michael Sabia, President & CEO of Hydro-Québec, and Jennifer Williams, President & CEO of NL Hydro, sat down for an insightful fireside chat about their negotiations on the newer, fairer Churchill Falls Memorandum of Understanding (MOU). 

Sabia's understanding of the grid and energy needs will also help Carney advance his goals in the energy transition. 

Update: Michael Sabia had a lot to say on the US hitting pause on its climate ambitions:

Canada should seize the global clean energy opportunity as the U.S. slows its climate ambitions, Hydro-Québec CEO Michael Sabia says, calling the American retreat a “hallelujah” moment for Canadian leadership.

    “If they pause, we go forward,” Sabia said yesterday at The Globe‘s Intersect/25 conference in Toronto. “That’s our moment – and it needs to be seized now.”

Crown-owned utilities such as Hydro-Québec are uniquely positioned to ramp up investment while private markets remain cautious, said Sabia, who also served as CEO of the Caisse de dépôt et placement du Québec for more than a decade.

 The utility is aiming to boost its capital spending from $8-billion to $12-billion this year to accelerate grid expansion and electrification, he said.

Global investment in renewables is hitting record highs, with projected energy spending of US$2.2-trillion in 2025 – double the amount forecast for fossil fuels, Sabia said. Despite political headwinds and inflationary pressures in the U.S. and Europe, the “underlying signal” from global boardrooms is that capital is flowing into clean power.

Sabia also called for smarter risk-sharing between governments and their financing agencies, such as the Canada Infrastructure Bank, to unlock large-scale infrastructure investment. Long-term capital won’t fund early-stage, high-risk projects, he said, unless governments step in with “bridge capital” to shoulder the initial uncertainty.

 Pushing traditional infrastructure investors to take on startup risk doesn’t work, he said. “It’s like asking a hockey player to go play in the NFL.”

Sabia’s call to accelerate investment is being echoed across the provinces and corporate Canada after Prime Minister Mark Carney unveiled plans to implement a streamlined approval process for major nation-building projects such as trade corridors, energy projects and mines.

The CEO drew applause when he ended a comment about ramping up investment with a rallying cry: “Both for the economy now and for our future: Charge ahead. Go forward.”

Sounds like Michael Sabia is ready to kick Ottawa's ass. Let's hope he succeeds.

Mars W. Mosqueda Jr. of Deal Street Asia reports Canada's BCI acquires minority stake in KKR-backed Pinnacle Towers: 

British Columbia Investment Management Corporation (BCI), one of the largest institutional investors in Canada, has agreed to acquire a minority stake in Pinnacle Towers, a major independent telecom tower operator in the Philippines.

Pinnacle Towers, established in 2020 to address the increasing demand for telecommunications infrastructure in the Philippines, is backed by global private equity firm KKR.

The PE major, which made its investment in Pinnacle Towers from its Asia Infrastructure Funds I and II, will retain its majority shareholding in Pinnacle Towers following the transaction. Financial details of the deal, which is expected to close by Q3 2025, were not disclosed.

The deal marks BCI’s latest foray into Asia-Pacific infrastructure and supports its strategy of investing in high-growth emerging markets alongside institutional partners, per the announcement.

Lincoln Webb, executive vice president and global head, Infrastructure & Renewable Resources, at BCI, said the investment aligns with the company’s emerging markets strategy of backing high-quality infrastructure assets alongside its institutional partners.

“The Philippines represents a compelling market for long-term capital, especially in essential digital infrastructure services,” Webb added.

BCI Infrastructure & Renewable Resources has a global portfolio with nine active investments in the Asia-Pacific region, including Rakuten Mobile (a leading communications tower company in Japan), Altius (a communications tower company in India), and Cube Highways (the largest toll road operator in India).

Pinnacle Towers has developed a portfolio of around 7,000 towers across the Philippines, combining build-to-suit projects, sale-and-leaseback agreements, and tower management services for leading mobile network operators.

The transaction comes about six months after KKR initiated a private placement for Pinnacle Towers to raise between $300 million and $400 million, according to a MergerMarket report.

The report further said that the deal involves a partial sell-down by KKR, combined with a new equity injection, and that the deal size will depend on the stake offered.

KKR first acquired a stake in Pinnacle Towers in November 2020 for an undisclosed amount. It made the investment through its infrastructure fund.

In 2022, KKR acquired 3,529 telecom towers from Globe Telecom, one of the major telco companies in the Philippines, through Pinnacle’s subsidiary Frontier Tower.

It also announced a deal in March 2023 that would see PLDT, another telco company, selling 1,000 telecommunications towers for more than $200 million.

The PE major then invested an additional $400 million in Pinnacle Towers to further develop and acquire telecom towers in the country. 

The Asset also reports BCI takes stake in KKR’s Philippine telecom platform:

The British Columbia Investment Management Corporation ( BCI ) has acquired a minority stake in Pinnacle Towers, a Philippines-based digital infrastructure platform, marking a significant strategic move into Southeast Asia’s fast-evolving telecoms sector.

The deal, executed with global investment firm KKR, positions BCI alongside KKR, which retains its majority stake.

Pinnacle Towers, founded in 2020, has grown to become the largest independent tower operator in the Philippines, with approximately 7,000 towers. The platform specializes in build-to-suit and sale-and-leaseback models, vital strategies for telecom operators looking to scale connectivity efficiently in a high-growth mobile market.

“BCI’s investment is a strong endorsement of our mission,” says Patrick Tangney, Pinnacle Towers’ chairman and CEO. “With BCI and KKR as strategic partners, we are well-positioned to continue driving greater digital connectivity in the Philippines and across the region.”

With this move, BCI adds to its growing Asia-Pacific portfolio, which includes stakes in Japan’s Rakuten Mobile and India’s Altius and Cube Highways.

“The Philippines represents a compelling market for long-term capital,” adds Lincoln Webb, BCI’s executive vice-president. “We’re backing digital infrastructure with strong fundamentals, strong management and strategic relevance to national development.”

KKR, which invested in Pinnacle through its Asia Infrastructure Funds I and II, highlights the platform’s evolution through organic growth and strategic bolt-ons. 

Yesterday, BCI issued a press release stating it invested in KKR's tower platform, Pinnacle Towers: 

SINGAPORE & VICTORIA, Canada – June 9, 2025 – KKR, a leading global investment firm, British Columbia Investment Management Corporation (“BCI”), and Pinnacle Towers, an Asia-based digital infrastructure platform with a focus on the Philippines, today announced the signing of definitive agreements under which BCI will acquire a minority stake in Pinnacle Towers from KKR, which will remain the majority shareholder.

Pinnacle Towers was established in 2020 to serve the rapidly increasing demand for connectivity and quality telecommunications infrastructure in the Philippines. Led by a highly experienced management team, the platform specializes in executing on Build-to-Suit (“BTS”) telecommunications tower projects, optimizing the use and management of Sale-and-Leaseback (“SLB”) assets with leading mobile network operators, and providing ancillary management services to industry players. In the span of five years, Pinnacle Towers has scaled to become the largest independent tower company in the Philippines with around 7,000 towers.1

Lincoln Webb, Executive Vice President & Global Head, Infrastructure & Renewable Resources, BCI, said, “We are excited to work closely with KKR and Pinnacle’s management team to support the growth of the business. The Philippines represents a compelling market for long-term capital, especially in essential digital infrastructure services. This investment aligns with our emerging markets strategy of backing high-quality infrastructure assets alongside strong institutional partners. We look forward to supporting Pinnacle Towers as it continues to enhance digital connectivity and drive meaningful impact across the Philippines.”

Projesh Banerjea, Managing Director, Infrastructure, KKR, said, “We are very proud of the success that we have achieved with Pinnacle Towers to serve the Philippines’ connectivity needs. Since our initial investment, we have collaborated closely with Pinnacle Towers’ outstanding management team to deepen the platform’s capabilities and scale its presence organically and through bolt-on acquisitions. We are delighted to welcome BCI, who share our long-term vision and commitment to developing critical digital infrastructure, as strategic partners and look forward to building on Pinnacle Towers’ strong growth momentum.”

Patrick Tangney, Chairman and CEO of Pinnacle Towers, said, “Over the last five years, with the support of KKR, Pinnacle Towers has grown to become the leading independent tower company in the Philippines. BCI’s investment marks an important milestone in our journey and is a strong endorsement of our mission. With BCI and KKR as strategic partners, we are well-positioned to continue driving greater digital connectivity in the Philippines and across the region.”

BCI Infrastructure & Renewable Resources has a global portfolio with nine active investments in the Asia-Pacific region, including Rakuten Mobile (a leading communications tower company in Japan), Altius (a leading communications tower company in India), and Cube Highways (the largest toll road operator in India). The program continues to expand its presence in the region with the addition of this minority stake acquisition in Pinnacle Towers.

