Matthew Sellers of Mergers and Acquisitions reports Quebec's pension giant exits USI as Aon strikes US$17 billion deal:

Aon has agreed to buy USI Insurance Services from KKR and other shareholders for US$17.0 billion (C$23.6 billion), pushing the broking and consulting giant deeper into the US middle-market territory it first staked out with its purchase of NFP two years ago.

USI has no meaningful Canadian footprint. Aon does: it has operated here since acquiring Toronto brokerage Reed Stenhouse in 1997, and today runs Aon Reed Stenhouse Inc. out of Toronto, with roughly 1,600 staff across offices in eight provinces and a retirement practice advising on more than C$77bn in Canadian plan assets. USI's business will sit almost entirely outside that structure once the deal closes, since it's a purely American operation.

The more direct Canadian connection is on the seller's side. In March 2017, Caisse de dépôt et placement du Québec - the Quebec pension fund known as CDPQ, or La Caisse - teamed up with KKR to buy USI from Onex Corporation for US$4.3bn (C$6.0bn), each taking an equal stake in the Valhalla, New York-based brokerage.

CDPQ helped fund USI's acquisitions and technology spending as the firm roughly doubled in size over the following six years. In 2023, KKR bought back more than half of CDPQ's position for over US$1bn (C$1.4bn) to become USI's largest shareholder; CDPQ's Martin Longchamps described KKR at the time as "a tremendous strategic partner in this investment journey." Monday's announcement names KKR and unspecified "other shareholders" as sellers without mentioning CDPQ directly, so it isn't clear what stake, if any, the fund still held going into this deal.

Either way, the transaction marks the end of an ownership chapter that started with one of Canada's largest institutional investors.

The numbers

KKR has said the sale delivers roughly six times its return on the 2017 investment and 3.4 times its return on capital across the full life of the position. On a net basis, after accounting for roughly US$278m (C$386m) in tax attributes, Aon's purchase price works out to US$16.7bn (C$23.2bn) - about 14.5 times USI's synergised trailing-12-month adjusted EBITDA.

USI is the tenth-largest insurance broker in the US, generating around US$3bn (C$4.2bn) in annual revenue through more than 10,500 employees across nearly 200 US offices. It sells property and casualty coverage, employee benefits, personal risk products and retirement plan advice, largely to businesses too small for the largest brokers but too complex for a local agency.

Under the deal, USI chairman and chief executive Mike Sicard will become president of Aon plc and global chief executive of its middle-market business, reporting directly to Aon chief executive Greg Case and taking a seat on the firm's executive committee. Case said the deal would make Aon "the premier US middle-market platform," and pointed to what he calls the firm's data and analytics edge over rivals. He was more direct in an interview with the Wall Street Journal: "We see this having a financial impact almost immediately."

Aon expects the combination to generate about US$395m (C$549m) a year in run-rate synergies once fully integrated, and expects it to add to adjusted earnings per share from 2028. The firm plans to fund the entire purchase with new debt and says it intends to hold its current credit ratings - Baa2 at Moody's, A- at S&P - by pausing share buybacks while that debt gets paid down. BofA Securities and Citi advised Aon; KKR worked with Goldman Sachs, Insurance Advisory Partners and Morgan Stanley. The deal is expected to close in the fourth quarter of 2026, subject to regulatory approval.

A second middle-market deal in two years

The move follows the same script as Aon's purchase of NFP, the middle-market broker it bought from Madison Dearborn Partners and HPS Investment Partners for a deal valued at roughly US$13.4bn (C$18.6bn) when it was announced in December 2023. That deal changed Aon's position among the world's largest brokers, and Aon has kept adjusting the pieces since, including selling most of NFP's wealth management arm back to Madison Dearborn last year for roughly US$2.7bn (C$3.8bn).

What Aon kept from NFP says something about what it wants from USI too: the corporate risk, employee benefits and institutional retirement business that sits at the centre of a middle-market client's balance sheet, rather than managing individual investors' wealth. Once the USI deal closes, Sicard will be responsible for combining its operations with NFP and Aon's existing middle-market unit.

What this means for competing brokers

The deal reshuffles a hierarchy that hasn't moved much at the top in years. Aon currently ranks second among US brokers with US$16.99bn (C$23.6bn) in 2025 brokerage revenue, behind Marsh McLennan's US$26.66bn (C$37.1bn), according to brokerage rankings; USI, at US$2.89bn (C$4.0bn) in 2025 revenue and nearly 11,000 staff, ranked tenth. Adding USI's revenue to Aon's puts more distance between it and Arthur J. Gallagher in third - a broker that has been closing ground of its own, having completed its US$13.45bn (C$18.7bn) purchase of AssuredPartners in August 2025.

Public brokers using their stock to buy scale, rather than growing it themselves, has been the story of the US sector for two years: Marsh McLennan bought McGriff Insurance Services, Brown & Brown paid US$9.83bn (C$13.7bn) for Accession Risk Management, and now Aon and Gallagher have each done a second mega-deal.

Canada's brokerage market has been consolidating too, though along different lines. Navacord and Acera Insurance completed a merger in February, creating the country's largest privately held brokerage with roughly C$7.2bn in combined insurance and employee-benefits premium. The mechanics are different - no public buyer, no stock currency, just two employee-owned firms deciding to merge - but the underlying pressure to get bigger looks familiar.

Aon reported adjusted second-quarter earnings of US$3.81 (C$5.30) per share on July 29, ahead of analyst estimates, and its stock had a market value of roughly US$75bn (C$104.3bn) as of the Friday before the deal was announced. The announcement also comes weeks after Aon's chief financial officer, Edmund Reese, stepped down; the company said he'll serve as a senior adviser to Case through August 2027. 

Before I give you my thoughts, let's go back to 2017 when Financier Worldwide reported that KKR and CDPQ bought USI Insurance Services for US$4.3billion:

Private equity (PE) firm KKR and Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) have announced their intention to jointly acquire USI Insurance Services (USI) from Onex Corporation and its affiliates in a transaction which values the insurance brokerage at $4.3bn.

As partners with equal ownership, KKR and CDPQ – both of which have a strong track record in the financial services and insurance-related sectors and have been longstanding partners in multiple investments over the years – are looking to pursue attractive investment opportunities in high quality businesses with a longer duration and a lower risk profile in order to support strong management teams and facilitate long-term strategic business building.

With more than 4400 professionals operating out of 140 local offices throughout the US, USI delivers property and casualty, employee benefits, personal risk and retirement solutions. USI has become an industry leader by attracting best-in-class industry talent with a long history of deep and continuing investment in local communities.

The investment to acquire USI, which has over $1bn in revenues and operates out of 140 local offices serving every state, will primarily be made through KKR and CDPQ’s core private equity partnership, which includes funds from KKR’s balance sheet and from CDPQ’s pool of capital.

“USI is a fantastic company and is uniquely positioned to help address the risk management, insurance and employee benefits-related needs of small and medium-sized business owners,” said Tagar Olson, head of KKR’s financial services investing practice. “We look forward to working with CDPQ in helping management achieve its long-term vision to grow the business through accelerated investments in USI’s people, technology and solutions.”

A leading global investment firm that manages investments across multiple asset classes including PE, energy, infrastructure, real estate, credit and hedge funds, KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. Moreover, KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business.

Mr Olson continued: “Our successful experience in the insurance and benefits brokerage industry, coupled with the impressive track record of the USI management team, give us confidence in our ability to generate compelling returns while growing the business over the long-term.”

KKR’s co-investor, CDPQ, is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As one of Canada’s leading institutional fund managers (with over $30bn of assets under management), CDPQ invests globally in major financial markets, PE, infrastructure and real estate. Additionally, CDPQ’s private equity team has significant expertise both as a direct investor in companies and as a partner in investment funds.

“CDPQ and KKR are co-leading this investment and leveraging their respective expertise in the sector to support USI’s world-class management as it pursues its strategic plan for long-term growth,” said Christian Puscasiu, co-head of PE direct investing at CDPQ. “Our partnership was established to implement both firms’ patient, disciplined and collaborative investment approach. USI operates in a resilient sector characterized by stable, long-term returns and serves small and medium-sized businesses, which are the cornerstone of the US economy.”

