Deadline Extension Under Consideration
Given the impact of COVID-19 and the lack of a tax policy on extending the April 30 deadline in respect of periods of reduced services that were completed in 2019, the Department of Finance will recommend to the minister of finance that the deadline be extended. In a letter to the Association of Canadian Pension Management (ACPM), it says this is in response to discussions that some ACPM members have had with officials regarding potential amendments to the income tax regulations to facilitate the effective administration of registered pension plans (RPPs) during the pandemic. Currently, where a member of a defined benefit RPP has completed a period of reduced services in 2019, the regulations permit the participating employer and the member to make a decision by April 30 to include the period of reduced services as pensionable service on a current service basis and to report amended pension adjustments on T4 slips (and not by way of the past service pension adjustment rules). Similarly, where a member of a money purchase RPP has completed a period of reduced services in 2019, the regulations permit the participating employer and the member to make retroactive contributions by April 30 in respect of the period of reduced services. Plan administrators have noted that, in the current stay-at-home environment, it is often not possible by April 30 for an RPP administrator to communicate with plan members who have completed a period of reduced services during 2019 and to make the decisions about pensionable service, or catch-up contributions, in respect of the period of reduced services. However, it says “we cannot offer any assurance that the minister of finance or governor in council will agree with our recommendations.”
Employers Face Logistical Challenges To Reopen
As Canadian employers anxiously await the ‘re-opening’ of the local economy, they face numerous legal and logistical challenges, says a Borden Ladner Gervais ‘Newsletter.’ Health and safety, privacy and human rights issues will abound, and further uncharted waters lie ahead. Employers emerging from this ‘lockdown’ should, therefore, plan ahead and, as much as possible, be ready to tackle these issues out of the gate. Among the issues and challenges employers need to keep in mind are compliance with employee health and safety and public health requirements. Crafted return-to-work plan and policy should take into account several factors, including zero-tolerance policy and non-compliance; reporting policy violations; business needs, including client or third party-facing activities; and scheduling to respect physical distancing requirements (modifying shifts, start times, teams, alternating office presence). Another challenge is testing and other screening methods. Such testing and how it may be carried out (if at all) raise a variety of privacy and human rights issues, requiring careful examination and a balancing of the rights and obligations of both employer and employees. Such testing is unlikely to be a complete solution and will, therefore, need to be coupled with questionnaires and screening protocols as part of a broader process to be established in consultation with health professionals and legal counsel: Employers who proceed with such testing will inevitably face refusals or questions on the part of employees or their unions. Employers should be proactive and strategic in how they roll out such measures and careful and consistent in how they deal with questions and/or refusals.
Canada Entered Recession In First Quarter
Preliminary data suggests Canada entered a recession in the first quarter of 2020 with a February peak, says the C.D. Howe Institute’s Business Cycle Council. The council defines a recession as a pronounced, persistent, and pervasive decline in aggregate economic activity. It looked at Statistics Canada’s estimate data that shows a nine per cent drop in March GDP resulting in a quarterly drop of 2.6 per cent – the largest one quarter drop in GDP on record. The magnitude of the contraction makes it extremely unlikely that any future adjustments will overturn the conclusion of a major drop in economic activity in the first quarter. On top of that, labour force survey data indicate a 1.5 per cent drop in total employment in the first quarter, with a 5.3 per cent drop in March alone. Further GDP revisions will occur which may impact the peak month, but are extremely unlikely to be significant enough to alter the recession call for the first quarter of 2020, says the council.
Northern Trust Enhances ESG Analytics
Northern Trust has enhanced its analytical capabilities to provide pension funds and other global institutional investors with heightened insights and transparency over their environmental, social, and governance (ESG) risk exposures. The ‘ESG Analytics Summary’ provides investors with periodic snapshot analysis across their equity and corporate bond portfolios – setting out investment ‘scores’ against a range of ESG factors, United Nation’s (UN) Global Compact principles, and business activity flags. This analysis enables investors to track changes in a fund’s ESG profile over time, compare results on an absolute and relative basis, and compare asset managers’ scores against each other. Institutions can use the resulting data to support their governance and oversight objectives – for example, providing evidence of their ESG scores and exposures and supporting adherence to regulatory requirements and global standards. It can be used to facilitate discussions with their investment managers and manage potential stakeholder concerns and reputational risk.