KKR made its investment in Pinnacle Towers from its Asia Infrastructure Funds I and II. KKR first established its global infrastructure team and strategy in 2008 and has since been one of the most active infrastructure investors around the world. KKR’s Asia Pacific infrastructure platform was established in 2019 and has since organically grown to approximately US$13 billion in assets under management.

The transaction is expected to be completed by Q3 2025, subject to customary regulatory approvals.

1Including sites contracted to build or acquire

BCI is taking a minority stake in Pinnacle Towers, the largest independent tower operator in the Philippines with approximately 7,000 towers across the country, combining build-to-suit projects, sale-and-leaseback agreements, and tower management services for leading mobile network operators.

Established in 2020, KKR has made a series of investments including strategic acquisitions to grow Pinnacle Towers quickly and is now selling a minority stake to BCI which has experience investing in tower operators.

I think it's worth noting this passage from the press release:

KKR made its investment in Pinnacle Towers from its Asia Infrastructure Funds I and II. KKR first established its global infrastructure team and strategy in 2008 and has since been one of the most active infrastructure investors around the world. KKR’s Asia Pacific infrastructure platform was established in 2019 and has since organically grown to approximately US$13 billion in assets under management.

Incredible how fast KKR scaled up its Asia Pacific infrastructure platform.

It was a little over a year ago that KKR announced it closed a US$6.4 billion Asia Pacific Infrastructure Investors II Fund:

• Fund is largest pan-regional infrastructure fund to have been raised for Asia Pacific
• More than half of the Fund already invested or committed across ~10 investments

HONG KONG–(BUSINESS WIRE)– KKR, a leading global investment firm, today announced the final close of KKR Asia Pacific Infrastructure Investors II SCSp (the “Fund”), a US$6.4 billion fund focused on infrastructure-related investments across Asia Pacific.

At close, the Fund is the largest pan-regional infrastructure fund to have been raised for Asia Pacific. This closely follows KKR’s inaugural Asia Pacific-dedicated infrastructure fund, KKR Asia Pacific Infrastructure Investors SCSp, which closed at US$3.9 billion in 2021 as the largest Asia-dedicated pan-regional fund at the time. Since the Fund’s launch, KKR has already invested or committed more than half of its capital across approximately 10 investments. KKR’s Asia Pacific infrastructure platform has organically grown to approximately US$13 billion in assets under management since its inception in 2019.

“Infrastructure is a key pillar of KKR’s global and regional strategy. We are proud to have built and scaled a market-leading platform in Asia Pacific in a short span of time, and are grateful for the continued support by our investors as we close our milestone second pan-regional fund,” said David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure at KKR. “The success of the fundraise is a testament to the confidence that global investors have in our ability to deliver strong risk-adjusted returns and differentiated value-add through our established multi-asset platform, local presence in key markets, and strong ability to collaborate across multiple strategies and the region. Their commitment underscores our shared conviction that Asia Pacific’s infrastructure sector holds tremendous potential over the long term.”

KKR’s infrastructure investment approach brings together a disciplined selection process with distinctive investment sourcing and structuring capabilities executed by a dedicated investment team based in markets across Asia Pacific. In line with this approach, the Fund will focus on critical infrastructure with low volatility and strong downside protection where KKR believes it can add value and achieve attractive risk-adjusted returns by leveraging its global network of industry experts, its highly experienced team in Asia Pacific, and long track record of operational value creation. The Fund has a broad investment mandate across various sectors, including renewables, power and utilities, water and wastewater, digital infrastructure, and transportation, among others.

Hardik Shah, a Partner on KKR’s Infrastructure team based in Mumbai, said, “As Asia accounts for more than 60% of global growth, driven by rising domestic consumption and productivity, rapid urbanization, and an enormous emerging middle class, the need for new infrastructure and sustainable energy sources will continue to accelerate. We believe this backdrop presents a significant opportunity for value-added private infrastructure investors, and we welcome the chance to invest behind the development and success of critical infrastructure across Asia Pacific.”

Keith Kim, a Partner on KKR’s infrastructure team based in Seoul, said, “Our ability to create investment opportunities and successfully fundraise in a challenging macro environment reflects the strength of our localized teams who have a deep understanding of the markets and business landscapes where we invest, as well as KKR's global expertise and capabilities. We are pleased to significantly deepen our commitment to Asia’s infrastructure sector through the Fund.”

The Fund received strong backing from a diverse group of new and existing prominent global investors across the world, including public and corporate pensions, sovereign wealth funds, insurance companies, endowment funds, and asset managers.

Brandon Donnenfeld, a Managing Director in KKR Global Client Solutions added, “KKR has built a differentiated infrastructure investing approach that combines our decades-long experience of being a value-add investor, having localized teams, and maintaining a focus on downside protection. We are honored to have the continued support from our investors and look to continue delivering strong performance for them.”

KKR first established its global infrastructure team and strategy in 2008 and has since been one of the most active infrastructure investors around the world. Today, the Firm manages approximately US$56 billion in assets under management across more than 80 infrastructure investments, and has a team of more than 90 dedicated infrastructure investment professionals globally.

Debevoise & Plimpton LLP represented KKR as primary fund counsel for this fundraise.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

Recall, back in January, that KKR and PSP acquired AEP's transmission stake for $2.8 billion in a 50-50 partnership (see my comment here).

This deal with BCI just shows how invaluable a strategic partner like KKR is especially in a region like Asia Pacific.

Basically, the landscape is changing fast in infrastructure, more big funds have entered the space over the last five years after the pandemic changed the world and Canada's Maple Eight have changed their approach from direct investors where they control a majority stake to taking a minority stake or entering a 50-50 partnership with the KKRs, Blackstones, Brookfields of this world.

Now, getting back to the deal above, why own towers in the Philippines?  

A lot of reasons, if you've been following the tariff discussions down south, you've probably noticed the country is a major manufacturing hub for large American companies like Nike.

It's growing fast, a growing middle class, urbanization and other trends are all leading to more demand for connectivity and digital infrastructure.

Also worth noting Filipinos use the internet to keep in touch with their relatives abroad. 90% of overseas Filipino workers (OFWs) belong to social media networking sites.  

So, owning towers in the Philippines is definitely a smart long-term move which is why KKR is there. 

And it's not just KKR that has taken notice but it is the largest player there:

Common towers or cell sites that allow co-sharing arrangements between separate telecommunications services is currently being rolled out across the Philippines. The policy for common towers is meant to encourage a rise in investment activities and broad market-led development on the part of ICT providers.

Presently, there are over 20 tower companies with licenses to operate but only six of these companies as having the capabilities, wherewithal, and customer support to secure meaningful build-to-suit (BTS) commitments from mobile network operators for new sites.

• Pinnacle Towers (KKR)
• MIDC - PhilTower (Stonepeak, Macquarie Capital and MIESCOR)
• edotco Group (Axiata)
• EdgePoint Infrastructure (DigitalBridge)
• Unity (Aboitiz Group)
• LBS Digital Infrastructure 

In the press release, Lincoln Webb, Executive Vice President & Global Head, Infrastructure & Renewable Resources, BCI, said:

 “We are excited to work closely with KKR and Pinnacle’s management team to support the growth of the business. The Philippines represents a compelling market for long-term capital, especially in essential digital infrastructure services. This investment aligns with our emerging markets strategy of backing high-quality infrastructure assets alongside strong institutional partners. We look forward to supporting Pinnacle Towers as it continues to enhance digital connectivity and drive meaningful impact across the Philippines.”

With this move, BCI adds to its growing Asia-Pacific portfolio, which includes stakes in Japan’s Rakuten Mobile and India’s Altius and Cube Highways.

Alright, let me wrap it up by noting BCI and Macquarie Asset Management completed the acquisition of Renewi, a leading waste-to-product company. You can read details of that deal here.

Below, Managing Asia's Christine Tan speaks with Sabin Aboitiz, President & CEO of the Aboitiz Group, as he leads one of the Philippines' oldest conglomerates through an ambitious transformation. Tracing its roots to the abaca fiber trade in the 1800s, the Aboitiz Group now spans energy, banking, food, and real estate—and is setting its sights on becoming the country's first "techglomerate."

Also, Carl Raymond Cruz, the new CEO at Globe Telecom, discusses his targets and business outlook for the Philippine telecommunications company. He also shares his expected timetable for the potential listing of fintech unit GCash with David Ingles and Avril Hong on "Bloomberg: The China Show" (April 2025).

Lastly, In this "Independent Thinkers on Digital" episode, Colin Christie discusses the Philippines' success with #SMS and social media, the #5G development driven by social media demand, and the government's role in telecom. He also explores #AI's impact on healthcare administration. For more insights and discussions on digital innovation in the Philippines, tune into this episode of Independent Thinkers on Digital (January 2024).

