Universities Academic Pension Plan, Edmonton, will conduct a search for one or more public equity managers before the end of the year, said Dave Schnore, executive director.
The C$5.8 billion ($4.5 billion) pension fund terminated Alberta Investment Management Co. as its public equities manager earlier this year due to concerns with AIMCo's management, Mr. Schnore said.
The well-publicized C$2.1 billion in losses from a bet against market volatility that AIMCo suffered in the spring of 2020 was not a factor in the removal of the manager, Mr. Schnore said, but the losses "sort of unveiled a lot of blemishes" in AIMCo's public equities management.
The Universities Academic Pension Plan is one of the few plans that has the authority to remove AIMCo as a manager of any of its assets, Mr. Schnore said.
As of Dec. 31, AIMCo managed a total of C$2.66 billion in active public equities for UAPP, according to the pension fund's most recent annual report. Of that total, C$1.55 billion was managed in global equities, C$689 million in Canadian equities and C$422 million in emerging markets equities.
Mr. Schnore said the assets are currently parked in index funds managed by State Street Global Advisors. AIMCo still manages alternative investments, private mortgages, real return bonds and real return fixed-income portfolios for the pension fund.
Investment consultant Aon will conduct the asset-liability study and following the findings of the study, UAPP will determine how to go forward with a manager search. Mr. Schnore said the potential introduction of new asset classes may necessitate the hiring of multiple managers. UAPP is not required to issue open requests for proposals, he added.
As of Dec. 31, AIMCo, the manager of pension, endowment and government funds in Alberta, had about C$119 billion in assets under management.
"AIMCo respects UAPP's decision and are proud to continue to serve their other investment management needs, as we have since before AIMCo was established," AIMCo spokesman Denes Nemeth said. "AIMCo worked closely with UAPP to ensure an efficient transfer of assets that would in no way impair the performance of the public equities portfolio for AIMCo's other clients."