The acquisition of USI by KKR and CDPQ is anticipated to close by the end of the second quarter of 2017 and is subject to customary conditions, including regulatory approvals.

“We are passionately committed to continuing and accelerating USI’s growth and investment as a leader in our industry,” said Michael J. Sicard, chairman and chief executive of USI. “We are excited to work with our new partners at KKR and CDPQ, and want to thank our partners at Onex for the tremendous support they provided to USI.” 

Now, my quick thoughts on this deal. The first article above states KKR said the sale of  USI Insurance Services to Aon for US$17 billion delivers roughly six times its return on the 2017 investment and 3.4 times its return on capital across the full life of the position.

In 2023, KKR bought back more than half of CDPQ's position for over US$1bn (C$1.4bn) to become USI's largest shareholder. At the time, La Caisse's Head of Private Equity, Martin Longchamps, described KKR as "a tremendous strategic partner in this investment journey."   

KKR delivered outstanding results on USI Insurance Services and the man who originated that deal back in 2017 was Tagar Olson (featured at the top of this post):  

Tagar Olson serves as a non-executive board member representing Integrum, Stout’s investment partner.

Tagar is a Founder of Integrum and Chairman of the firm’s Investment Committee.

Tagar has over twenty years of investment and acquisition experience, most recently during an 18-year career at KKR, where he was involved in numerous transactions valued at more than $50 billion in the aggregate.

Tagar joined KKR in 2002 and led the firm’s Financial Services industry vertical. At KKR, he participated as a member of the firm’s Investment Committee and Portfolio Management Committee within its Americas Private Equity business. He also served as a member of KKR’s Inclusion & Diversity Committee and its Investments, Markets and Distribution Committee, which was KKR’s most senior governance body.

During his time leading KKR’s Financial Services practice, KKR was one of the most active private equity acquirers of financial services and business services companies. Tagar was involved in KKR investments including Alliant Insurance Services, First Data (now Fiserv), Focus Financial, Mr. Cooper Group, Nephila, PURE, Resolution, Santander Consumer USA, Sedgwick and USI Insurance Services. Tagar also led KKR’s Hospitality & Leisure sector, where he was involved with KKR’s investments in Apple Leisure Group, KSL Recreation, Hotel del Coronado and La Costa Resort & Spa.

Prior to joining KKR, Tagar was with Evercore Partners, where he was involved in a number of private equity transactions and mergers and acquisitions.

Tagar currently sits on the boards of USI Insurance Services, Evertree Insurance, Mr. Cooper Group, Program Productions, and Strategic Risk Solutions. He is co-founder of the DHPS Foundation, a charitable organization dedicated to the research and treatment of rare genetic diseases. He holds a B.S. and B.A.S., summa cum laude, from the University of Pennsylvania. 

This is why La Caisse co-invested a large sum with KKR to acquire USI Insurance Services back in 2017, Tagar Olson brought a great investment to the table.

Had La Caisse kept its original position till now, it would have made even more money, but for portfolio reasons, they divested partially out of USI in 2023 and kept a little less than half their original position.

Still, a great investment in the burgeoning US insurance industry and now Aon will expand its operations with this strategic acquisition.

Again, this is why you want to invest alongside the best private equity funds: you gain scale, competence and fantastic long-term performance. 

Below, in this video, World trends breaks down the deal, including KKR’s approximately 6X return, Aon’s projected $395 million in synergies, the integration of more than 10,000 employees, potential regulatory scrutiny, and the expected earnings timeline through 2028.

Also, Bloomberg Intelligence reports KKR just scored $3.3 billion windfall on the sale of USI.

Lastly, TechStock reports Aon is nearing a $17 billion acquisition of USI Insurance—valuing USI at 5.7 times its annual revenue. This is nearly 23% of Aon’s total equity value. 

Why does it matter now? Analysts project Aon’s EPS to surge in the coming years, with an average price target 14% above current levels. But risks loom: debt funding, integration costs, and regulatory hurdles could impact earnings. Will this bold move accelerate Aon’s growth or mark an expensive gamble? Watch to get the edge before Monday’s market reaction.

Discover essential guidance for setting up and operating a versatile all-in-one device. This guide covers initial setup, basic functions, and troubleshooting tips, ensuring smooth printing, scanning, and networking experiences.

Follow steps for flawless operation. today

System Requirements

For reliable operation, the Brother MFC‑L2700DW must run on supported operating systems and drivers. Windows 7 / 8 / 10 / 11 (both 32‑bit and 64‑bit) with Service Pack 1 or later, macOS 10.12 or newer, and Linux distributions such as Ubuntu 18.04 or later with the official driver package. The device connects via USB 2.0 (maximum cable length 3 m) or Ethernet 10/100 Mbps; Wi‑Fi 802.11b/g/n (2.4 GHz) is required for wireless printing. Firmware updates are delivered through the web or USB; keeping firmware current prevents security and compatibility problems. The printer’s internal memory is 128 MB, so large print jobs benefit from sufficient host RAM. Scanning requires the latest ScanSnap or Image Capture software. The web interface needs a browser that supports JavaScript and cookies (Chrome ≥ 80, Firefox ≥ 78, Edge ≥ 80, Safari ≥ 13). Minimum network bandwidth is 10 Mbps for smooth print and scan operations. The printer supports duplex printing, 1200 dpi scanning, 24‑bit color, and uses 1.5 W standby power. It supports WPA2‑PSK encryption and IPv6. All drivers and software are available from Brother’s support site for the respective OS. The device’s power supply is 100–240 V AC, 50/60 Hz, 1.5 A, and it operates at 24 W during printing. For Windows, the driver package includes the .NET Framework 4.5 or higher; for macOS, XQuartz is required for some scanning functions. Linux users should install libusb‑1.0 and the official driver package. The printer supports IPv6 and WPA2‑PSK for secure wireless connections. The maximum supported print resolution is 1200 × 1200 dpi, and the scanner can capture 1200 dpi images. Duplex printing is enabled by default, and the device can handle up to 250 ppm. The device supports duplexing and can print up to 250 ppm, making it suitable for small office environments. All firmware and driver updates are downloadable from the Brother support portal.

Hardware Overview

The MFC‑L2700DW sports a compact chassis, a 2.4‑inch LCD, dual‑color LED indicators, and a 5‑inch touch panel. Inside, a 2.5‑inch scanner glass, 3‑color ink system, 1.5‑W standby power, and a 10‑foot USB cable. It prints 1200 dpi, 250 ppm, duplex, ideal for small offices!

Exterior Components

Designed for office environment, the MFC‑L2700DW’s exterior features a matte black chassis with a brushed finish that resists fingerprints. The front panel hosts a 2.4‑inch LCD display, surrounded by a thin bezel that houses a set of tactile buttons for power, menu navigation, and a dedicated scan button. A small, recessed LED indicator panel sits just below the display, providing real‑time status for power, network, and print jobs. The rear side of the unit showcases a multi‑port area: a USB 2.0 port for direct connections, a parallel port for legacy devices, and a dedicated Ethernet RJ‑45 jack for wired networking. An integrated power cord, rated for 110–240 V, terminates in a standard IEC C14 connector, allowing for easy placement on a power strip or wall outlet. The device’s footprint measures 20.9 inches wide, 13.8 inches deep, and 6.8 inches tall, making it compatible with most standard office walls and shelving units. The front door, located on the left side, opens to reveal the scanner glass which is protected by a clear cover that can be removed for maintenance. A small, recessed slot on the right side of the front panel houses the ink cartridge access door, which opens with a gentle pull to reveal the ink cartridge bay. The bottom of the unit features a removable tray that can hold up to 500 sheets of standard 20‑lb paper, and a separate tray for envelopes and labels. The overall design emphasizes ergonomics, with profile that minimizes clutter, providing easy access to controls and ports.