John Plender of the Financial Times reports on the high risk adventure playground that awaits pension investors:

Politicians on both sides of the Atlantic are hell-bent on steering more pension money into private markets. The Trump administration is considering an order that would open up American employees access to private markets through their 401k pension plans. This would give Main Street an entrée into a high risk adventure playground that has hitherto been the preserve of Wall Street and big professional investors.

Continental European regulators have been relaxing liquidity rules and price caps in defined contribution pension schemes. And in the UK, chancellor Rachel Reeves has corralled asset owners and managers overseeing around 90 per cent of active savers’ defined contribution (DC) pensions to invest 10 per cent of their portfolios in infrastructure, property and private equity. Half the money will be ringfenced for the UK. If the signatories fail to meet their voluntary targets ministers may make the policy mandatory.

Let us pause, though, to raise a quizzical eyebrow around the current private market hype. In the US the potential popularisation of private markets looks suspiciously like a friendly Trumpian gesture to Wall Street friends. In fairness to the Europeans, though, their thrust — using private markets to boost economic growth and enhance retirement incomes — is well intentioned.

Public markets have been shrinking while private equity and credit have ballooned. Companies stay private for longer than ever before. With easy access to private capital, many see no need to go public.

DC scheme members have close to 40 pre-retirement years in which liquidity, the ability to buy and sell easily, is an unnecessary luxury. Yet the default options that most adopt invest mainly in quoted assets, thereby throwing away the opportunity to reap an illiquidity premium in private investments.

Private credit has also grown spectacularly. Advocates trumpet its all-weather attributes: regular cash flow, solid collateral, first lien status that gives priority as a creditor. Much of the growth reflects the regulatory constraints holding back banks since the financial crisis of 2007-09. This encourages regulatory arbitrage, with banks providing the majority of non-banks’ funding needs. Private credit in turn finances burgeoning buyouts.

The icing on the case for investors is that private markets offer diversification which reduces portfolio risk. Yet there are snags. Allison Herren Lee, a former commissioner at the SEC, has pointed out that “going dark” by investing in private markets entails being starved of information. These markets are dogged by opacity and their limited liquidity is capricious.

Costs in private markets are higher, as are risks. Historically these penumbral reaches of the capital market are where big accidents happen, especially in venture capital where the corporate death rate is high and there is a considerable dispersion of returns. That means that pension funds have to be skilled at choosing good managers. Whether many of those funds have such skills is moot. Conventional wisdom has it that in this Darwinian free-for-all big investors prevail. But not necessarily. Look at the University Superannuation Scheme’s painful experience with Thames Water.

Crucial for investors in making a sea change in asset allocation, is timing. This is tricky because the performance numbers in private equity that have mesmerised investors are dangerously misleading. They have long been flattered by ultra-low interest rates stemming from the financial crisis. According to McKinsey research, roughly two-thirds of the total return for buyout deals that were entered into in 2010 or before can be attributed simply to market multiple expansion and leverage.

With rising interest rates that windfall is gone, private equity distributions of cash to investors have dwindled, managers struggle to sell assets bought at boom time prices and are opting to hold assets longer to avoid crystallising losses. One way they do this is having their private credit arms lend to already highly borrowed portfolio companies and then extracting dividends to make distributions and pay themselves fees.

In a world of Trumpian economic uncertainty, such sleight of hand, soaring leverage and self-dealing points to rising defaults and potential systemic trouble. And with retail investors being lured in, they could end up taking professionals off the zombie company hook or, in the vernacular, being stuffed. And the continuing flow into private markets risks diluting returns.

In his Treatise on Money John Maynard Keynes wrote: “If Enterprise is afoot Wealth accumulates whatever may be happening to Thrift; and if enterprise is asleep, Wealth decays, whatever Thrift may be doing.” Maybe politicians would do better to focus on fostering enterprise than tinkering with pension funds’ asset allocation.

Great article by John Plender, he writes extremely well and raises all the critical points here.

Two points worth reiterating:

•  According to McKinsey research, roughly two-thirds of the total return for buyout deals that were entered into in 2010 or before can be attributed simply to market multiple expansion and leverage. 
• With rising interest rates that windfall is gone, private equity distributions of cash to investors have dwindled, managers struggle to sell assets bought at boom time prices and are opting to hold assets longer to avoid crystallising losses. One way they do this is having their private credit arms lend to already highly borrowed portfolio companies and then extracting dividends to make distributions and pay themselves fees. 

The first point shouldn't surprise anyone, historically low rates allowed for multiple expansion and greater use of leverage to boost private equity values. Those boom years are over.

The second point is more concerning, as distributions slow to a crawl, PE firms are using their private credit arm to lend to already highly borrowed portfolio companies and then they extract dividends to make distributions and pay themselves fees.

This is what KKR's Pete Stavros called the creative wizardry of his industry and it could pose systemic risk.

Lastly, John Plender notes the continuing flow into private markets risks diluting returns. 

No doubt, but it's worth noting that sophisticated LPs are more discerning than ever in the funds they invest in and really examining the co-investments they're offered.

As far as the political thrust to nudge pension funds to invest more in private markets in the UK, I covered it here and don't think it's a bad idea, especially as it pertains to investing in infrastructure.

Plender notes Thames Water was a painful disaster. So what? There are plenty of other success stories including UK airports which Canada's Maple Eight own big stakes in.

There's a reason why CDPQ plans to invest more than £8bn in the UK over the next five years, there are great opportunities there, especially in infrastructure.

Alright, let me end it there, have a headache all day and junior wants his milk to go to bed (kept mommy and daddy up last night and we are hoping tonight isn't a repeat, sigh!).

Below, Brookfield Asset Management President Connor Teskey spoke with Dani Burger from Bloomberg TV at SuperReturn 2025. He discussed how large-scale carveouts and partnerships are driving activity across our business, from private equity to AI infrastructure.

Also, the largest opportunity emerging in private credit is investing in investment grade assets, according to Jim Zelter, president of Apollo Global Management. Speaking to Bloomberg’s Kriti Gupta at SuperReturn International, a private capital conference in Berlin, Zelter said that about three-quarters of Apollo’s assets are placed in the investment-grade market.

Lastly, Goldman Sachs is seeing valuations coming down as private markets ender a slower era. Michael Bruun, Goldman Sachs Asset Management Global Co-Head of Private Equity, spoke to Bloomberg's Kriti Gupta from the sidelines at the SuperReturn International conference in Berlin.

Amalya Dubrovsky , Karen Friar and Ines Ferré of Yahoo Finance report the S&P 500 hits 6,000 as Tesla rebounds amid Trump-Musk feud cooldown:

US stocks rallied on Friday, with the S&P 500 (^GSPC) breaching the 6,000 level following a moderate beat on the monthly jobs report and rising investor hopes of a cooldown in the acrimonious feud between President Trump and Elon Musk.

The S&P 500 added about 1.0% to close at the 6,000 mark, its highest level since February. The Dow Jones Industrial Average rose over 400 points, or 1.1%, while the tech-heavy Nasdaq Composite gained 1.2%.

Tesla (TSLA) shares rebounded as CEO Musk and Trump moved to cool tensions. Musk backed off his threat to decommission the Dragon spacecraft used by NASA after Trump threatened his government contracts. However, the White House tamped down reports of a potential "peace call" between the two.

Tesla shares partially recovered from a 14% wipeout in a broader stock slide on Thursday as mounting differences between the two powerful men erupted into the open. Musk called for the president's impeachment, while Trump threatened the contracts and breaks critical to Musk's business empire.

The feud injected more unpredictability into an already uncertain market, just as weary investors had become cautiously optimistic that Trump tariffs could be reined in and the US economy might prove resilient.

On Friday President Trump said high level trade talks with China would take place in London this upcoming Monday.

Meanwhile on Friday morning, the labor market showed more signs of resilience as Trump's tariffs continued to seep in to the economy. The US added 139,000 jobs in May, more than the 126,000 expected by economists as the hiring rate slowed and unemployment held flat at 4.2%.

Following the May jobs beat, President Trump again criticized the Federal Reserve for being "too late" with its monetary policy. Trump urged the central bank to ease borrowing costs by reducing rates, writing in a social media post: "Go for a full point, Rocket Fuel!" 

Sean Conlon and Jesse Pound of CNBC aslo report Dow rises more than 400 points on solid jobs report, S&P 500 touches 6,000: 

Stocks jumped Friday after the latest nonfarm payrolls data came in better than expected, easing concern the economy faces an imminent slowdown.

The Dow Jones Industrial Average popped 443.13 points, or 1.05%, to close at 42,762.87. The blue-chip index was up more than 600 points at its highs of the session. The S&P 500 also gained 1.03% — surpassing the 6,000 level for the first time since late February — and settling at 6,000.36. The Nasdaq Composite rallied 1.20%, ending at 19,529.95.