Blue Cross Sponsors Stronger Minds
To support mental well-being through the COVID-19 crisis, Blue Cross has joined as a sponsor of ‘Stronger Minds by BEACON’ – a free digital program available for all Canadians. This resource is a supplement to the suite of health and wellness offerings provided by each Blue Cross plan, including employee assistance programs. Topics covered continuously evolve based on participants’ requests and include overcoming worry, isolation, and parenting. Stronger Minds will be offered indefinitely, in recognition this crisis has an uncertain timeline.
Frontier Acquisition Completed
Searchlight Capital Partners, L.P., a global private investment firm, has completed the acquisition of the northwest operations and assets of Frontier Communications in partnership with WaveDivision Capital, LLC; the Public Sector Pension Investment Board; the British Columbia Investment Management Corporation; and the Canada Pension Plan Investment Board. The investment is expected to benefit the approximately 500,000 current residential and business internet, phone, and TV subscribers across four states in the Northwest: Washington; Oregon; Idaho; and Montana. The new company will operate as Ziply Fiber.
Versett Earns Mental Health Award
Versett, a consulting firm specialized in digital transformation, has received a Canadian Alliance on Mental Illness and Mental Health (CAMIMH) ‘2020 Champion of Mental Health Award’ for workplace mental health. Vinciane de Pape is the company’s director of learning and culture at the Calgary, AB-based firm. She knows firsthand how workplace environments can help or hinder mental health as she lives with depression and anxiety. She has transitioned in her role from a product design leader to a director position responsible for providing her team with the support they need to produce high-quality work and empowering her organization’s people to set healthy boundaries so they can perform at their best. Each year during ‘Mental Health Week,’ CAMIMH recognizes seven Canadians and organizations whose work has advanced the mental health agenda across the country.
Proteau Has New Role
Media Reports Overstated
Media reporting has dramatically overstated the extent of the losses suffered by AIMCo with its volatility-related investment strategy, says Kevin Uebelein, its AIMCo chief executive officer. In a letter on its website, he says this occurred because the losses that quickly accrued as market volatility dramatically increased and remained elevated were not able to be offset by the gains that would normally be realized as volatility returned to more typical levels. Markets behaved in a manner never-before-seen and the result was a very unfortunate loss of 43 per cent on the low-end and 100 per cent on the high-end. Realized and unrealized losses combined to date are approximately $2.1 billion of the $118.8 billion of assets it manages on behalf of its clients. While that figure will likely change, it has actively taken a number of steps to limit the eventual loss. Actual losses will not be finalized until the strategy is completely wound down, which should occur by mid-June. “Anytime you are counting in the billions, it is a big number worthy of attention, and I certainly would never want to experience such an outcome from a strategy. When record-setting market movements occur ‒ recall the TSX suffered its biggest one-day plunge in eight decades ‒ new lessons will inevitably emerge, as they clearly will here at AIMCo,” he says. “Others across the investment community will be doing the same, I am sure, as the final impact of this global recession is measured.”
COVID Could Reduce Healthcare Costs
COVID-19 could reduce employer healthcare costs by as much as four per cent in 2020 as medical care for non-infected patients has declined during the pandemic, says a Willis Towers Watson analysis of large, self-funded employers. The analysis updates a similar study conducted last month that projected employer costs could rise by as much as seven per cent due to COVID-19-related costs. “With treatment for COVID-19 top of mind, people have been putting off non-emergency medical care, including routine office visits and elective procedures at hospitals,” says Trevis Parson, its chief actuary. “Given this reduction in use of medical services, we expect cost reductions due to care deferral to more than offset projected cost increases associated with COVID-19 infections.” The updated study utilizes recent estimates of infection levels in the U.S. It shows at a one per cent infection level (e.g., rural areas) employer costs could decline between one per cent and four per cent, depending on how much medical care is deferred. At a 15 per cent infection level (e.g., metro areas), employer costs could rise or fall by roughly one per cent depending on care deferral. In the most severe scenario ‒ a 20 per cent infection level ‒ costs could rise between one per cent and three per cent, still below projections from the earlier analysis.
PLPs Funded Under ODB
The Ontario government plans to allow private label products (PLPs) to be funded under the Ontario Drug Benefit (ODB) program. It would also allow PLPs to be designated as interchangeable products on the ODB formulary, says an Eckler ‘GroupNews.’ As well, in response to concerns by pharmaceutical manufacturers and retailers about the potential for disruptions in the supply chain, and potential drug shortages as a result of COVID-19, Ontario will amend the start date of approved regulatory changes to allow PLPs to be designated as interchangeable products on the ODB formulary and allow funding through the ODB program before July 1. The current proposal, if approved, would change the effective date of the regulatory changes for PLPs from July 1 to April 1. Making PLPs eligible for public funding under the ODB program earlier than anticipated will make it easier for Ontario pharmacies to sell PLPs to private plan and cash paying clients sooner, which could help offset the potential shortage of certain drug products. It is not expected to increase operating or administrative costs, but it could require plan administrators to review their current policies on PLPs.
