In 2020, the impact of COVID-19 was felt among investment managers across the world and AIMCo was no different, incurring large losses. Since then, in an attempt to pursue stability and sustainability, the Alberta-based organization has appointed a new CISO, CRO, CFO, and on July 1 this year, a new CEO. As a result of some of these efforts, the fund enhanced its result in Global SWF’s GSR Scoreboard, from 84% in 2020, to 92% in 2021. We had the great pleasure of hearing more from Mr. Mark Prefontaine, AIMCo’s Chief Client & Stakeholder Relations Officer.
[GSWF] Analysts tend to put all Canadian Funds into the same bucket, but the reality is that they are all very different. How do you define yourselves at AIMCo?
[AIMCo] Some of the Canadian funds are vertically integrated, including OMERS and OTPP, and some others manage multi-clients’ capital, including CDPQ, BCI and ourselves. But, we are unique in the sense of the distinctiveness of our 32 different clients, which have very different liability profiles, from pension plans to endowments funds and other government funds.
[GSWF] The Heritage Savings Trust is 15% of AIMCo’s balance sheet – what are the prospects for the oil fund?
[AIMCo] That really depends on the Government of Alberta and on their deposits and withdrawals, governed by Statute. That said, we are working closely alongside Alberta Treasury Board & Finance and with the AHSTF regarding their new asset allocation.
[GSWF] Have the pension plans you manage been able to maintain a fully funded status throughout the pandemic?
[AIMCo] LAPP, which is our biggest depositor, has managed quite well throughout the pandemic and maintained fully-funded status. The other retirement funds are also well funded and doing well thanks to the rebound of the markets, among other things..
[GSWF] Can we talk about AIMCO’s 2020 return (2.5%), which was attributed to losses related to VOLTS and RE?
[AIMCo] Like many other businesses, AIMCo suffered as a result of the COVID-19 Pandemic. Some of its performance was related to external, but our previous strategy also contributed to the unsatisfactory performance. That being said, recent changes at AIMCo have propelled us in the right direction and our 2021 performance so far has been much stronger for a number of reasons. We’re on track to surpass our benchmark by focusing on clients, adjusting our strategy, and because of macro-economic factors like the openness of the economy and market returns. We continue to be mindful of managing market uncertainty and risk within our clients’ portfolios.
[GSWF] AIMCo has halved its weight in bonds to the benefit of stocks and alternatives in the past 12 years – Why?
[AIMCo] Those changes are an effect of our clients’ preferences and asset allocation. We have seen the move into private markets as an opportunity due to low interest rates, and we believe there will continue to be interest in those asset classes.
[GSWF] Almost half of AIMCO’s portfolio sits in Canada – how much of it is in Alberta? How did Covid-19 affect it?
[AIMCo] Around 7-8% of our portfolio sits within Alberta. Given Alberta’s ties to energy, historically, the province has been a very good place to invest. Last year was rough for energy, but there are strong signs of potential in both the conventional and low-carbon industries going forward. In our real estate portfolio, Alberta-based office and retail assets have suffered as a result of COVID.
[GSWF] Why is your weight in Pipelines & Midstream still higher than that in Renewable Energy? How will this change?
[AIMCo] We continually seek out the best investment opportunities for our clients, including in renewable energy. Right now, the price outlook for oil is improving. How our portfolio allocation changes depends on where we find the best opportunities, and we are now seeing increasing opportunities coming about as a result of the energy transition. As we expand our infrastructure efforts, we believe both the Non-Renewable and the Renewable Energy sectors will present good investment opportunities for us in the future.
[GSWF] Do you embrace the idea of co-investments with fellow Sovereign Investors?
[AIMCo] We are an experienced global investment manager and have already partnered with KIA (London City Airport) and NPS (Coastal GasLink). We see this continuing as we continue to expand to Asia and other markets in the best interest for our clients.
[GSWF] 90% of AIMCo’s staff sit in Alberta. Will you add offices beyond London and Luxembourg?
[AIMCo] Pre-pandemic my response would have been Asia as we see a lot of growth there, and we have already discussed that option with our clients. However, our focus is now on getting all our staff back to our existing offices in a safe manner.