The market’s move higher was supported by a more than 3% gain in Tesla. Shares of the electric vehicle maker weighed on the market Thursday, tumbling 14%, as CEO Elon Musk sparred with President Donald Trump on social media. Other major tech-related names such as Nvidia, Meta Platforms and Apple also ended the session higher.

U.S. payrolls climbed 139,000 in May, the Bureau of Labor Statistics reported Friday, above the Dow Jones forecast of 125,000 for the month but less than the downwardly revised 147,000 in April. The unemployment rate was unchanged at 4.2%.

“The nonfarm payrolls report came in better than expected,” Anthony Saglimbene, chief market strategist at Ameriprise, said in an interview with CNBC. “It’s showing that the labor market is holding up very well in spite of kind of some slowing growth trends.”

A series of data released earlier this week signaled a possible economic slowdown, raising questions about the impact of the multi-front tariff negotiations and the next steps for the Federal Reserve, which next meets to set interest rate policy on June 17-18.

On Thursday, unemployment claims for last week’s period came in higher than expected. That came a day after ADP reported that private sector payrolls saw a gain of just 37,000 in May, which substantially missed the Dow Jones estimate for 110,000. Activity in the U.S. services sector also weakened unexpectedly last month.

“There’s still some uncertainty about what the inflation impacts are going to be from the tariffs,” Saglimbene continued, adding that he expects tariff impacts to start showing up more in the economic data during the summer. “Markets are kind of holding judgment about what all this means for growth and profitability over the next couple quarters, so we’re kind of back to where we were in February.”

Trump has since offered some hope on trade, announcing later Friday that talks between the U.S. and China will take place next week in London.

The S&P 500 ended the session more than 2% below its February high. The broad market index, along with the other two major benchmarks, also posted notable gains for the week. The S&P 500 was up 1.5% on the week, and the Dow posted a 1.2% advance. The Nasdaq jumped 2.2% over the period.

What a bizarre week culminating with the Thursday feud between President Trump and Elon Musk.

It was vicious, it was awkward but today both men decided to cool it.

One thing is for sure, this market couldn't care less if the bromance is breaking up or cooling down, stocks are ripping higher.

I was just looking at the list of stocks making a new 52-week high today and among the many, you'll find Microsoft, Ebay, Mastercard, GE Aerospace, Jabil Circuit, Kratos Defense, Paychex, Sunlife Financial, Toronto Dominion Bank, Visa, Zscaler and many more. 

Moreover, shares of big data analytics software provider Palantir Technologies (PLTR) popped 6.5% higher, securing the top daily performance in the S&P 500. Positivity around its expanding government business helped lift Palantir to an all-time high on Tuesday, but before Friday's gains, the stock had been pulling back for a couple of sessions. Palantir and other artificial intelligence companies benefited from upbeat sentiment after earnings results from chipmaker Broadcom (AVGO) revealed strong AI demand. 

And not that we need more evidence that animal spirits are alive on Wall Street, Circle's stock (CRCL) soared again on Friday after it exploded higher in its first day of trading, rising as much as 200% in Thursday's session after the stablecoin issuer's long-anticipated public market debut. 

More evidence of animal spirits? Sure, here you go. Two months after CoreWeave’s IPO fizzled, the AI company has surged 250% and left doubters baffled. 

Blame CTAs, blame elite hedge funds, blame retail, blame FOMO, blame whoever you want, this market doesn't want to stop forging ahead and the Trump tariff tantrum is long, long gone.

If this nonsense continues, 2025 might end up even better than 2023 and 2024 for the S&P 500.

What's that? It can't continue higher? Inflation is coming back, recession lies ahead?

Maybe but with the Atlanta Fed tracker posting a 3.8% annualized growth rate, the US economy remains extremely strong and recession sure doesn't seem like it's around the corner (even if it's half that, no recession ahead unless something blows up in financial markets). 

All this to say, the debt problems are real but the market doesn't seem to care until something breaks.

And once again this year, the pain trade remains a melt-up, not a meltdown.

Alright, let me wrap it up with this week's best performing and worst performing US large cap stocks:

 

And if your really want to see animal spirits in action, check out top performing stocks across all US exchanges this week:

Below, Douglas Holtz-Eakin, American Action Forum president and former CBO director, Kitty Richards, Groundwork Collaborative senior fellow and former Treasury Department official in the Biden administration, Saira Malik, Nuveen CIO and head of equities and fixed income, and CNBC's Rick Santelli, Steve Liesman and Mike Santoli join 'Squawk Box' to break down the May jobs report.

Next, David Kelly, JPMorgan Asset Management chief global strategist, joins 'Squawk on the Street' to discuss the latest employment data, if the Federal Reserve should cut rates and much more.

Third, Jan Hatzius, Goldman Sachs chief economist, joins 'Squawk on the Street' to discuss the economist's thoughts on the latest jobs report, the Federal Reserve and more.

Fourth, Jeremy Siegel, Wharton professor emeritus and WisdomTree chief economist, joins 'Closing Bell' to discuss the latest jobs report, the budget bill and trade deal with China.

Fifth, Peter Boockvar, Bleakley Financial Group chief investment officer, joins 'Fast Money' to explain why he is skeptical of this market bounce.

Sixth, Ray Dalio says an understanding of what he calls "the big debt cycle" is critical in order for policymakers, investors and the general public to realize where we are, and where we are headed, with debt. In his new book Dalio provides solutions and details how America might avoid a fiscal crisis.

Seventh, Citadel Founder and CEO Ken Griffin speaks on stage at the 2025 Forbes Iconoclast Summit to discuss the effects of President Donald Trump's tariffs on the economy, the risk of US debt in triggering an economy slowdown, and Trump's 'Big Beautiful Bill'.

Lastly, Bill Ackman, the founder of Pershing Square Capital Management, talks on stage at the 2025 Forbes Iconoclast Summit to delves into his career, investment strategies, and recent activism.

James Bradshaw of the Globe and Mail reports AIMCo adds former CIO to board of directors:

Alberta Investment Management Corp. has added former chief investment officer Sandra Lau to its board of directors, as the government-owned pension fund manager rebuilds its leadership team after a mass purge late last year.

Ms. Lau was AIMCo’s CIO for less than a year, starting in 2022. She retired in 2023 after 24 years at the Crown corporation, including a stint leading AIMCo’s fixed-income investments.

She was succeeded by Marlene Puffer, who left the institution last September. AIMCo has been without a full-time CIO since then.

Ms. Lau is the sixth member of a revamped AIMCo board led by chair Stephen Harper, the former prime minister.

“Sandra Lau brings both exceptional skills and a unique perspective, and I am pleased to welcome her back to AIMCo as a member of the board,” Mr. Harper said in a statement announcing her appointment.

In November, the Alberta government abruptly dismissed AIMCo’s entire board of directors, its chief executive officer and three other senior executives after a clash over how the $180-billion fund manager should be run. Finance Minister Nate Horner said the government felt AIMCo needed “a major reset,” including a sharper focus on controlling costs.

When Mr. Harper was chosen as board chair, three of the directors who had been dismissed were reappointed: former private-equity executive Jason Montemurro, real estate investor Bob Dhillon and former Healthcare of Ontario Pension Plan CEO Jim Keohane.

The province also gave the deputy minister of finance – currently Katherine White – a permanent seat on AIMCo’s board.

On Wednesday, the government published a mandate letter that Mr. Horner sent to Mr. Harper, dated Jan. 22.

The letter outlines the pillars of a “renewed mandate” for AIMCo, largely affirming core aspects of the legislation that governs the pension fund manager and emphasizing that it should be “a cost-efficient provider of investment management services.”

The government’s heavy-handed intervention last fall, when it installed senior civil servants as the interim CEO and board members, raised questions about the pension fund’s purported arm’s-length status.

“AIMCo will operate independently and at arm’s length from the Government of Alberta,” the mandate letter says. “Investment decisions will be made without any government influence, strictly adhering to AIMCo’s legal obligation to act in the best interest of its clients.”

The letter also says that “while AIMCo is accountable to the Government as its sole shareholder, its primary accountability is to its clients.”

Mr. Harper said in an e-mailed statement that the letter “clearly outlines that AIMCo’s mandate will remain intact.”

“AIMCo will continue to operate independently from government and remain focused on acting in the best interest of clients in providing investment management services,” he said. “Our priority is, and always will be, to uphold the highest standards of governance.” 

Yesterday, AIMCo issued a press release stating Sandra Lau has been appointed to its board of directors: 

Edmonton – Alberta Investment Management Corporation (AIMCo) is pleased to announce the appointment of Ms. Sandra Lau to the Board effective June 2025 for a three-year term.

“Sandra Lau brings both exceptional skills and a unique perspective, and I am pleased to welcome her back to AIMCo as a member of the Board,” said The Right Honourable Stephen Harper, Chair, AIMCo Board of Directors. “The Board is certain AIMCo and its clients will benefit from her extensive knowledge of the organization, her proven investment and risk management acumen, and her boardroom experience.”