Interior Components

Inside the MFC‑L2700DW a compact architecture supports and a printing, scanning, and copying. The core is a 300 dpi color laser engine that drives a 120 ppm output module. Beneath the front LCD, a dual‑motor carriage moves the toner cartridges, while a dedicated fuser unit melts the toner onto paper. The scanner assembly sits on a precision glass plate, with a 1200 dpi optical sensor and a 50 mm focal length lens for sharp image capture. A separate, high‑capacity paper feed roller pulls paper from the 500‑sheet input tray, and a dual‑feed sensor detects misfeeds or jams. The device houses a 2‑GB SDRAM module for buffering print jobs, and a 4‑GB flash memory for firmware and user settings. A 1.5‑GHz ARM processor manages all operations, communicating via USB, Ethernet, or Wi‑Fi to the host computer. The internal power supply is a 120 V to 240 V AC transformer, converting to 12 V DC for the main board and 5 V for peripheral modules. A heat‑sink array and a small fan keep the internal temperature within safe limits during continuous use. The cartridge bay contains two toner cartridges (black and color) and a separate ink cartridge for the scanner. A small, removable maintenance panel allows access to the toner cartridge holder, the fuser, and the cleaning blade. All internal components are sealed to prevent dust ingress, and the design includes a grounding strap to reduce static build‑up. This integrated layout ensures reliable performance, easy maintenance, and a suitable office small footprint.

Unboxing and Physical Setup

Begin by removing the device from its packaging. Carefully open the cardboard box, noting the protective foam and the instruction booklet. Place the MFC‑L2700DW on a flat, stable surface, ensuring the front panel faces you. Unplug the power cord and disconnect any included cables. Inspect the front panel for the power button, status LEDs, and the 2.5‑inch LCD display. On the rear, locate the power input, USB, Ethernet, and Wi‑Fi antenna connectors. Attach power cord to the device and plug it into a grounded outlet. Connect the USB cable to your computer if you plan to use the USB driver; otherwise, you can skip this step. For network connectivity, plug an Ethernet cable into the RJ‑45 port or attach the Wi‑Fi antenna. Insert the supplied toner cartridges into the cartridge bay, aligning the tabs with the slots. Gently push until the cartridges lock into place. Load paper into the 500‑sheet input tray, ensuring the paper guide is snug but not overly tight. Finally, press the power button to start the initial setup wizard. Follow on‑screen prompts to select language, date/time, and network settings. To ensure longevity, regularly inspect the device for any signs of wear, such as worn rollers or misaligned trays, and replace parts as needed. Keep the device in a stable environment with moderate temperature and humidity levels, and avoid placing heavy objects on top that could cause vibration or pressure on internal components. Start now! Enjoy.

Software Installation

Download the latest driver and software bundle from the official support site. Use the provided link or the “Driver & Software” section. Select your operating system (Windows 10/11, macOS 12+, Linux). Click “Download” and run the installer. Follow the on‑screen wizard: accept license, choose installation folder, and select components (Print Driver, Scan Driver, Fax Driver, Web Services). When prompted, connect the printer via USB or ensure it is on the same network. The installer will detect the device and install necessary firmware. After installation, open the Print Center to verify printer status. Configure default settings: paper size, print quality, duplex mode. For scanning, launch the Scan application and set default destination (PDF, JPEG). Test each function to confirm proper operation. If the device is not detected, check firewall settings and disable antivirus temporarily. For Linux, use the provided .deb or .rpm packages and run “sudo apt‑install” or “sudo rpm‑install”. Keep the software updated by checking the “Check for updates” option in the Control Panel. For advanced users, enable the web interface by navigating to the printer’s IP address in a browser and logging in with the admin credentials. This interface allows firmware upgrades, network configuration, and detailed diagnostics. Finally, create a backup of the printer’s configuration using the “Backup” feature in the web interface; Store the backup file on a secure location. This completes the software installation process. Enjoy reliable printing, scanning, and faxing. Verify firmware compatibility; the installer may prompt an update. Set the default paper tray and enable color management by selecting the appropriate ICC profile. If errors arise, consult the troubleshooting section or support forum. Restart your computer after installation to apply changes. Enjoy full functionality. Now. All!

Printer Configuration

Begin by accessing the printer’s web interface: open a browser and enter the device’s IP address. Log in with the default credentials (admin/password). From the dashboard, navigate to the “Device Settings” section to adjust paper size, tray assignment, and print quality. Set the default paper tray by selecting the appropriate slot in the “Paper Source” menu. For duplex printing, enable “Two‑Sided Printing” and choose the desired binding orientation. Configure the color management by selecting the correct ICC profile under “Color Settings.” Next, establish network connectivity: under “Network Settings,” choose “WLAN” for wireless or “Ethernet” for a wired connection. For Wi‑Fi, select your SSID, enter the password, and confirm the connection. Verify the IP configuration—static or DHCP—and update the DNS if necessary. In the “Advanced” tab, enable “Print via Web Services” to allow remote printing. Set the default print mode to “High Quality” for detailed documents or “Draft” for quick prints. Finally, save all changes and reboot the printer to apply the new configuration. Test by printing a test page from the web interface or from a connected computer. If the printer does not respond, check the firewall settings and ensure the correct ports (80, 443) are open. For further customization, use the “Print Settings” dialog on your PC to create custom presets. This completes the basic configuration process for optimal performance.

Ensure you have the driver installed. Now!

Printing Functions

Print a single page or a full document by selecting “Print” from the application’s menu. The printer supports high‑resolution output up to 600 dpi for text and 1200 dpi for images. Choose the paper size (A4, Letter, Legal) and orientation (Portrait or Landscape) from the print dialog. For duplex output, toggle the “Two‑Sided” option and specify binding direction. The device offers “Print Quality” presets: Draft, Normal, and High. Adjust the “Print Speed” slider to balance speed and clarity. Use the “Print to PDF” feature by selecting the printer from the virtual PDF driver; the resulting file is stored in the default folder. For large documents, enable “Print in Batches” to reduce memory usage. The “Print Preview” window displays page layout and margins. The “Print Settings” panel allows custom presets: set paper source, print quality, and duplex mode, then save as a named profile for quick access. The printer also supports “Print from Cloud” via the web interface; upload a file and choose the desired settings. For color management, select the appropriate ICC profile under “Color Settings.” The “Print Queue” lists all pending jobs; you can pause, resume, or cancel jobs directly from the interface. The device’s status LEDs indicate readiness, error, or paper jam conditions. Use the “Print Test Page” function from the control panel to verify alignment and color accuracy. All printing functions are accessible via the device’s touchscreen or the web interface, ensuring flexibility for both office and home use.

When printing color documents, the printer automatically calibrates the color profile based on the selected ICC file. For monochrome prints, the device uses a gray‑scale algorithm that optimizes toner usage. The “Print to USB” option allows direct printing from a USB drive; simply insert the drive, select the file, and press Print. The printer’s “Print History” feature logs all jobs, enabling audit trails for compliance. For large print jobs, the “Print Job Queue” can be managed from the web interface, allowing administrators to set priority levels. The device supports “Print from Mobile” via the Brother iPrint&Scan app, which provides wireless printing from smartphones and tablets. The “Print Settings” dialog also offers a “Print to Email” function, where the printer can send a PDF copy of the job to a specified email address. All these functions collectively streamline workflow and reduce manual intervention.

Fax and Scan Features

Scan documents to PDF, JPEG, or TIFF with adjustable resolution up to 1200 dpi. Choose paper size, color mode, and file format from the touchscreen menu. The device supports duplex scanning and automatic document feeder (ADF) for up to 50 pages. Scan to PC via USB, Wi‑Fi, or cloud services such as Google Drive and OneDrive. Use the built‑in OCR to convert scanned images to editable text, selecting language and output format. Faxing is available with a 1‑line display of status and a 2‑line LCD for the fax number. Send faxes directly from the device by entering the number or selecting from the address book. Receive faxes to the internal memory or to a USB drive. The fax modem supports 33.6 kbit/s and 56 kbit/s speeds. The device logs fax history, including date, time, and status. Scan and fax functions are accessible via the web interface for remote operation.