Liquid Alts At Similar Levels
The Canadian Liquid Alts industry is about $7.25 billion now, similar to the ($7.3 billion number seen at the end of the year, says the CAASA Canadian Association of Alternative Strategies & Assets. While a bit shy of the $10 billion that was anticipated by now (May 2019 was $2.4 billion, $5.3 billion in Sept)ember, but June’s $20 billion target could still be reached. As a comparison, the traditional mutual fund industry had about one per cent in redemption in March (a record outflow), much of that from bond and balanced funds. It believes that liquid alternatives have again proven their mettle in the “crucible of a crisis.”
League Expands HBX Functionality
League Inc. has expanded the functionality of its health benefits experience platform (HBX) to better support enterprise employers in a post-COVID world. The new capabilities enable data-driven workforce decisions such as pandemic readiness and management policies, risk management strategies, behavioural insights, cost forecasting and mitigation, and return to work plans. Its data analytics addresses these challenges by combining anonymized population health history, real-time physical and mental health indicators, and location-based public health data. These predictive tools enable data-driven workforce decisions at the regional site level and individual level. The platform provides a single access hub for employees to engage with their health, lifestyle, and benefit programs. With its workforce health data analytics capabilities, the platform delivers millions of data points in aggregate to employers, becoming a real-time system of record for population health.
Netskope Gets CPPIB Support
Demonstrating its continuing worldwide momentum and expansion, Netskope, a security cloud, has announced new technology investments and customers in Canada. The company has opened data centres in Montreal, QC, and Vancouver, BC, bringing the number of Canadians being protected by its security cloud to five million. It is supported by participation in its Series-G funding round by the Canada Pension Plan Investment Board (CPPIB) and the Public Sector Pension Investment Board (PSP Investments). Its security cloud provides visibility and real-time data and threat protection when accessing cloud services, websites, and private apps from anywhere, on any device.
Rana Joins RiskFirst
Owais Rana has joined RiskFirst. He has been appointed to enhance and accelerate its business development across North America. He will be charged with expanding the footprint of its two core products: PFaroe DB, used by pension plans and consultants; and PFaroe, Attribution, designed for investment managers. He previously worked at asset management firm, Conning, where he was head of its insurance and pensions LDI solutions groups.
COVID Impacts Benefits
While at this time it is difficult to predict the full impact of COVID-19 business closures and social distancing on benefit plans, early indications do suggest some significant impact in the short term, says an Eckler ‘GroupNews.’ The impact on benefit plans will depend on the length of time the virus continues to spread within communities as well as how long government-mandated social distancing rules apply and on when certain services become available again. Given that plan members are unable to access a significant number of routine healthcare and dental services, it anticipates a decrease in plan costs in 2020 for most non-drug health and dental expenditures. While some paramedical practitioners offer virtual services, others are closed temporarily, and dental offices are shuttered except for emergency services. While the current 30-day dispensing limit on drugs and other medical supplies has generally resulted in increased dispensing fees, the overall impact on healthcare plans is expected to be a net decrease in claims. Overall, while there is some good news with respect to benefits plan costs as a result of reduced health and dental costs, this could be offset by increased disability costs for 2020 and beyond, and potential investment losses. When the pandemic is over, a ‘new normal’ will emerge and actuaries will be able to begin the process of studying the empirical implications on the design and pricing of benefit plans.
Precious Metal Response Atypical
Since the beginning of the coronavirus pandemic, precious metal funds have not responded in typical safe-haven fashion, says Cerulli Associates. Historically, precious metals have appealed to investors seeking to diversify from asset classes with high correlations. These commodities have also served as a store of currency. However, research from finds that although the price of gold soared in 2019 on the back of geopolitical risks, the coronavirus crisis has been less favourable for precious metal equities and prices. “It would be understandable to assume that the pandemic, its impact on financial markets, and the countermeasures taken by central banks would send commodity prices soaring again, but this time, there is more to consider,” says Fabrizio Zumbo, associate director, European asset management research, at Cerulli. Asset prices rise only when there are enough investors with liquid capital to buy the assets. With the immediate liquidity crisis sparked by the pandemic now resolved, buying should resume. However, the actions taken by central banks to ease the liquidity crisis ‒ and broader economic crisis ‒ may have neutralized some of the buying power of dollars, euros, and sterling.