Sandra Lau brings more than 25 years of proven expertise in investment and risk management, the majority of which she spent in progressively senior roles at AIMCo. Since joining the organization in 1999, she advanced to Executive Vice President, Fixed Income, and later served as Chief Investment Officer from 2022 until her retirement in mid-2023. Her leadership was instrumental in shaping AIMCo’s corporate and long-term investment strategies. Ms. Lau holds a Master’s degree in Economics and Finance and a Bachelor of Commerce with a major in Finance, both from the University of Alberta. She is also a CFA Charterholder and is based in Edmonton, Alberta.

“I have been deeply invested in AIMCo’s success for more than 25 years,” said Ms. Lau. “It is an honour to rejoin the organization in this capacity and contribute to supporting the organization as it executes its mandate of delivering strong, risk-adjusted investment returns.”

This announcement follows the signing of the Order in Council, O.C. 175/2025 by the Lieutenant Governor of Alberta earlier today. In accordance with the Alberta Investment Management Corporation Act, the Board of Directors is responsible for overseeing the management of the business and affairs of AIMCo. Guided by this mandate, the Board sets the strategic direction of the Corporation and oversees the development and implementation of policies and procedures that govern the day-to-day conduct of AIMCo’s business. All directors are appointed to the Board by the Lieutenant Governor in Council and are fully independent of management.

About Alberta Investment Management Corporation (AIMCo)

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than C$179.6 billion of assets under management as at December 31, 2024. AIMCo invests globally on behalf of pension, endowment, insurance, and government funds in the Province of Alberta. With offices in Edmonton, Calgary, Toronto, London, and Luxembourg, our more than 200 investment professionals bring deep expertise in a range of sectors, geographies, and industries.

Today, AIMCo issued another press release stating a letter has been delivered to the organization's Board Chair from Alberta's Minister of Finance:

The Government of Alberta has published a letter from Nate Horner, President of Treasury Board and Minister of Finance, to The Right Honourable Stephen Harper, AIMCo's Board Chair.

The letter, dated January 22, 2025, has been made available on the Open Government web page, which is designed to improve government transparency, and ensure better collaboration between government and citizens.

"This letter clearly outlines that AIMCo’s mandate will remain intact. It also reaffirms AIMCo's commitment to operational independence and accountability to our clients, ensuring that our investment decisions are guided by sound financial principles and long-term objectives," said Mr. Harper.

"AIMCo will continue to operate independently from government and remain focused on acting in the best interest of clients in providing investment management services. Our priority is, and always will be, to uphold the highest standards of governance." 

I'm going to keep this comment short and sweet tonight.

I learned Sandra Lau was joining AIMCo's board of directors earlier today on LinkedIn and just blurted out the first thing that came to mind: "POW! Fantastic choice, Sandra Lau will make a great addition to AIMCo's board. Wonderful news, I'm very happy for her!".

I've spoken to Sandra in the past and I really like her a lot: she's very astute, experienced, and a genuinely nice and authentic person.

She worked many years as the head of Fixed Income, was named co-CIO and unfortunately that didn't work out.

The biggest mistake ever was that she left AIMCo to begin with and I'll leave it at that because I know a lot more.

Anyway, she's will add depth to that Board and along with Jim Keohane, you have two all-star investment professionals right there.

As far as the letter Alberta's Minister of Finance Nate Horner sent to former Chair Stephen Harper, I think it was done for two reasons, and again these are my opinions:

• First and foremost to assure AIMCo's clients that the governance will remain independent and focused on their best interests.
• Second, to attract a top CEO to the organization who will not be worried about government interference

Admittedly, that second reason is pure conjecture on my part but after what happened to former CEO Evan Siddall and other senior managers, well, let's just say it spooked any potential top candidate from taking that position.

We shall see where AIMCo is headed in the coming years but the latest announcements are positive, extremely positive. 

I know for a fact AIMCo's clients and employees are happy Sandra is back with the organization (they love her too). 

Below, John Mowrey, NFJ Investment Group CIO and senior portfolio manager, joins 'Squawk Box' to discuss the latest market trends, state of the economy, impact of tariff uncertainty, the national debt, and more.

Also, Brian Jacobsen, Annex Wealth Management, joins 'Power Lunch' to discuss if markets are okay with the latest bill to make its way through Congress, what the bond market's message is and much more.

Lastly, Marko Kolanovic, fmr. JPMorgan chief market strategist, joins'Fast Money' to talk why he thinks a correction is on the way.

Mary McDougall of the Financial Times reports private equity portfolios underperform at big Canadian investors:

Disappointing returns from private equity investments meant Canada’s big pension funds underperformed last year, as a downturn in the buyout sector weighed on some of the world’s largest investors in private assets.

Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan and Caisse de dépôt et placement du Québec have all lagged their benchmarks over the past year, according to their latest reports.

A rise in global borrowing costs in 2022 and 2023 ushered a more difficult period for private equity, with fundraising and exits sluggish, while public equity markets benefited from a long bull market that lifted many pension funds’ benchmarks.

Despite a rocky period for private equity, the managers of the pension funds say their portfolios have performed as expected on a long-term view and are designed to rise less than wider stock markets in years of high growth while benefiting from limited losses in more difficult periods.

CPPIB, which manages C$714bn ($516bn) pension assets for 22mn Canadians, reported this week that its allocation to private equity — which makes up 23 per cent of the core portfolio — had been the biggest relative drag on its performance over the past five years.

Canada’s state pension fund manager said it was “not immune to short-term market shifts” and that on a 10-year basis it had performed as designed, with private equity delivering more than its reference measure. The total performance of the fund was also ahead of its benchmark over the past decade, CPPIB said.

Other Canadian Pension funds have also faced a period of weaker private equity returns relative to benchmarks and previous years.

The private equity portfolio of Ontario Teachers’ Pension Plan, which has C$266bn of assets, delivered about half that of its benchmark portfolio of largely listed equities — dominated by big US tech stocks which soared last year. The previous year, the gap between the fund’s private equity returns and the benchmark was even larger.

However on a five-year view, OTPP’s private equity returns have been in line with its benchmark portfolio at 12.4 per cent.

OTPP said private equity had been “a highly profitable asset class for Ontario Teachers’ and remains an area of focus for the plan”.

Charles Emond, chief executive of the C$473bn (£253bn) Caisse de dépôt et placement du Québec, said that across five years the fund’s private equity portfolio had outperformed.

“2022 and 2023 was a bit of a pause in valuation, deal flow and money not coming back at the same pace as usual which led to some caution before being able to redeploy in the asset class,” Emond said.

“It’s been volatile a little bit but it’s still a very successful asset class for us and we want to keep deploying into it,” he added.

Before I delve into this, go back to read a few comments:

• A Conversation With OTPP's CEO Jo Taylor on Their 2024 Results
• A Discussion With CDPQ's Head of Liquid Markets on Their 2024 Results
•  A Conversation With CPP Investments' CEO on Their Fiscal Year 2025 Results

Private equity is an important asset class for all of Canada's large pension funds, even more so for CPP Investments, one of the largest, if not the largest institutional investor in private equity.

But there's no denying that private equity is facing some serious headwinds: higher rates, higher costs, higher wages, historically low distributions,  stretched valuations, etc.

Back in April, I discussed why Canadian pension funds like OMERS and Teachers were cutting back on pioneering private equity investments to focus more on co-investments with top strategic partners (basically the CPP Investments approach).

Adding to the challenges in private equity is public market indexes which many use to measure mid market buyouts are dominated by the Mag-7 stocks and other growth stocks which have taken off in the last couple of years. 

Faced with low distributions, Canada's large pension funds have been selling private equity fund stakes in the secondaries market to generate liquidity and diversify vintage year risk.

For example, in April, CPP Investments sold a portfolio of 25 private equity fund interests in North American and European buyout funds for $1.2 billion in net proceeds (read my comment here). 

And Canada's pension funds aren't the only institutional investors selling private equity stakes.

Today, Reuters reported that Yale is nearing a deal to sell $2.5 billion of private equity stakes, according to Bloomberg News reports: 

Yale University is finalizing the sale of up to $2.5 billion of its private equity and venture capital assets, Bloomberg News reported on Wednesday. The Ivy League school's endowment is in advanced talks on the portfolio sale, code-named "Project Gatsby," with an overall discount expected to be less than 10%, Bloomberg News reported citing people familiar with the matter. In April, Reuters reported that Yale was exploring a sale of private equity fund interests and was being advised by investment banking firm Evercore.  The sale discussions includes a so-called mosaic deal that allows buyers to cherry-pick specific investment funds they would like to acquire, and multiple buyers, including Lexington Partners and HarbourVest Partners, have assessed the portfolio, Bloomberg said. Yale University and Lexington did not immediately respond to a request for comment. HarbourVest declined to comment. 

