Canada’s Alberta Investment Management Corporation (AIMCo) is planning a push into the Middle East with a potential new office in Abu Dhabi.
CEO Evan Siddall told Bloomberg, “We are right now far too exposed to Canada, the US and Western Europe, which are going to be lower growth economies and therefore lower returns. For someone like us over the long term, who can diversify the risk associated with that, it makes sense to be in emerging markets.”
He added that the UAE was attracted due to its dollar-pegged currency and investor-friendly regulations, but AIMCo was looking beyond the Middle East to establish global expansion. It could potentially tie up with Abu Dhabi’s US$1.6 trillion sovereign investor community that includes ADIA, Mubadala, ADQ and the Emirates Investment Authority.
The investment manager of 31 pension, endowment and government funds, AIMCo reported AUM of C$149.2 billion (US$107.6 billion) at end-September 2022, including C$18.8 billion of assets transferred from the Alberta Health Services, Alberta Teachers’ Retirement Fund, and Workers’ Compensation Board – Alberta in 2021. Its year-to-date return was -6.9%, which was 0.6% better than its benchmark. In the 2013-22 period, on average AIMCo beat its benchmark by 1.6%.
According to AIMCo’s latest annual report, the fund has very little emerging market exposure with infrastructure standing out as the only asset class with significant allocations to South America and Asia (including developed markets such as Japan and South Korea).
Choosing Abu Dhabi for a regional office is rare in the sovereign investment universe. Aside from the emirate’s own sovereign funds, only the Armenia National Interest Fund (ANIF) has a representative office in Abu Dhabi.
Last July, the Alberta investment manager announced it had chosen Singapore over Hong Kong for its first office in Asia as it plots an international expansion of its private equity group. Peter Teti, head of private equity and international, told Bloomberg, that AIMCo “will have a pan-Asian strategy as opposed to just, for example, a Chinese strategy. Singapore seems to be a potentially logical place to have a base through which you can invest across Asia and that will include Australia, New Zealand as well.”
The fund manager is seeking to use Singapore to advance its private equity strategy in Asia, including Australia and New Zealand. At present, just 2% of its private portfolio and 7% of its infrastructure investment is in Asian markets. With stability and economic diversification, Singapore caught up with Hong Kong amid unrest and increased regulatory pressure from Beijing.
Other state-owned investors establishing new offices in Singapore since 2020 are Ontario Teachers (OTPP) and Qatar Investment Authority (QIA).