Delta Postpones Contributions
Delta Air Lines Inc. will make no voluntary contributions to its pension plans in 2020 because of the impact of the COVID-19 pandemic. In a February 10-K filing, it said it planned to make $500 million in voluntary contributions this year. It already did not have any minimum funding requirements for the year. However, in a filing last week with the SEC, it says the decision to delay the planned $500 million in voluntary contributions comes as part of a series of actions the airline has undertaken to increase liquidity and strengthen its financial position. It contributed $1.02 billion and $523 million, respectively, to the plans in 2019 and 2018. As of December 31, the company’s defined benefit plan assets totaled $15.845 billion, while projected benefit obligations totaled $21.199, for a funding ratio of 74.7 per cent, up from 67.9 per cent a year earlier.
Investment Returns In U.S. Dip
Investment returns were down significantly for U.S. institutional plan sponsors in the first quarter of 2020 as a result of the coronavirus global pandemic effect on financial markets. The median plan in the Northern Trust Universe finished with a loss of 11.6 per cent for the three months ending March 31, 2020. “Poor first quarter performance amid historic volatility in the U.S. and international equity markets drove institutional plan returns for the quarter,” says Mark Bovier, regional head of investment risk and analytical services at Northern Trust. “U.S. equity programs, the largest allocation in most plans in the Northern Trust Universe, had a median return of -22.1 per cent in the quarter, while the median return for international equity programs was -22.9 per cent.” Meanwhile the U.S. fixed income program universe median return was 0.3 per cent for the quarter. Bond prices rose during the quarter, pushing down yields. Of the three institutional segments tracked corporate ERISA pension plans performed the best with reported a median return of -8.1 per cent, while public funds had a median return of -12.6 per cent.
Responsible Investment Pushed Into Mainstream
Economic and social upheaval plus the collapse of oil prices have pushed responsible and impactful investing further into mainstream finance, says Nigel Green, the chief executive and founder of deVere Group. The environmental, social, and governance (ESG) investing phenomenon has been dramatically and irreversibly accelerated by the current situation. “Even before the start of the Covid-19 pandemic, ESG investments often outperformed the market and had lower volatility over the long-run,” he says. “What is perhaps more impressive is that those investments with robust ESG credentials are still typically continuing to outperform throughout the coronavirus-triggered stock market crashes where major indices were extremely volatile, with some plummeting 20 per cent.” This is increasingly attracting both retail and institutional investors seeking decent returns
Health Insurance Premiums Reduced
Ontario Blue Cross and Quebec Blue Cross will offer a reduction in individual health insurance premiums for dental and healthcare benefits. The reduction corresponds to 50 per cent of the cost of dental care and 20 per cent of the cost of the extended healthcare insurance benefit and will automatically apply to its clients’ accounts for three months, starting May 1.
Milnthorp Saskatchewan’s Volunteer
Troy Milnthorp is the CPBI Saskatchewan ‘2020 Volunteer of the Year.’ The senior managing director of corporate fund services at the Saskatchewan Teachers’ Federation (STF) has done a great deal of speaking for CPBI on a volunteer basis over the years and is a ‘fan favourite.’ In addition, this year he has put a lot of time and effort into his ‘What’s Up Pension Stuff?’ articles as its volunteer pension content creator. He is a long-term CPBI member and former CPBI Saskatchewan council member.
Consultants Get Advice
Although it’s usually investment consultants who give advice to their clients, institutional investors have some advice of their own for consultants competing for their business: reach out proactively with ideas and assistance and report and respond to requests quickly and on time, says Greenwich Associates. It has identified five factors that distinguish best-in-class consultants from average practitioners. The first two ‒ timeliness of written reports and provision of proactive advice and innovative ideas ‒ show the highest degree of differentiation between the winners and the average firms and both relate to a consultant’s commitment to the relationship. The next three ‒ understanding of client goals and objectives, advice on asset allocation and liability issues, and usefulness of personal meetings ‒ relate to a consultant’s ability or willingness to listen, research, understand a client’s needs, and deliver advice specific to a client’s unique situation.