When the mighty Yale endowment is selling $2.5 billion in PE stakes in the secondaries market, you know things are tough (read the full Bloomberg article here to gain more insights).

With private equity facing stiff headwinds, segments of real estate still reeling from the pandemic shock, and the S&P 500 humming along after the Trump tariff tantrum, led by the Mag-7 and other AI related stocks, it gave more firepower to Andrew Coyne to criticize CPP Investments' active management, but they addressed his critique head on. 

Still, there is an uneasiness as many fear the good years are over in private equity, there's too much money that invested in the asset class over the last ten years and going forward, returns will be more muted as rates stay persistently higher for longer.

Moreover, the rate environment favours private credit over private equity and more liquid alternatives (ie. hedge funds).

Is there something structural going on in private equity? Maybe but I've seen these periods of slowdown before and when everyone thinks it's dead, it comes roaring back.

There are other concerns. Today I read that  Apollo warned Australian regulator against taking 'broad brush' approach to private markets rules.

Add regulatory scrutiny to the list of challenges the industry is facing. 

Having said all this, the most important thing to remember in private equity is it's a long-term asset class, you really need to measure success over a 5 or even 10-year period. 

Lastly, coming back to the FT article above, Alex Beath left his comment on the FT:

I think there is an error in the article in that CPP as far as I can tell does not publish a one-year benchmark return for anything other than total fund return. I think the 2024 fiscal year return of 9.6% appearing alongside the 2025 fiscal year return of 8.7% was used in error. Otherwise, I can't make heads or tails of it. Can the writer / editor comment as to where the one-year CPP PE benchmark comes from?

He also posted this on LinkedIn:

I’m working on something substantial on the performance of the private equity portfolios of Canadian Maple 8 institutional investors,. which I’ll release soon on alexbeath.com, but this story linked below from Mary McDougall of the FT came to me first. “Private equity portfolios underperform at big Canadian Investors” sort of tells itself – three of the four CDPQ, CPP Investments, OMERS, and Ontario Teachers’ Pension Plan is said to have underperformed their benchmark in 2024 with only OMERS outperforming but with the lowest return and benchmark which fits with the title in a way (if we look at the annual report 9.5% return vs. 8.7% benchmark). At an extreme, Ontario Teachers underperformed by 12 percent! (11.7% return vs. 23.7% benchmark return.)

I mention this as I work on my own research because the numbers don't match mine in at least one respect. CPP, as far as I know, didn’t underperform in 2024 as reported. In fact, CPP doesn’t publish a one-year benchmark return at the asset class level at all. It appears that whoever gathered the data for FT made a simple error, and mistook the 2023 one-year private equity return for the 2024 one-year benchmark – the returns, 8.7% in 2024 and 9.6% in 2023 are published side by side on page 60 of CPPs 2025 annual report and so it’s the kind of mistake you could make if you’ve been looking at lots of these things, which after a while start to look the same. I spoke to several people at CPP who agreed with me that the data was wrong. (However, if I had to guess, the CPP private equity performance was in fact even worse, but again, more to say on that soon.)

Another fact is that many big pension funds are getting absolutely raked in the media for recent underperformance. Stories making mistakes don’t help. Indeed, many friends of mine not working in the industry have been happily sending me links to stories like this one from our national newspaper the Globe and Mail published this weekend, “Overstaffed, overpaid and underperforming, the CPP investment fund is in need of a sharp course correction”. With a title like that, I don't feel the need to read it. I'd wager there isn't much proof of "overstaffed", "overpaid", or even "underperforming".

The problem with all of this is that the nuance in the performance data is completely lost on journalists. Maple 8 funds are huge private market investors, and if the benchmarks aren’t perfect, short-term value added is just noise. One way around this is to wait out the storm and only publish a five- or ten-year performance number, like what CPP does at the asset class level. But they have to publish a one-year total fund performance number anyway, and that’s dominated by the exact data they didn’t really trust in the first place. The answer is of course better benchmarks, but how do you do that?

Great insights there and he's right, CPP Investments only publishes its relative performance in PE over a 5 and 10-year period (see link to my interview with CEO above):

Over the past five years, PE delivered a net return of 14.7%, an increase from the prior five-year period. The increase was driven by positive net returns in fiscal 2025 and the rolling off of fiscal 2020 between the comparative periods. PE’s externally managed fund investments, and direct assets in the information technology, financials and consumer discretionary sectors contributed to its absolute results over the five-year period. Over the same period, PE generated a net value added of negative 5.5% against its benchmark, excluding the impact of foreign currency, which was lower than the previous five-year period. This was primarily due to the rolling off of fiscal 2020, where PE delivered double-digit positive net value-add above its public market index benchmark during the COVID-19 pandemic market downturn. Over the past 10 years, PE delivered a net return of 13.5%, with a net value added of 2.6% above its benchmark, excluding the impact of foreign currency. The department’s access to the full value chain in private equity globally, scale to compete at the larger end of the direct market, well-developed relationships with general partners, and investment selection positively contributed to its results over the 10-year period.  

And CEO John Graham shared this with me:

I think what's important over the last five years is the portfolio underperformed the benchmark portfolio because of decision we made. The biggest source of underperformance is because the Private Equity portfolio is largely a mid cap portfolio and it's US centric too, and it's benchmarked against a levered  public equity large cap index.  So it's benchmarked against a levered S&P 500 and you're not going to be invested in mid caps and beat a levered S&P 500 especially with what has happened with the Mag-7. 

But when I look at the performance, that was a deliberate decision. We don't think we should have that level of concentration in a handful of companies and for a pension plan, who we are and what our identity is -- we are not a wealth maximizing vehicle -- we are a pension plan that is there to make sure every week or month or biweekly when money is taken off a Canadians' cheques, in return they get a promise that when they retire they have a benefit that they earned every dollar of for the rest of their life and protect it against inflation. And our job is to build a portfolio and make sure that promise is kept. 

What is critically important to understand is the approach CPP Investments and others use in private equity -- funds investments and co-investments -- works and generates added value over a longer period.

Private equity isn't going away, there are plenty of good private companies out there to invest in.

And large pension funds are looking to build a resilient and highly diversified portfolio so they will continue to invest in this asset class despite the headwinds it currently faces.

Alright, let me wrap it up there.

Private Equity investors and GPs are all meeting in Berlin for the SuperReturn International conference.

Below, Mark Jenkins, head of global credit at Carlyle (formerly worked at CPP Investments) joins CNBC from the sidelines of the SuperReturn conference to discuss the firm's expansion into Europe and how Trump's tariffs are impacting the private.

Also, Blair Jacobson, co-president of Ares Management, joins from SuperReturn to discuss what he is seeing at the conference, the future of Private Equity, and whether the industry has seen its peak already.

Third, James Reynolds, global co-head of private credit at Goldman Sachs Asset Management discusses the state of private credit and what he expects from European markets.

Lastly, Fabio Osta, head of the alternatives specialists team in EMEA Wealth at BlackRock joins from the sidelines of the SuperReturn conference to discuss the 50/30/20 portfolio, and why private markets are an essential parts of their clients' investment strategy.

Andrew Coyne wrote another highly critical article on CPP Investments claiming that 'overstaffed, overpaid and underperforming', the Fund is in need of a sharp course correction: 

This time they waited until page 41 to admit it.

As with most things at the Canada Pension Plan Investment Board, its annual reports have become increasingly bloated over the years. Once, the organization responsible for investing Canadians’ public pension savings reported on its activities each year in a relatively straightforward fashion. The typical CPPIB annual report in those days was a relatively restrained 15,000 to 20,000 words.

That was before 2006, when the CPP’s surplus funds were still invested passively, that is in a way designed to track the broad market indexes. In that year, the fund switched to active management: picking individual stocks, bonds and other assets in an attempt to beat the market. Since then the fund’s annual reports have become, essentially, extended advertisements for active management.

They now run to more than 80,000 words: page after page of dense, jargon-filled and numbingly repetitive prose on the many arcane strategies and reams of research the fund has deployed in the quest to “add value” – to earn a higher return, that is, than it would have had it just stuck to investing in the indexes.

To be sure, the fund’s managers will concede, this approach is more costly – much more costly. Where 20 years ago the CPPIB had just 150 employees and total costs of $118-million, it now has more than 2,100 employees and total expenses (not including taxes or financing costs) in excess of $6-billion.

And yet, for all its eagerness to explain how it invests your money – the process – the fund is rather less keen to go into the results. This year’s report is no exception. To be sure, there, in large type, is the headline figure: a rate of return of 9.3 per cent in the fiscal year ending March 31.

As in previous years, the fund’s managers are quick to congratulate themselves on this achievement. “This year, we delivered solid returns for the Fund,” writes the fund’s president, John Graham, crediting “the disciplined execution of a forward-thinking strategy, by a high-performing team.”