The device stores up to 200 fax contacts, supports compression, and can schedule scans via the web interface. An SD card slot accepts up to 32 GB for storage. Fax history can be exported as CSV,and email notifications deliver faxes. Security settings restrict access, firmware updates are available from site. The device also supports fax compression and error‑correcting modes for reliable transmission over noisy lines. Scanning can be scheduled via the web interface, enabling automated batch processing. The SD card slot accepts up to 32 GB for extra storage, and fax history can be exported as CSV for record‑keeping.

All set go.

Network Connectivity

Connect via Ethernet or Wi‑Fi. Use the 802.11b/g/n interface for wireless printing. Configure IP, DNS, and DHCP on the device. The web interface supports WPS and WPA2‑PSK. Print, scan, and fax over LAN or Wi‑Fi. The device supports IPv6 and mDNS for easy discovery.

Ethernet Setup

To establish a wired network connection, first plug the provided RJ‑45 cable into the Ethernet port on the rear panel of the device and the other end into a router or switch. The device will automatically detect the link and negotiate the speed and duplex settings. If you prefer a static IP address, access the device’s web interface by entering its current IP in a browser. Navigate to the “Network” section, select “LAN Settings,” and choose “Manual.” Enter the desired IP address, subnet mask, and default gateway, and DNS servers. For dynamic addressing, enable “DHCP” and the printer will request an IP from the network. After saving, the device will reboot and display the new network configuration on the front panel. Verify connectivity by printing a network configuration page from the control panel. If the printer does not appear on the network, check that the cable is securely connected, the router is functioning, and that the firewall is not blocking the device’s MAC address. For advanced troubleshooting, use the “Network Diagnostics” tool available in the web interface to test ping and traceroute to external hosts. Once the connection is confirmed, the printer will automatically appear in the driver lists of connected computers, enabling seamless printing, scanning, and faxing over the wired network. The printer also supports IPv6 and can be discovered via mDNS for quick setup. It offers secure printing HTTPS.

To connect the device to a Wi‑Fi network, press the Menu button on the control panel, then navigate to Network → WLAN → Setup Wizard. Select the desired SSID from the displayed list and enter the password using the on‑screen keypad. The printer will attempt to authenticate; a green WLAN icon will appear on the front panel upon success. For networks requiring WPA3, choose WPA2/WPA3 Mixed mode. If the printer fails to connect, verify that the router’s firmware is up to date and that the SSID is not hidden. To manually configure network settings, select WLAN → Advanced Settings → IP Address, then choose Manual and input the static IP, subnet mask, gateway, and DNS servers; After saving, the printer will reboot and display the new configuration. Use the Network Configuration Page (Menu → Network → Print Config Page) to confirm the connection. For secure printing, enable WPA2/WPA3 Personal and set a strong passphrase. The device also supports 802.11ac for higher throughput. For troubleshooting, consult the Help section on the control panel or the online manual at Brother Support. Use diagnostics. !!

Advanced users can configure VLAN tags, static ARP entries, and SNMP monitoring via the web interface under Advanced settings, allowing granular network control and compliance with enterprise security policies. Improves stability!! Stable.

Maintenance and Troubleshooting

Regular maintenance keeps the MFC‑L2700DW running smoothly. Start by cleaning the platen roller, drum unit, and paper path with a lint‑free cloth lightly dampened with water or a 50/50 water‑isopropyl solution. Avoid abrasive materials that could scratch the drum. Replace the ink cartridge when the indicator light flashes or the print quality drops; use only genuine Brother cartridges to prevent damage. Check the ink level via the control panel or the printer’s web interface. For optimal print quality, perform a drum unit reset after every cartridge change: press the Menu button, select Maintenance → Drum Reset, then confirm. If you encounter paper jams, open the rear tray, remove any torn or folded sheets, and gently pull the jammed paper from the top and bottom paths. Use the Clear Jam function on the control panel for minor obstructions. When the printer displays error codes such as 0x1234 or 0x5678, refer to the error code list in the user manual; common issues include low toner, misaligned paper, or a faulty sensor. For network problems, reset the wireless settings by selecting Network → WLAN → Reset and re‑enter the SSID and password. If the device fails to print from a mobile app, ensure the latest firmware is installed via Menu → System → Firmware Update. If the printer fails to print from a mobile app, refer to the latest firmware via the control panel. For persistent issues, run the built‑in diagnostics: press Menu, choose Maintenance → Diagnostics, then select Print Test Page and Print Error Log. These logs can be emailed to support for further analysis. Finally, keep the printer’s firmware up to date by downloading updates from the Brother support site and applying them through the web interface or the Firmware Update utility. Proper upkeep extends the machine’s lifespan and ensures reliable performance.
For advanced users, the printer’s web interface offers a “System Information” page that displays firmware version, serial number, and network status. If the device shows a “Printer not found” message, try restarting the router or assigning a static IP to avoid DHCP conflicts. In case of recurring ink smudges, clean the print head with the supplied cleaning kit. If the printer’s power LED remains on after a power outage, check the power cord for damage and ensure the outlet is functioning. Always unplug the unit before performing any internal cleaning or part replacement to prevent electrical shock. Check logs

Firmware Updates and Warranty

Keeping the MFC‑L2700DW current guarantees optimal performance and security. Firmware can be updated via the built‑in web interface, the printer’s control panel, or the Brother iPrint&Scan app. To update through the web interface, connect the printer to the network, open a browser, and enter the device’s IP address. Navigate to the “Maintenance” menu, select “Firmware Update,” and follow the on‑screen prompts. The printer will download the latest package from Brother’s servers, verify the checksum, and install it automatically. When using the control panel, press the Menu button, go to System, then Firmware Update, and choose to download from the internet or from a USB drive. The USB method requires a FAT32‑formatted drive containing the firmware file named “BFRxxxx.bin.” After installation, the printer reboots and displays the new version number. Firmware updates also resolve known bugs, improve driver compatibility, and add new features such as enhanced security protocols and improved wireless stability. All updates are free and available now ! The warranty is valid only in the region of purchase and is non‑transferable. All firmware updates are covered under the warranty, ensuring that any issues arising from a legitimate update will be addressed by Brother’s support team. For detailed terms, refer to the printed warranty card or the online warranty information page on Brother’s official website.

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Sean Conlon, Lee Ying Shan, and Alex Harring of CNBC report the S&P 500 falls Friday after Fed’s Warsh highlights inflation worries, but index posts positive week:

The S&P 500 fell on Friday, but still notched a winning week, after Federal Reserve Chairman Kevin Warsh conveyed some worry over current inflation trends.

The broad market index lost 0.25% and closed at 7,711.76, while the Nasdaq Composite slid 0.52% to 26,402.42, weighed down by losses in semiconductor stocks such as Nvidia and Intel. The Dow Jones Industrial Average was down 9.45 points, or 0.02%, and ended at 53,559.99.

The S&P 500 advanced 0.5% on the week, while the Nasdaq gained 0.9%. The Dow climbed 0.5% in the period for its first winning week in three.

In his remarks at the central bank’s annual symposium in Jackson Hole, Wyoming, Warsh said, “While this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved.”

He also said, “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job ... our mandate ... and our charge to keep.”

Bets among fed funds futures traders that the Fed will raise interest rates in September increased to 57.5% on Friday, per CME Group’s FedWatch tool. That’s up from 35.4% just a day ago.

Treasury yields on the short end of the curve were higher immediately after Friday’s speech, while those on the long end — which are linked to borrowing costs throughout the economy and have been a source of concern for markets recently — were roughly flat. By the end of the trading day, however, those on the short end had come off their lows.

“I found this speech in particular to be a very strong kind of message, both a message to the market but also just a kind of message in general that the way the Fed has done business for maybe the last 40 years in some ways has not been as rigorous as it could be,” said Bill Birmingham, managing director at REX Financial.

Birmingham added that Warsh’s comments about the composition of CPI in particular signal “that he is very much looking for consensus internally to raise rates,” he added.

