Sovereign Wealth Fund Institute

The Alberta Investment Management Corporation (AIMCo) has acquired a 50% interest in Inversiones Grupo Saesa Limitada (Grupo SAESA) from Morgan Stanley Infrastructure Partners. Grupo SAESA is a regulated electricity transmission and distribution company in Chile. It is the second largest electricity distributor in Chile and delivers electricity to 16% of Chile’s population.  The other 50% owner is the Ontario Teachers’ Pension Plan.

AIMCo is not new to Chile and is attracted to their established and stable investment regulatory environment. Chile provides excellent opportunities in core infrastructure investments for sovereign investors due to their support of foreign capital investment. AIMCo has already invested $850 million in Autopista Central, a six-lane toll road in Chile.

Market Share by 2010 Sales (Chile)

• Chilectra 44%
• CGE 29%
• Otros 11%
• Chilquinta 8%
• Grupo SAESA 8%

When properly implemented, leverage can be a financial tool to enhance total return. A number of sovereign wealth funds employ the use of leverage in a variety of investment strategies. AIMCo (Alberta Investment Management Corp), which manages a number of governmental funds including the Alberta Heritage Fund would like more control on the amount of money it can borrow to make investments. AIMCo also manages public pension money and the Government of Alberta limits the amount of leverage pension funds can utilize in investing. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

Owned by the Province of Alberta, the Alberta Investment Management Corporation (AIMCo) manages investments for the Alberta Heritage Fund, public pensions, and other governmental funds.  They have been an active investor in several prolific direct investing strategies.  In the next twelve months, the crown corporation could spend as much as C$700 million (US$ 720 million) in private equity type purchases.  These would mostly likely be mid-market type transactions.  AIMCo has spent a tremendous amount of internal resources and time beefing up their private equity / direct investment team.[Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

To read the background paper written by Brian Gibson for the SWF Summit 2011, click here

Leo de Bever

Apparently, Alberta Investment Management Corporation, an investment management organization that helps invests Alberta’s Heritage Fund was approached by a sovereign wealth fund for a deal to rival the $39 billion offer from BHP Billiton.  Potash has rejected the BHP Billiton offer.  It will be interesting to see who ends up backing Potash in the long run, as a number of suitors are being worked on behind the scenes.

“We can’t right now make the economics work,” The head of AIMCo, Leo de Bever told journalists in Calgary. “If it were to work it would take a consortium of pension funds if you were to do it, but the question is, is that really appropriate for those pension funds.”