Now, 9.3 per cent certainly sounds impressive, unless you recall that equity markets generally were up wildly last year. The U.S. market returned more than 30 per cent in calendar 2024; Canada’s, more than 20 per cent; other developed countries, an average of 12 per cent. Bonds earned much less, of course, but with any reasonable mix of stocks and bonds it would have been like falling off a log to earn 9.3 per cent.

In fact, the CPP’s traditional benchmark portfolio, a mix of 85 per cent stocks and 15 per cent bonds, earned 13.4 per cent last year – half again as much as the fund’s team of disciplined, forward-thinking high-performers were able to generate. That’s what you’d get just by buying the averages, or – what is the same thing – if you’d just picked stocks at random.

That, however, is not the point. Any one year you could put down to bad luck. But the CPP fund didn’t just underperform the indexes last year. It has done so, on average, ever since it switched to active management. That’s the admission you find buried on page 41 (it was on page 39 last year): since fiscal 2007, “the Fund generated an annualized value added of negative 0.2 per cent.”

Compound that 0.2 per cent annual shortfall over 19 years, and it adds up to more than $70-billion in forgone income, on assets that now total $714-billion. The fund’s managers have spent nearly two decades and a total of $53-billion trying to beat the market, only to produce a fund that is nearly 10-per-cent smaller than it would be had they just heaved darts at the listings.

That’s not a comment on the skills of its employees. It’s a comment on the strategy. The best managers in the world regularly underperform the market, especially after costs are taken into account – two thirds in any given year, nearly all of them over longer time frames. It’s one of the most well-studied phenomena in the literature. Which is why many large pension funds have given up trying, switching from active to passive management.

Still, if the fund’s managers can’t be blamed for this performance, neither should they be rewarded for it. Which is the other scandal here: notwithstanding the fund’s indifferent returns, everyone there is making out like bandits – not just in the executive suite, whose five highest-paid inhabitants earned nearly $5-million apiece on average in salaries and benefits last year, but across the organization, whose 2,100-plus employees were compensated to the tune of more than $500,000 on average.

CPP Investments is an organization that is literally out of control. It is long past time it was reined in and given new directions. 

Stop the presses, if Andrew Coyne says that CPP Investments is out of control and needs to be reined in, then Canadians should be highly concerned.

After all, he's a well respected columnist for the Globe and Mail, a graduate of the University of Toronto and London School of Economics, he is regularly seen on CBC dispensing his political punditry so surely he's an expert on our national pension fund and how it manages money.

No doubt, he's a smart chap, I enjoy his political comments but he clearly has a beef with CPP Investments and its active management strategy and I don't think he's right on this topic.

It was literally a year ago when I went over why he's dead wrong on CPP Investments' active management.  

Like clockwork, every year after the Fund posts its fiscal year return and releases its annual report, Coyne will come out to publish a critical comment on why its active management strategy doesn't work and compensation has run amok there.

Interestingly, he only targets CPP Investments but his criticism can easily target all of Canada's Maple Eight funds and other smaller well-known pension investment managers I cover on this blog.

Basically, if the guys and gals at these large sophisticated pension funds can't beat their benchmark over a year, three years or five years, why are we paying them big bucks?

And since nobody can beat the S&P 500 over a long period, even more of a reason to dismantle all our large pension funds and just index their assets to 70% equities/ 30% bonds and be done with all this silly active management which enriches private equity funds, hedge funds and senior managers at these organizations.

With me so far? Makes a lot of sense, right? Coyne surely read Burton Malkiel's A Random Walk Down Wall Street and for him it's as clear as night and day, get rid of all these costly investment managers who work at our large pension funds as well as their external investment partners and replace them with low-cost indexing strategies.

Simple as 1-2-3. 

Millennial Moron made the same points when he went over the problem with CPP Investments albeit he did his homework and actually delved deeply into the the annual report to raise important points.

Well, yesterday Michel Leduc, Global Head of Public Affairs and Communications at CPP Investments sent me a short 5-page document titled "Everyone is entitled to their own opinion, but not to their own facts" addressing Coyne's criticism.

I thank Michel for sending me this document. 

I embedded it below, it was shared with many stakeholders, not just me, and I will then go over some critical parts:

 

 Alright, now let me get to the important points I note this from page 1:

CPP Investments is the investment engine behind that strength. Since we began investing, nearly 70% or $492.1 billion of the CPP Fund’s current value has come from net investment income.

In terms of sheer financial performance, over the past 10 years, which is widely considered the most relevant time frame for pension performance, the CPP Fund has outperformed its deliberately demanding benchmark. It is not by accident that the investment manager with the highest yardstick also consistently delivers top total fund returns.

In addition, as illustrated here, Global SWF ranks CPP Investments second among the world’s 25 largest public pension funds based on 10-year returns. 

Go read my recent conversation with CEO John Graham going over fiscal 2025 results. 

The press release states: 

The Fund returned a 10-year annualized net return of 8.3%. Since CPP Investments first started investing the Fund in 1999, it has contributed $492.1 billion in cumulative net income, which is approximately 70% of its value today, with the balance attributed to net contributions. 

On a relative basis, the Fund’s 10-year return outperformed the aggregated benchmark portfolios, generating 1.4% in value added. This amounts to billions of dollars that are attributable to active management (after costs). The benchmark portfolios’ fiscal 2025 return of 10.9% exceeded the Fund’s net return of 9.3% by 1.6%. 

So yes, over a longer period, CPP investments has outperformed the aggregate benchmark portfolios but in the last couple of years, headwinds in private equity and Mag-7 concentration risk meant they underperformed their benchmark last two fiscal years.

And who knows, it might happen again this year as mega cap tech stocks roared back after Trump's tariff tantrum sent them reeling. 

Does this mean the Fund's active strategy isn't working or they should chuck it for a cheaper indexing strategy? Of course not, it just means the Fund will not outperform its benchmark during a roaring bull market characterized by high concentration risk.

In terms of costs, I note this from page 2 of the document:

Comparing today’s CPP Investments to its early-2000s structure is like comparing a global enterprise to an emerging start-up. Our cost structure reflects the scale and complexity required to deliver consistent, long-term value. We have been open and transparent: building a global multi-strategy investment platform is not low cost. Even so, we maintain strict discipline in managing our costs. Take our operating expenses, which include costs associated with running the organization. These expenses are within our direct control as we strive to deliver value. Our operating expenses have consistently decreased, reaching a five-year low of 26.1 basis points in fiscal year 2025. We continue to focus on increasing efficiency; we currently manage approximately $140 billion more than we did just two years ago with roughly the same number of employees.

Shining a light on our costs is legitimate and, indeed, costs have not been static by any
means. Still, some perspective is needed. In 1999, Ottawa transferred $12 million dollars to
CPP Investments. At that time, the CPP Fund was projected to reach $500 billion dollars by 2028. Reaching that trajectory required resources, which we employed, and did so prudently. Last year we earned $60 billion dollars after all costs reaching more than $700 billion. Context is critical.

When it comes to national pension plans, Canada punches well above its weight. The CPP Fund is leading globally by outperforming peers, delivering consistent value after costs, and helping to secure Canadians’ retirement futures. The facts tell a much different story than what has been implied. CPP Investments has delivered tens of billions of added financial heft available to the CPP after all costs. 

In terms of managing risks, I note this from pages 2,3 and 4 of the document:

An important part of how CPP Investments contributes to the long-term sustainability of the CPP Fund is to strike an appropriate balance between delivering a maximum rate of return on the one hand and being prudent about risk on the other. Each extreme is reckless. The solution is diversification, which requires professional capabilities and capacity, and which no simple public equity index can provide.

If the only role of CPP Investments were to chase the highest possible return, without considering risks  or the need to pay pensions decades into the future, then it would be easy to see why one might be drawn to mimicking short-term equity market surges. But that would be reckless.

The CPP Fund is not a speculative portfolio—it is a $714.4 billion pension fund designed to be resilient through multiple market cycles. 

As the investment manager tasked with ensuring the sustainability of the CPP Fund, CPP Investments’ mandate is not to maximize returns at any cost, but to consider risks and the best interests of contributors and beneficiaries such that the CPP will be able to meet its financial obligations at any given point—as required under Section 5 of the CPPIB Act.

Diversification is core to this. Indexing alone may look good in bull markets but would leave the CPP Fund dangerously exposed in downturns. 

The reality is that we will see periodic plunges, which have happened at least five times over the last century. This is relevant for any investor, but particularly so for a long-term investor responsible for considering actuarial factors for the next 75 years and beyond. The average drop of those downturns is nearly 50%, as illustrated. The only way out of severe concentration risk offered up by a low-cost index is to prudently invest in capabilities to diversify away from undue risk of loss in accordance with section 5 of our enabling legislation. We also won’t ignore political risk of holding less than 3% of our portfolio in Canada, even if it aligns with the country’s weight in the context of global markets. Strength at home is vital to any successful global powerhouse, which is why 12% of the CPP Fund is invested here.