Investors also digested more earnings results. Gap shares jumped about 13% despite a mixed quarterly report as the retail announced a new chief executive for the struggling Old Navy brand. Marvell Technology slid more than 10% after issuing current-quarter guidance for non-GAAP gross margin that disappointed the Street. 

Jennifer Schonberger of Yahoo Finance also reports Warsh offered forward guidance after all, former Fed vice chair says:

Markets knew they weren't going to get an answer to what the Federal Reserve would do next — so-called forward guidance — when the central bank's chairman, Kevin Warsh, spoke on Friday morning. The biggest question looming over Warsh's highly anticipated speech was whether he would clarify how the Fed will respond to rising inflation.

On that, he delivered, former Fed vice chairman Alan Blinder, now a professor of economics at Princeton University, said in an interview with Yahoo Finance.

Warsh painted a robust picture of the US economy, noting that economic growth appears to have strengthened, while characterizing the labor market as stable at full employment. He underscored that inflation remains too high and that while this summer's inflation readings were better than expected, they "do not tell me that underlying trends have meaningfully improved."

"I would call that forward guidance," Blinder said. "He doesn't call it forward guidance … That sounded to me like somebody who thought interest rates should go up, right?" 

Blinder thinks a September rate hike is on the table, saying Warsh sounded "like a man who was rationalizing raising interest rates."

"My guess is they'll be raising rates in September, just a quarter of a point, and [then] they'll wait," he said. 

Traders appear to agree. Odds of a September rate hike rose to nearly 60% following Warsh's speech, up from 35% on Thursday.

"Markets almost always want more clarity than policymakers can deliver," Blinder added. "There's a classic mismatch between the concreteness, I'll call it, that the markets are constantly craving. I think it's the case that Kevin Warsh wants to be a little less open than, say, [former Fed Chair] Jay Powell."

In his speech, Warsh laid out the data he's monitoring to set policy and reaffirmed that the Personal Consumption Expenditures index (PCE) is the Fed's preferred yardstick for inflation, after suggesting it may not be in July. 

He said he is watching changes in the growth rates of corporate earnings and capital spending, as well as the follow-on effects on asset prices, business confidence, consumer incomes, and spending.

Another former Fed official weighs in

Esther George, former president of the Kansas City Federal Reserve, said she thought Warsh delivered a very good speech.

"Although he stopped short of saying 'and here's what we'll do about it,'" she said of his economic assessment, "I think it sets it up in a way that is true to what he set out to do, which is 'I'm not going to over promise, but I'm going to tell you what we're concerned about.'" 

George applauded Warsh for parsing the numerous components of PCE to pinpoint how much higher certain subsectors were.

"I think that kind of analysis is important because when you're looking at trends, when you're trying to justify where you see the path, you really have to drill into it.

"So to me, his conclusion (was) that it's concerning, we know our job is price stability," she said.

More data incoming

Before their mid-September meeting, Fed officials will receive another Consumer Price Index reading, as well as data on wholesale prices, which can be used to reverse-engineer the calculation of their preferred PCE measure.

Blinder posited that Warsh thinks forward guidance means telling the public how much the Fed would raise rates in a certain time frame.

"That's not what I mean by forward guidance. It's not what a lot of people mean by forward guidance," he said. 

I titled this comment "Beyond Jackson Hole 2026 Edition" because I think traders are making way too much of a big deal on Fed Chair Kevin Warsh's remarks which he delivered earlier today.

Was it a decisively hawkish speech? It sure was, focusing on rising inflation, appeasing the hawks at the Fed who want the policy rate to rise.

But will it make a difference by mid-September, when the Fed meets to discuss policy and decide whether to raise the policy rate? Colour me skeptical, but unless you see a blowout number in the August payroll data, I strongly doubt the Fed will raise interest rates next month.

The Fed is way more preoccupied now with slowing labour markets than it is with inflation data.  

Also, Treasury Secretary Scott Bessent who meets every week with Kevin Warsh is fully engaged in yield curve control, with mixed results. Hard for me to see Warsh going against that trend. 

Importantly, I don't see the Fed going against the Treasury and raising rates right before US midterms. 

Even if Alan Blinder is right and the Fed raises by 25 basis points and stays put, it will not make a huge difference.

What I realize is that these Fed meetings are just used by traders to take profits and wait for another opportunity to go long risk assets. 

We are also running into September-October where mutual funds close their year, so expect volatility.

What else happened this week? King Kong, aka Nvidia, had another blowout quarter, significantly raising guidance for all of 2027.

The stock rallied sharply after it announced but didn't make a new 52-week high.

CrowdStrike (CRWD) stock surged on Thursday amid second-quarter earnings and revenue that topped consensus estimates while the cybersecurity firm's October quarter guidance came in above expectations. 

That sent all cybersecurity shares up.

Also, shares of Salesforce (CRM) jumped 22% Thursday after the company reported a beat on second-quarter earnings and announced an expanded partnership with artificial intelligence startup Anthropic. 

But it all came down to Jackson Hole today and that's what everyone focused on today.

Will the Fed finally raise rates in September? Give me a break! 

Here are the top-performing US large cap stocks this week (full list here): 

 And here are the worst-performing US large cap stocks this week (full list here):

Alright, let me wrap it up there. Enjoy your weekend, everyone, and don't fret about the Fed's next policy move; it's largely irrelevant.

Below, Federal Reserve Chairman Kevin Warsh said inflation isn’t meaningfully slowing and warned that policymakers must be confident that it is, otherwise the central bank has “work to do.” He reiterated that policymakers will return inflation to their 2% goal, which he said is a firm and fixed target. He spoke at the Fed’s annual economic symposium in Jackson Hole, Wyoming.

Second, Mohamed El-Erian, Allianz chief economic advisor, joins 'Closing Bell' to talk his takeaways from Fed Chairman Warsh's Jackson Hole speech.

Third, CNBC's Steve Liesman and Randall Krozner, Fmr. Federal Reserve governor, react to Fed Chairman Kevin Warsh's Friday speech at Jackson Hole.

Fourth, Dan Niles, Niles Investment Management founder, joins 'Squawk on the Street' to discuss Fed Chairman Warsh's Friday speech at Jackson Hole.

Lastly, Nvidia went up on good numbers, which Tom Lee points out it almost never does. That, in his read, is the healthy part of the story. Fundstrat's updated top stock ideas and the full framework behind this view were covered in the latest Fundstrat Direct webinar.

Barbara Shecter of the National Post reports AIMCo assets top $200 billion as public equities drive gains:

Alberta Investment Management Corp. surpassed $200 billion in assets under management with a 7.1 per cent net investment return in the first half of the year marked by conflict in the Middle East, U.S. trade policy uncertainty and evolving inflation expectations.

The provincial Crown corporation that invests on behalf of pensions, endowments and government funds had $210.7 billion in assets under management as of June 30.

Chief investment officer Justin Lord said the trade situation and other geopolitical and macroeconomic developments are front and centre for the globally invested fund, which has a strong presence in North America. About 40 per cent of AIMCo’s assets are invested in Canada.

“A prolonged dispute, whether it’s in the Middle East (or) whether it’s trade-related, certainly could create headwinds for the Canadian economy, for the equity market,” he said. “And that’s something we’re monitoring closely.”

Public equities were the strongest contributor to AIMCo’s performance in the first half of the year, benefiting from resilient corporate earnings and continued strength in AI-related sectors and global equity markets. The results were moderated, however, by private equity, where there was lower transaction activity and valuation pressure in software-related investments.

“Private equity, perhaps even more so today, is playing a vital role in diversification across our equity exposures,” Lord said.

“A number of of equity markets, be it global or emerging markets, are really reliant on a couple of very similar underlying themes with respect to where we’re seeing earnings growth and price appreciation contributing to that strong performance,” he added.

AIMCo’s private equity program is focused on fund and co-investment, and Lord said the team is seeing a number of opportunities that align with the fund’s strategy, as well as an increase in secondary deal flow.  

