Coverage: Jean-Michel Neault
Established: 1976
US$ Billion: 13.8
Origin: Oil
Firm Investment Style: Index
Entity Structure: Fund
Transparency Rating: 9
Summary:
The Alberta Heritage Savings Trust Fund was created in 1976 by the Alberta Heritage Savings Trust Fund Act. Initially, the fund received 30% of Alberta's non-renewable resource royalties which comes from its vast oil wealth.
This fund was created with several goals in mind.
 Investment for Future Generations
Strengthen and diversify the economy
Improve quality of life
A Rainy Day Fund
During the early 1980s, the fund made loans to other provincial governments in Canada. Later the fund's money was used for capital infrastructure projects. After 1987 resource royalty revenue was no longer added to the fund.
The fund was originally designed for economic development, but now primarily it is a long-term savings and investment fund.
Portfolio Management
Currently being managed by the newly established Alberta Investment Management Co. (AIMco) in 2008. AIMCo was formerly part of the Ministry of Finance of Alberta before transforming into a provincial crown corporation in 2008 that is now providing investment management to a variety of public sectors.
Strategies and Objectives:
As of 2007, the fund is invested in stocks, bonds, real estate and alternative investments, with the aim of generating revenue for the province.
Fund Mission Statement
"To provide prudent stewardship of the savings from Alberta's non-renewable resources by providing the greatest financial returns on those savings for current and future generations of Albertans." *
News and Updates
4/22/2008
Alberta fund buys stake in Precision
Press release states, "Precision Drilling Trust (the Trust) and Precision Drilling Corporation (Precision) announced today a series of financing transactions to raise up to approximately C$380 million which will be used to strengthen the Trust’s balance sheet by refinancing and restructuring the debt incurred in the acquisition of Grey Wolf, Inc. that was completed in December of 2008." Precision Drilling Corporation announced a financial deal yesterday that will see Alberta’s provincial investment arm Alberta Investment Management Corporation (AIMCo) take a larger stake in the company.
read more: Precision Drilling - Press Release
11/19/2008
The report, titled Preserving Prosperity: Challenging Alberta to Save, makes 17 recommendations to government, including beefing up financial assets in the Heritage Fund to $100 billion by 2030
According to the article,"Other key recommendations in the document include:
Implementing strong legislation to reinforce Alberta's commitment to savings
Consolidating endowments in the Heritage Fund that would provide resources to various foundations
Setting clear criteria for disbursing income from the Heritage Fund
Providing stable and predictable funding to existing foundations for medical research, science and technology, and the heritage scholarship programs
Changing the official name of the Alberta Heritage Savings Trust Fund to the Alberta Heritage Fund
Mintz, the head of the committee, noted that if government saved even five per cent of its total revenues, it could sock away $2 billion annually into savings."
read more: Calgary Herald
10/14/2008
Falling stocks slice $1B from Alberta's heritage savings fund
Falling stock prices have sliced roughly $1 billion from the value of Alberta's rainy-day savings account, the Heritage Savings Trust Fund. Finance Minister Iris Evans told the legislature Tuesday that the value of the Heritage Fund has been reduced to $16 billion since June, a drop of roughly six per cent. But she's downplaying the loss.
"That's a paper loss, it does not translate into an immediate loss," Evans said in an interview after commenting publicly on the Heritage Fund losses for the first time.
"That's the worst-case scenario."
Economist Mike Percy said with declines of 30 to 35 per cent in both the Toronto and Dow stock exchanges, it's not surprising that Alberta's Heritage Fund is also showing a considerable paper loss.
read more: Canadian Press
4/29/2008
Savings strategy proposed to avert deficits, tax hikes
According to the Calgary Herald, "The head of a committee advising the province on how to invest its resource riches says the government must "impose" on itself a long-term savings plan rather than continue ad-hoc deposits into the provincial vault.
Today, the Heritage Fund's value stands around $16.4 billion, but is still worth less than it was in the 1980s once inflation is factored in. All told, the province has more than $30 billion in direct savings stashed away in various funds and investments."
read more: Calgary Herald
Website
Alberta Heritage Fund Website
1. All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their holdings, from other publicly available sources.
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