It’s also important to challenge the claim that “no one beats the market.” While it’s true that most investors who try to time the market or make concentrated bets tend to underperform, this  generalization doesn’t hold for institutional investors with distinct advantages. Scale, asset certainty, and long investment horizons enable strategies that can deliver sustained value beyond standard indices—aligned with our mandate to maximize long-term returns. When compounded, those additional  returns create meaningful buffers against future volatility. Just as crucial is the fact that managing a pension fund differs fundamentally from individual wealth maximization. Resilience isn’t optional—it  requires prudent diversification that only active management can achieve in the best interests of current and future beneficiaries.

The Fund is on track to reach $1 trillion by 2030—well ahead of schedule. It has grown in 25 of the past 26 years. Even during the COVID crash, we delivered positive net income. That’s resilience—and that’s what Canadians deserve. 

In my opinion, the essence of the CPP Fund and its active management is clearly explained above right there.

Not only would indexing expose the Fund to serious downside risk, it would violate the mandate of the Fund where they have to consider risks and the best interests of contributors and beneficiaries such that the CPP will be able to meet its financial obligations at any given point.

Sure, they can easily index 70% of the assets into global equities and put 30% in global fixed income but that exposes the Fund to serious downside risk which if it occurs, it could take years to recover.

And the Fund already takes on a lot of Equity risk (both public and private) because base CPP where most assets reside is a partially funded plan so they were able to take on more risk than their peers (enhanced CPP is more in line with a fully funded plan, much more diversified, less risk, an asset mix more in line with larger peers). 

From that vantage point, the outperformance of the Fund relative to global peers can largely be explained by its asset mix tilted to equities but active management also added meaningful returns over a longer period. 

Moreover, not to get too technical, but if you believe in Ken Rogoff's thesis that a major inflationary wave is coming, both stocks and bonds will be challenged as will some private assets like private equity, so you'd better have a diversified portfolio if you're a large pension fund.

What gets me is people like Andrew Coyne aren't stupid, far from it, if you sit them down and rationally discuss this with him or even Millennial Moron who I consider a lot more financially astute, they will concede all these points.

The document ends by stating:

Some lines of critique simply do not withstand scrutiny. For example, citing the length of our annual report as a measure of institutional failure does not make sense. Consider other large financial institutions, such as banks and insurers, who produce robust financial reporting. Our annual report similarly reflects the information desired and required by different stakeholder groups and international financial reporting standards. Indeed, linking an organization’s performance to the length of its annual report is puzzling.

Our transparency is widely recognized. Over the past three years, we have either ranked first or second globally for pension fund transparency, according to the Global Pension Transparency Benchmark.

What’s more, our connection with Canadians goes well beyond the annual report. We hold public meetings, report to Parliament, publish regular updates on our website, disclose new investments and maintain year-round engagement through investor relations, roadshows, and digital reporting. Transparency is not an afterthought—it is embedded in our governance and operations.

Substance over soundbites

At a time when many pension systems globally are under strain, Canadians deserve to take pride in their national fund. And so they should: the CPP Fund has grown steadily, achieves world- leading risk-adjusted returns after all costs and remains on track to serve beneficiaries well into the future. This success is underpinned by CPP Investments’ clear mandate, strong governance, rigorous transparency and a portfolio built for resilience. Opinions are welcome—but facts must ground the debate. And the facts are clear: CPP Investments continues to deliver for Canadians, today and into the future. 

Here I will admit that CPP Investments' annual report is inordinately long, complex and even experts can get confused at times but it is the largest, most important pension fund in the country and they definitely are transparent and cover a lot in that report.

Is it a quick read? Hell no! Can they probably edit it down and make it more reader friendly? Probably and that requires an effort from their Communications team in charge of putting it all together and they'd need to work with all the individual groups from Finance to Investments to Risk to make it more readable so the average Canadian without a PhD in Finance can understand it.

Having said all this, I do agree that Coyne's innuendos are silly, they're not trying to obfuscate or hide things intentionally, quite the opposite, they set the bar for transparency and no other Canadian or international fund comes close, except for Norway's mammoth sovereign wealth fund, the global leader in transparency.

How do I know all this? In 2007, I wrote a governance report for Treasury Board Secretariat of Canada on the governance of the Public Service Pension Plan and looked at best governance standards all over the world.

In my humble opinion, Norway is way ahead of everyone when it comes to transparency, even Canada, but the CPP Fund is definitely right up there.

Can we improve transparency? You bet, if it were up to me, the total compensation of every employee working at CPP Investments and all the Maple Eight would be published, clearly explained and this way we can know who is contributing and why they're being compensated big bucks.

It's not enough to publish the top five executives' compensation, I'd go into a lot more detail because I want to know how many senior directors or managing directors are pulling in more than a million dollars a year and why.

That's me, I believe governance is always a work in progress and transparency can always be improved.

Why am I bringing this up? I read this Reddit thread where Millennial Moron and others posted their thoughts and someone called Got-Engineers posted this:

Thanks for replying with all this information! My own personal adult (typo) is that people in the Canadian pension industry are overpaid, especially at the poor performing funds. They have to attract talent or people to work there, but do they have any experience? I worked in the Canadian pension industry for over eight years and I swear the amount of time you saw someone that got hired that had no actual experience, but turned out they had a connection to someone that worked there, it was very prevalent. The people that work in tech consulting. It’s a huge drift and it’s a very selfish industry to work. Most people are looking out for themselves and their own care interests. Peter principal very prevalent! and don’t ask about severance compensation! The actual numbers of severance compensation at some of the poor performing pension funds in Canada would be alarming to the public if they found out how much money their pension fund is paying people to not work for them.

I have no clue who this is, they can learn to write better, but there have definitely been a few suspect hires at all of Canada's large pension funds over the years at all levels and sometimes you scratch your head trying to figure out how they got in the door.

And yes, sometimes the Peter principle applies, people rise to their level of incompetence but this is far rarer nowadays for a lot of reasons, first and foremost, you can't hide your incompetence for long.

But I do believe in meritocracy and hiring and promoting the best people no matter their age, gender, skin colour, religion, disability, sexual orientation, etc.

Real meritocracy requires radical transparency, to borrow a term from Bridgewater.

Lastly, it is important to note that CPP Investments and all of Canada's large pension funds do index their US equity exposure, they've all read A Random Walk Down Wall Street.

Except they try to add add alpha over that beta through internal absolute return strategies and by investing with the top hedge funds all over the and the last couple of years, that has helped them add significant alpha.

Take it from me, I used to invest in top hedge funds, when rates are ultra low, most underperform even on a risk-adjusted basis, but when rates rise back to historic norms, they deliver meaningful alpha.

As far a private equity, no doubt there are serious headwinds there but the approach CPP Investments and other large Canadian pension funds have adopted is a winning strategy over the long term.

This is why while no fund can beat the S&P 500 every year (not even elite hedge funds can do that), over the long term, a well diversified portfolio across public and private markets using the right approach can add significant value added.

And while everyone knows Warren Buffett's track record over the long run, trouncing the S&P 500, fewer people know Brookfield's long term track record which is even better than Buffett's since inception of that fund.

Canada's Maple Eight basically follow Brookfield's approach in long-term investing.

Alright, let me end it there, if I need to edit or add anything, let me know and please remember to read my recent conversation with CPP Investments' CEO John Graham as he delves into all these topics and more.  

As far as Andrew Coyne, I will continue listening to him on television and reading his political commentaries, on CPP Investments' active management strategy, I think he's beating a dead horse. 

Below, Andrew Coyne joins Steve Paikin on The Agenda to discuss his new book, "The Crisis of Canadian Democracy." This is a great discussion and I'll buy Coyne's book to read it this summer.

Also, Rudyard Griffiths welcomes back Globe and Mail columnist Andrew Coyne to talk about Mark Carney's early economic plan for Canada. Coyne suggests that the PM's vision is a mixture of centre right and centre left politics and mimics the language of Stephen Harper.

Griffiths and Coyne then try to break down the reasons for Canada's stagnant growth and agree that we need more labour, more investment, and more innovation driven by competition. Talk then turns to this week's meeting between Canada's premiers which will focus on interprovincial trade: how might national unity suffer if trade barriers are dismantled? And why is the Prime Minister dragging his feet on this obvious made-in-Canada solution to Trump's tariff threat?

Third, Harvard economist Ken Rogoff joins Charlie Rose to discuss his new book, Our Dollar, Your Problem, where he goes over his thoughts on debt, inflation and the dollar. Great discussion, take the time to watch this. 

Lastly, Brookfield CEO Bruce Flatt sat down with CNBC Squawk Box Asia to discuss their business growth, the impact of tariffs and inflation, and the opportunities they continue to see in digitalization and AI infrastructure.

If you want to understand why the Maple Eight try to emulate Brookfield, listen to Bruce Flatt.