Public equities and absolute return strategies make up the bulk of AIMCo’s portfolio, at 38 per cent. The balance is split between private markets and money market and fixed income.

Lord said he plans to connect next month with “peers” and “partners” attending the Canada Investment Summit on Sept. 14 and 15, a conference convened by Prime Minister Carney that has a guest list of large global investment funds.

“We do have a significant amount of our assets invested here across a number of different asset classes and, should compelling opportunities arise, we’d be happy to … underwrite those transactions, much like we would in any other jurisdiction,” he said.

Lord said there are no hard targets or caps on AIMCo’s investments in Canada.

“We have a strong interest in seeing, obviously, a competitive and attractive investment environment here in our own backyard,” he said, “but we do invest globally on behalf of our clients and … ultimately, our responsibility is to deliver that long-term return for clients, and that means investing where we see the best opportunity to create value over time.”

Today, AIMCo issued a press release stating it has surpassed $200 billion in assets under management: 

AIMCo reached a significant milestone in the first half of 2026, surpassing $200 billion in assets under management while continuing to deliver strong long-term investment results for clients.

At the halfway mark of 2026, AIMCo’s Balanced Fund earned a 4-year annualized net investment return of 9.9% and a 10-year annualized net investment return of 7.8% for clients.

For the six-month period ending June 30, 2026, the Balanced Fund’s net investment return was 7.2%.

Chief Investment Officer Justin Lord shares more details on the results (watch below and here).

You can also read the brief report AIMCo put out at the bottom of the page under Justin's video here.

Below, I provide the details:

 

Some quick points. Overall, the results are solid and better than most of its peers, reflecting AIMCo's higher exposure to public markets.

Public Equities led the gains but there were positive contributions from Public Fixed Income, Private Mortgages, Private Debt and Loan, and Infrastructure.

Performance in private market portfolios, particularly Private Equity, moderated overall results amid lower transaction activity and valuation pressure in software-related investments.

Discussion With Justin Lord, AIMCo's CIO, On Mid-Year Results

Earlier today, I had a chance to catch up with AIMCo CIO Justin Lord to go over mid-year results. 

I want to begin by thanking him as well as Sabrina Bnaghoo and Alexandra Zabjek for setting up this Teams meeting, sending me material and assisting the meeting.

Keep in mind, I spoke with Justin in late March when I covered AIMCo's 2025 results here.

At the time, AIMCo's corporate annual report was not available, but it has since been released and is available here.

Justin began by giving me an overview of the results:

Yeah, certainly a couple of main points: Our mid-year updates tend to focus on the broader portfolio, the amalgamation of the client portfolios across the balanced fund. As you'll see, the net investment return was 7.2% for the first half of the year. That's $13.6 billion in net investment return across our client accounts.

Our four-year annualized number is 9.9%, reflecting that strong long-term performance that our clients depend upon and certainly positively impacting the 10-year annualized net return of 7.8%. As a long-term investor, we’re focused here with respect to fulfilling our mandate and meeting clients' needs. The other point to note, AIMCo did surpass $200 billion in assets other management as well, just reflecting that continued growth and collective scale of our clients across pension, insurance and government funds that are entrusted to us to manage.

But just owing to that scale that does position us to continue to access compelling investment opportunities that enhance that ability to deliver the long-term value on behalf of our clients and all Albertans. This is really key to our mandate, and I think we're demonstrating that we're achieving that successfully. One thing to note, our pension clients, for example, are currently fully funded, which should give all Albertans with a public pension plan a great deal of comfort regarding their financial futures.

And last but not least, the investment strategy that we put in place at the beginning of the year or at the end of 2025 has thus far proven to be moving in the right direction, with a focus on our core strategic capabilities, our competitive advantage from both structural and developed perspective, focusing on the strategic capabilities from a liquidity management portfolio construction perspective as it relates to our client portfolios overall.

Perhaps I'll leave it there, Leo, and we can jump into what you have with respect to asset classes, just noting that we'll keep some of the asset class level comments high-level. Again, we don't publish the underlying performance at mid-year and happy to go into much more detail once annual results are available, as we did last time.

I told Justin that I don't know what the (blended) actuarial hurdle rate is at AIMCo (6% or 6.3%?), but I said any time you're delivering above 7% on mid-year results, that is very strong and I especially noted the 9.9% annualized return over the last four years because that's excellent.

I asked him if they beat their benchmark in the first half and he replied:

I don't believe as a part of the mid-year results we focus on or provide those additional details, Leo. So I can't comment specifically given that at the total client portfolio level, we have a number of asset classes that will have various valuation schedules throughout the year. 

Perhaps what I can comment on is that across public markets, despite the continuing concentration that we're seeing in underlying performance in equity indices, both certainly, when looking at global and emerging market indices as a whole, the team has been able to, through portfolio construction exposures, absolute return exposures and various active mandates, keep up with or outperform their benchmarks year to date. That's a big mid-year number and I certainly wouldn't want to get ahead of ourselves until annual results are out.

Fair enough. I asked Justin about their new strategy and whether or not they are taking more risk in public or private equities. He replied:

It really impacts each asset class to ensure alignment with our overarching strategy and leaning into the structural development sources of edge across the AIMCo platform. 

Where we've made a few changes in public markets are really to ensure that we're providing the beta across our portfolio that our clients expect as efficiently as possible with a, I guess, renewed or refocused mandate from liquidity, collateral balance sheet management perspective.

And then the second part of that is ensuring the consistency of alpha generation across those mandates. So where we're taking active risk has evolved slightly with a focus on areas internally that we have a demonstrated capability or a proven track record and then certainly partnering with our external managers in areas where we feel active risk is attractively priced overall as we've seen, probably a slight reduction in active risk taking through security selection across the portfolio and an increase or maintain level of active risk and exposure through absolute return strategies internally and externally, both for direct client allocations to the absolute return product in their asset mix and/or portable alpha exposures on top of our synthetic beta within the equity platform.

I noted AIMCo uses a portable alpha structure to add alpha over their beta exposure and that absolute return strategies (hedge funds) have done well for all major pension funds over the last few years.

He replied: 

Yes. And I think we're in an environment where that can potentially continue as we see increasing dispersion between asset classes, certainly a higher base rate of interest rates that creates a return profile that should be a spread above those fixed income rates of return that tends to meet clients return expectations not only from a direct allocation perspective, but certainly as a very efficient form of active risk at the total client portfolio level.

I agree with that assertion and will add that higher interest rates also mean a higher hurdle rate for internal and external absolute return strategies as the T-bill rate has risen.

We moved on to private markets, where I noted that some headwinds are impacting private equity returns. I noted that certain segments of real estate seem to be turning the corner and infrastructure remains steady, providing pension funds with solid, long-dated, inflation-adjusted returns. 

Justin responded:

We spend a lot of time working with our clients and their respective asset class teams to really, I guess, hone in and define the role that those asset classes play in our clients’ portfolios. 

When thinking about what we need exposure to in this environment, obviously, we're looking for growth from a portfolio building block perspective, income, inflation protection, and broader diversification impacts or contribution at the client portfolio level. 

Specifically, infrastructure right now is fulfilling a number of those needs from a growth exposure to a degree, but primarily income and inflation protection as a function of the underlying quality of the portfolio, the quality of cash flows that are underwritten across the portfolio of assets. We're continuing to see attractive opportunities in infrastructure globally, both domestically and globally as it relates to our underlying product strategy. We're spending probably more time in the core-plus sub-segment of the market. There's a lot of competition for traditional core infrastructure assets, much like we had seen private credit over the last number of years when capital flows to parts of these markets, it can compress returns, and our view is that that sometimes creates opportunities where you might be not be fairly compensated for the overall risk that you're taking. 

So really with an overarching philosophy of looking for those opportunity sets across our asset classes where risk is attractively priced, let’s call it part art and science from a portfolio construction perspective.

And we’re seeing attractive deal flow there, pockets of private credit as well, despite valuations and credit spreads that are still slightly elevated. This just puts more importance on the underlying underwriting and structuring of this exposure in general. 

