The Sovereign Wealth Fund Institute asked Mr. Pearce how his views on asset management have evolved during the 25 years the bcIMC has ballooned from a C$ 15.9 billion fund to just over C$ 102 billion.
Mr. Pearce responded first with a correction. “Actually, that 15.9 number we’ve been using for the press isn’t quite right,” he said. “The number was closer to C$ 9 billion.” He then continued by detailing the fund’s conservative roots. “When we started in ’88 we were invested in Canadian bonds and the Canadian money market exclusively. Starting quite early, we worked on getting legislation to start allocating to equities and real estate. That began in 1989, and we implemented it in 1990.”
Another major change, he noted, was transitioning out of purely Canadian investments and developing a more global portfolio. Whereas the fund started at 100% Canadian investments, it has moved to 60% Canadian and 40% ex-Canada with a 50/50 split on the horizon.
Mr. Pearce sees a challenging investment environment ahead, noting that the “tailwinds of declining interest rates since 1981” have helped bcIMC best its benchmark. He sees the low return environment compounded with an inevitable rise in interest rates as “great possible headwinds.”
Another challenge Mr. Pearce sees isn’t directly linked to investments, per se, but policy and the general public’s opinion. He clarified by saying, “The general public doesn’t really understand the value of long-term capital. They get caught up in quarterly returns when we really should be looking at 10, 15, 20 year investment horizons [for public investors].” A number of the largest sovereign wealth funds report only on a 5, 10, and 20-year basis publicly.
He also mentioned special interest groups leading cries against the cost of defined benefit plans. He laments that there isn’t enough community outreach to explain that the investments these funds make in Canadian businesses directly helps the people so opposed to their dealings. “Some of the businesses we support, like TimberWest [a privately managed forest landowner], pay wages and support communities; when the employees retire, they’ll also have a pension benefit waiting for them.”[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
Robert Priestley who was a member of Australia’s Future Fund Board of Guardians has resigned. He is the former the Chief Executive Officer of J.P. Morgan Australia and New Zealand (left in May 2017). He also resigned from his director role at ASX Limited. Priestley remains the non-executive chairman of J.P. Morgan Australia and New Zealand.
In a released statement by Priestley, he said, “Given my decision to step aside from the ASX board, I think it is also appropriate that I step aside from the Future Fund board of guardians.”
Australia and New Zealand Banking Group Ltd (ANZ) is in hot water with Australian regulators, facing criminal cartel charges on an ill-fated institutional placement. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
State Street Launches Real Assets Fund Services Group
State Street Corporation formed a real assets fund services group in anticipation of further growth in world of global infrastructure investing. This newly-formed group will leverage the company’s existing real estate platform.
Cadillac Fairview Unveils Massive Building Project – Slated New HQ for OTPP
Cadillac Fairview is a real estate unit of the Ontario Teachers’ Pension Plan (OTPP). Cadillac Fairview, in a partnership with the Investment Management Corporation of Ontario (IMCO), revealed the construction of a new 46-storey office tower at 160 Front Street West, on the northeast corner of Front Street and Simcoe Street in downtown Toronto. This new building will be the headquarters of OTPP at 160 Front Street. This C$ 800 million development will be one city block from Union Station.
James Edwards Head to BMO Global
James Edwards was hired by BMO Global Asset Management to be director of U.K. sales. Previously, Edwards was a Fixed Income Product Specialist at BlackRock.
Peter Diamond Exits Deutsche Bank
Peter Diamond is exiting as Head of SSA Origination and Structuring at Deutsche Bank – a position he had in London.
Hideharu Ichii Joins AMP Capital
Hideharu Ichii left APG Asset Management Asia to join AMP Capital, effective July 2, 2018. Ichii took the position as a Portfolio Manager on AMP Capital’s global listed equity team in Hong Kong. Ichii was a Senior Portfolio Manager in listed real estate Asia-Pacific region at APG.
Keppel Corporation Sells Stake in Development
Shenyang SUNAC Xinxing Enterprise Management acquired a stake for US$ 43 million in the Keppel Township Development (Shenyang) Co. Ltd. from Keppel Corporation.
The island country of Mauritius plans to offer foreigners a chance to obtain country citizenship in exchange for a non-refundable contribution of US$ 1 million to the national sovereign wealth fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
3 weeks ago
HQ Capital Raises Money for U.S. Real Estate
3 weeks ago
Russia-Japan Investment Fund to Back Wood Pellet Production in Russia
3 weeks ago
Is Franklin Templeton the Private IMF for Argentina?
4 weeks ago
Oman Infrastructure Investment Fund Near Creation
3 weeks ago
Gulf Japan Food Fund Buys Majority Stake in Country Hill International
1 week ago
CPPIB to Become First Major Pension to Issue Green Bonds
3 weeks ago
Red Sea Project Gets Former Canary Wharf Veteran
3 weeks ago
SWFI First Read, May 29, 2018