The Globe and Mail reported on Tuesday evening that sources within AIMCo say the manager lost more than $ 4 billion as a result of a volatility-based investment strategy.
AIMCo has a portfolio of approximately $ 119 billion, which represents hundreds of thousands of Albertan pensions and accounts like the province’s Heritage Trust Trust Fund.
Dénes Németh, director of corporate communications at AIMCo, said the pension manager only comments on the performance of active investment strategies to his clients.
“The level of volatility that the markets experienced in March 2020, the result of the COVID-19 pandemic, during which volatility increased faster and more steadily than at any other time in history, is exceptional, “he said.
“AIMCo recognizes that it is not immune to the challenges, however unique, that institutional investors around the world have experienced. “
AIMCo’s portfolio is broadly diversified, he said, adding that it is well positioned for the long term.
Németh said that AIMCo had been in frequent contact with investors to discuss the impact on portfolios of current market conditions.
Teachers’ pensions not yet affected
In the fall of 2019, public sector workers voiced concerns about the future of their pension plans after the Alberta government introduced legislation to lock in the pension assets of all public sector plans under the management of AIMCo.
Protests erupted as it was announced that approximately $ 18 billion in assets from the Alberta Teachers ‘Retirement Fund (ATRF) would be transferred to AIMCo, and new legislation prohibited any public sector plan from withdrawing. This transition is not yet complete.
In February of this year, the Alberta Federation of Labor expressed concern that the pension manager was being used to support the struggling fossil fuel industry at a time when many large investment funds have moved away from the area.
Matt Wolf, the Prime Minister’s executive director of issues management, tweeted Tuesday evening that AIMCo operates independently of government.
“From what I understand, the” volatility-based investment program “started long before the UCP (not that it was politically directed anyway),” he wrote.
AIMCo announced 2019 results earlier this month and said its net investment income of $ 11.5 billion did not meet client expectations for the year as the return was 0.5 % lower than its benchmark.
He also warned of the difficult times ahead.
“While 2019 has its own challenges, 2020 is unprecedented with the global economic impact of COVID-19 and a war of oil prices leading to a significant re-invoicing of almost all asset values and entering a period of sudden and unprecedented volatility ”. 8 press release read.
“Our team is taking decisive action to protect our clients’ liquidity and assets in the short and medium term, while identifying the longer-term investment opportunities that will arise from these difficult market conditions. CEO Kevin Uebelein said in the statement.
“We know the impact on their portfolios in these times of market uncertainty will be significant, and we are committed to being accountable and ensuring full transparency for our customers as we navigate together under these conditions. “