And then last but not least, you had mentioned private equity. And our private equity platform and strategy has been in place for over a decade now under Peter's leadership with , as you'll be familiar with, a fund and co-invest model overall. Certainly, we are seeing some green shoots as it relates to liquidity with capital markets activity and the IPO pipeline really coming to fruition. It feels like the market's been waiting for this for a number of years, and this amount of deal flow has been well received. That is a positive. We'd like to see that continue. We're assessing opportunities across certainly our manager and co-investment network, a growing secondary opportunity set in general and a broader capital solutions or strategic capital solutions opportunity set, which almost fits in between a private equity or private credit allocation, which we think is attractively priced risk exposure in general that is generated by our partnership network with both GPs and issuers. 

Coming back to the role that private equity plays in the portfolio and the roles we're looking for from our asset classes as they contribute to our clients’ total portfolios, the one of diversification stands out as well, given the underlying concentration across not only public equity markets but you're seeing a fair amount of underlying macro drivers, obviously associated with the proliferation of artificial intelligence and capex, impacting not only public equities, but investment-grade public fixed income, public credit, private credit exposures, and to a degree some infrastructure and real estate exposures as well. So looking at the role that private equity plays in diversifying the growth factor in portfolios in general, it's likely to be as important in the next five to 10 years as it has been over the last decade.

Justin kept hammering the point of why private equity remains an important asset class from a diversification perspective and he's right. When growth-oriented public equity indexes finally suffer a protracted bear market, whenever that happens, many value-oriented segments of private equity will finally outperform (stale pricing also adds to diversification).

I asked him if co-investments figure prominently in infrastructure at AIMCo as they do in private equity and he replied:

Our infrastructure portfolio is actually broad, and we do have obviously fund and co-investment relationships as well. Direct investments are a much smaller part of the private equity strategy at AIMCo and owing to the strategic tilt a little over 10 years ago with the refocus of the program on the fund relationship and co-investment model.

I asked Justin what he sees in Real Estate because from my discussions, it seems like there is an inflection going on there. He replied:

I would agree. Perhaps inflection is maybe too strong of a word. We are seeing attractive deal flow across a number of geographies and sectors within real estate as the industry recovers. At different places, there's a lot of differentiation, be it office, grocery, retail, multifamily, or industrial exposures, and also depending on geography. We do have a view that there are attractive opportunity sets today and we expect to be active in real estate over the coming quarters and years. And perhaps more of a continued gradual recovery than an inflection point or something that we would see a sharp reversal.

I asked him if it's fair to say AIMCo has more exposure to Canadian real estate than its peers and he replied:

I'm not sure comparing to the other funds. We have a Canadian and a global real estate product. Our Canadian product is larger than our global product and the two strategies have a bit of a different focus. Global product being traditionally more opportunistic and Canada being more focused and really aligned with where we're evolving our real estate program to ensure that those roles of income generation and inflation protection are present for our clients’ allocations.

I noted AIMCo's allocation to public markets is roughly 70% and asked him if they are happy with the current allocation to privates. He responded:

We're comfortable with current allocations as it stands. We do have, where we would be under allocated in private markets, those risk exposures are represented by public markets. So to the degree that we are allocating additional capital across infrastructure, real estate, private credit and or private equity, there could be small reductions in public market allocations. You're correct in your analysis, Leo, I believe as of mid-year, we’re just under 70% of public markets as a whole. We do include absolute return allocations, those direct allocations in the public equities illustration as you'll see in the report also.

I also noted some of their peers have increased their allocation to Canadian equities (notably OMERS) this year and asked him if they did so too. He replied:

Our allocations to Canadian equities are going to be a combination of what our client allocations are and any broader views from a diversification or active risk-taking perspectives that AIMCo is managing. 

We do have a fairly large allocation to Canadian (public) equities as we haven't seen any large shifts, either from client allocations or from our broader active risk-taking environment. Canadian equities do represent over 5% of the total portfolio. 

We don't necessarily set a target allocation based on geography; that's all going to be a function of really risk pricing, coming back to the overarching investment philosophy and that's underpinned by fundamentals and valuation. 

We certainly, we deal with a different type of concentration in the Canadian equity markets, and it has benefited client accounts given the relative pricing of that exposure and the performance over the last couple of years.

I asked if they hedge their US dollar exposure and he replied:

It depends on the product, Leo. We do hedge most of our US dollar exposure at the product level and at the benchmark level, but perhaps we can follow up on something more granular, if you'd like as well. 

Lastly, I noted AIMCo resides in Alberta and there are many geopolitical and trade currents right now in the background, so I asked him how they are reacting, if at all. He responded:

That's a good question. And I probably come back to the overarching philosophy that we're global investors. As we talked before, it really comes down to where we're finding the best opportunities from a risk-pricing perspective that align with our products and our client allocations as a whole. We have approximately 40% Canadian exposure across our broader product mix in general, and certainly to the extent that there are additional opportunities to allocate capital in Canada that are competitive from a risk-return perspective, then our teams are certainly engaged and looking for those opportunities as well.

We left it at that, covered quite a bit for the mid-year results.

Once again, I thank Justin Lord for taking the time to chat with me and I also wanted to thank Alexandra Zabjek for sharing the transcript with me because some of Justin's replies came out muffled on my end.   

Still, great interview, always enjoy catching up with Justin.

Below, AIMCo CIO Justin Lord shares more details on mid-year results  (also see clip here).

Muskan Arora of Markets Group reports Finland’s former pension chief says future cash flows, not markets, capped his risk appetite:

Timo Löyttyniemi, the former chief executive officer spent more than two decades running Finland’s state pension fund, Valtion Eläkerahasto (State Pension Fund of Finland), and in his account, the biggest constraint on his strategy in the final stretch wasn’t markets at all — it was future negative cash flows.

The government will pull an extra €1B out of the €25B fund next year, part of a broader pattern of tapping VER to help cover rising pension costs from an aging population. Löyttyniemi, who retired in February, said the fund ran extensive return simulations in response but left the harder structural decisions to his successor. “These extra outflows to the government made us postpone the plans somewhat during my time. But, of course, it’s now up to the new management to consider what the risk and sufficient and comfortable risk level is.”

“That will be also determined by future returns,” he added.

That caution shows up most clearly in a single number: 20%. That’s roughly where Löyttyniemi held VER’s private markets exposure — private equity, private credit, infrastructure and real estate combined — through nearly his entire tenure, even as other Finnish pension funds pushed allocations north of 40%, some blending in hedge funds to get there. He never reversed the strategy. He simply wouldn’t let it grow once outflows started climbing.

“When there’s uncertainty in terms of the cash flows . . . the size of the private portfolio cannot be increased aggressively,” he said, pointing to a forward return expectation near 5.5%, against outflows already running four to five percentage points a year.

Löyttyniemi is more assertive discussing the one strategic reversal he did make. VER lifted its prohibition on defense investment in spring 2022, rewriting its sustainability framework within weeks of Russia’s invasion of Ukraine. The policy shift itself was fast; getting the market to believe it was another matter. He says he spent few years afterward correcting consultants, banks and even VER’s own private equity managers who assumed the old restrictions still applied.

“I realized going forward that people still thought that there were some restrictions, and I really wanted everyone to understand,” he said. VER’s direct exposure ran mainly through Nordic — largely Swedish — defense-adjacent equities, layered on indirect exposure through index products that had been quietly compounding the theme all along. Now, he sees huge demand in physical products, such as Information and Communication Technology security and drones.

He’s just as direct in dismissing geopolitics as a filter for developed market decisions. Europe, the Nordics, the U.S. and developed Asia, he said, were never debated internally on political grounds during his tenure — the closest exception came in 2025, when U.S. tax-policy uncertainty pushed VER toward more conservative commitment sizing on U.S.-linked private market products. China is the one market where he pushes back hardest against the geopolitical framing altogether. During his tenure, VER kept its exposure to Chinese equities and fixed income deliberately low throughout his tenure, noting the real driver isn’t politics.

“It seems to boil down to the low profitability of these companies,” he said, pointing to high-volume, low-margin businesses with weak earnings growth.

“So this is more an economical than geopolitical issue but both play a role.”

On manager selection, Löyttyniemi credits VER’s edge to accumulated diligence rather than any single call. Re-upping with an existing manager was, in his words, “an easier decision” than backing a new one, since years of prior scrutiny had already resolved most of the uncertainty a first-time relationship carries. What his team weighed most heavily wasn’t short-term performance but succession — whether younger partners were stepping up as a manager’s founders aged out.

He is similarly unequivocal about Silicon Valley Bank’s collapse in March 2023, which he called an idiosyncratic failure of specific banks rather than a systemic event, though he pointed out that three years later, the fallout has been contained. Still, he cautioned that every crisis has its own features and today’s playbook won’t necessarily transfer cleanly to the next one.  

I don't normally cover Finnish pension plans, but I like this profile article and wanted to bring it to your attention.

Timo Löyttyniemi, the former CEO of Finland’s state pension fund, Valtion Eläkerahasto (VER), shares a lot of wisdom here. He is a finance professional and an academic working at the intersection of business and government.

The biggest takeaway is when you are a mature pension plan -- where retired members considerably outnumber younger active members and outflows outpace inflows by a wide margin -- then you simply cannot take on too much risk in private markets; it's irresponsible. 

His cutoff for an allocation to privates was 20% of total assets, a decision he made with confidence given the maturity of this pension plan. 

The decision had nothing to do with the state of private markets but everything to do with the fact that they can't afford to run short of funds to pay out pensions to retired members. 

He even says it's all about certainty of cash flows, stating this:

“When there’s uncertainty in terms of the cash flows . . . the size of the private portfolio cannot be increased aggressively,” he said, pointing to a forward return expectation near 5.5%, against outflows already running four to five percentage points a year. 

I don't know where he gets his "forward return expectation" for privates at 5.5% (seems low to me)  but if outflows are running at 5% a year, and if he's assumptions are right, then a 20% max allocation for privates sounds about right. 

I also agree with his decision to keep Chinese equities and fixed income deliberately low based on the economic, not political, arguments he puts forth.

Lastly, I agree with VER's private equity approach:

 On manager selection, Löyttyniemi credits VER’s edge to accumulated diligence rather than any single call. Re-upping with an existing manager was, in his words, “an easier decision” than backing a new one, since years of prior scrutiny had already resolved most of the uncertainty a first-time relationship carries. What his team weighed most heavily wasn’t short-term performance but succession — whether younger partners were stepping up as a manager’s founders aged out.

Too many dumb pension funds focus on short-term performance and not enough on succession. And the results are typically disastrous when you chase performance without understanding the underlying team.

Alright, quick comment tonight, still in summer mode.

Below, private markets have stalled since interest rates started to rise in 2022, even as public markets have climbed to new highs. But a period of sustained economic growth along with rising liquidity and AI-driven innovation could help private markets rebound, according to Goldman Sachs' Pete Lyon and Michael Brandmeyer. 

Despite longer private equity holding times and mixed performance from private credit funds, they remain cautiously optimistic, projecting that distributions will gradually return to 15%-20% and that deal activity could exceed its 2021 peak within two to three years.

No big surprise that Goldman sees a sustained recovery in private equity. Hope they're right. 

The Fair Labor Standards Act of 1938 (FLSA) set workplace norms that are still in use almost ninety years later. The FLSA established the 40-hour standard workweek and overtime protections for workers. It guaranteed pay at a rate of 1.5 times the standard hourly wage for work past the 40-hour mark. Overtime protections were designed as a safeguard for workers—to prevent employers from overworking employees and to require firms to pay workers fairly for their labor when they put in extra time on the job. By making long hours more expensive, the overtime premium incentivizes employers to hire more workers and spread the work around.

But as the country’s workforce has shifted over the nearly 90 years since the FLSA was enacted, the FLSA’s overtime rate has not.

Recently, the Double Wage for Overtime Act was introduced by Rep. Casar (D-Texas) in the House and by Sen. Gallego (D-Ariz.) in the Senate. The Act will strengthen overtime protections for more than 13 million workers by amending the overtime rate for the first time since 1938. It would raise overtime pay from 1.5 times a worker’s regular rate of pay to double the regular rate.

How would this affect pay, hours worked, and employment?

The potential to significantly increase workers’ earnings is notable. A worker making $25 an hour and working 10 hours overtime a week for a full year would gain $6,500 more in annual income, all else equal. But, as with any change to overtime policies, employers could respond to the new standard differently, based on the needs of their workplace. In particular, some workers who often work overtime may work fewer overtime hours, as employers adjust schedules and spread work to minimize having to pay the overtime premium. But, due to the double overtime rate, overall compensation for working people will still rise.

The Double Wage for Overtime Act also serves as a mechanism to narrow race and gender pay gaps by boosting pay in historically undercompensated, overtime-eligible sectors, where women and workers of color are disproportionately represented, due to the broad impacts of racism and sexism on labor market outcomes.

Finally, the bill offers a strong deterrent to employers who might otherwise overwork employees. Stronger overtime protections incentivize fairer and more reasonable scheduling, and act as a protection against unpredictably long hours. And, by incentivizing employers to spread hours out to employees who work less than 40 hours a week, stronger overtime protections are also likely to reduce the number of workers who are working part-time “involuntarily” (because they can’t get enough hours).

Any impact on employment is likely to be small, but positive. Some might argue, as they often do in opposing minimum wage increases, that requiring businesses to pay their employees more would reduce employment. But the overwhelming body of evidence on minimum wage increases shows that they raise wages without causing meaningful job losses.

Moreover, increasing the overtime premium differs from increasing the minimum wage in an important way. A higher minimum wage requires employers to raise the pay of all workers earning below the new minimum. By contrast, employers have considerable flexibility in responding to a higher overtime premium. Rather than paying the higher overtime rate, they could hire additional workers or offer more hours to employees who currently work part-time. In part because employers have these alternatives, any employment effect of increasing the overtime premium is likely to be positive.

How does this compare with “No tax on overtime”?

The legislation is far better for working people than Republicans’ “no tax on overtime” policy. Although a tax deduction may sound like a compelling way to help people who work overtime, it is a deeply flawed policy with very uneven benefits. It largely benefits middle-to-high-income earners, provides only modest tax savings for those workers who do qualify, leaves some workers worse off, and preserves financial gains for employers who overwork employees. Strengthening overtime standards—instead of offering gimmicky tax cuts—is the real way to deliver for working people.

How would this affect local economies and businesses?

As mentioned above, if this legislation were to take effect, businesses would have choices and flexibility as to how to comply. Firms may hire additional employees, which would increase employment in the overall economy. They may also choose to innovate and become more efficient in how they direct their employees’ use of time. Reducing excessive numbers of work hours may also improve worker health, concentration, and lead to fewer fatigue-related accidents, which would increase productivity in the workplace, benefiting workers and employers alike.

Though employers can respond to an increase in overtime protections in many ways, the increase will raise labor costs, as it puts money in workers’ pockets. Importantly, this is unlikely to translate into higher prices for consumers. Research on minimum wage increases, which raise labor costs, finds little-to-no inflationary impact from minimum wage increases. And minimum wage increases are a much greater shock to labor costs than an increase in the overtime premium. Increases in the minimum wage affect all hours worked for impacted workers, while the higher overtime rate will only affect hours worked past 40 in a week, a small fraction of total hours worked.

In fact, the Double Wage for Overtime Act will boost affordability by helping ensure that workers actually earn enough in wages to cover the cost of living with dignity and security. The potential income increase for working-class households would have a positive effect on local businesses as well. When workers have more money in their pockets, they can put that money back into their communities.

In short, increasing the overtime wage premium would strengthen one of the nation’s foundational labor standards, putting more money in workers’ pockets while encouraging employers to create jobs, instead of relying on excessive overtime. The Double Wage for Overtime Act is a straightforward opportunity for lawmakers to tackle continued affordability concerns. It is a long overdue modernization of overtime pay that will benefit millions.