Decline Steepest Since 2008
Canadian defined benefit pension plans in the RBC Investor & Treasury Services All Plan Universe experienced their steepest decline since 2008, posting a median return of -7.1 per cent for the quarter. “It has been an exceptionally difficult period for Canadian pension plans to navigate, as the markets have been experiencing an unprecedented amount of volatility across asset classes,” says David Linds, head of Canadian asset servicing at RBC Investor & Treasury Services. “However, the substantial monetary and fiscal policy response from governments across the globe gives us room for optimism. While it’s difficult to speculate on what may happen over the short term, we hope these measures will lead to some reawakening of our economic growth in the near future.” During the first quarter of 2020, the global economy came to a virtual standstill on account of COVID-19 containment measures. Worldwide financial markets sold off, commodity prices plunged, and governments and central banks initiated aggressive measures to cushion the blow.
DC Members Maintain Contributions
Defined contribution plan assets among Fidelity Investments’ clients plunged during the first quarter, but participants, on average, maintained a steady rate of contributions to their accounts and didn’t make “drastic changes” in their asset allocation, it says. “It was encouraging to see that many investors stayed the course and did not make drastic changes to their asset allocations, with some investors increasing contributions to their retirement accounts,” says Kevin Barry, president of workplace investing at Fidelity. Among corporate 401(k) plan participants, the average contribution rate was 8.9 per cent for the first quarter, matching the rate in the fourth quarter. Within that first-quarter group, 15 per cent increased their contributions in the first quarter, due to individual choices as well as to participation in auto-escalation programs. It says 7.3 per cent of participants made a change to their asset allocation during the first quarter versus 5.2 per cent in the fourth quarter, a difference that the company says wasn’t significant. Of those making first-quarter changes, 60 per cent made just one change. The average first-quarter 2020 retirement account balance was $91,400, down from $112,300 for the fourth quarter of 2019 and $103,700 for the first quarter of 2019.
Manulife Acquires Stake In Mahindra
Manulife has acquired a 49 per cent stake in Mahindra Asset Management Company Private Limited (Mahindra AMC), a wholly-owned subsidiary of Mahindra & Mahindra Financial Services Limited (Mahindra Finance). The joint venture brings together Mahindra Finance’s domestic market strength and track record of building successful businesses and partnerships with Manulife’s global wealth and asset management capabilities. Manulife has invested US$ 35 million in the 51:49 joint venture, which aims to expand its fund offerings, drive fund penetration, and achieve long term wealth creation in India.
Waterlogic Acquisition Closes
Waterlogic, a global designer, manufacturer, distributor, and service provider of purified drinking water dispensers, has closed the acquisition of a significant minority stake in the company by BCI, Neuberger Berman, StepStone, and Skandia. The British Columbia Investment Management Corporation (BCI) entered into an agreement to acquire a significant minority stake in Waterlogic from funds managed by Castik Capital and the Waterlogic management team. Waterlogic has a direct presence in 17 countries including the UK, USA, Canada, Chile, Australia, and Western Europe and an independent global distribution network reaching over 50 countries around the world. The company is responsible for hydrating nearly 50 million consumers daily and contributes to the reduction of 23.8 billion single-use plastic bottles around the world each year.
PBC Applies Premium Reductions
Pacific Blue Cross (PBC) will apply the premium reductions to all fully insured non-refund groups retroactive to April 1 in acknowledgement of the impact of the COVID-19 crisis on small- to medium-sized businesses. The rate changes and credits for both April and May will show on the June invoice. They are a 50 per cent credit against dental premiums paid and a 20 per cent credit against non-drug-related extended healthcare premiums paid. As COVID-19 is an evolving situation, PBC will continue to monitor benefit utilization and access to healthcare providers while reviewing this interim measure on a monthly basis.
Rogers Chairs TPPTI
John Rogers is chair of the Teachers’ Pension Plan Trustee Inc (TPPTI) which manages the pension plan for Nova Scotia teachers represented by the Nova Scotia Teachers Union (NSTU). He was chief executive officer/managing partner at Stewart McKelvey for more than 12 years. Currently he is serving as director of the Nova Scotia Health Authority; chair and member of the board of governors of Acadia University; and director and former chair of United Way Halifax. The board of is comprised of four directors appointed by the NSTU and four directors appointed by the province of Nova Scotia. TPPTI was established in 2006 under a joint trust agreement between the NSTU and the province. It has the fiduciary responsibility for the Teachers’ pension plan, is responsible for its operations, and manages its investment assets. The plan also includes school administrators and faculty and professional support staff at the Nova Scotia Community College. The appointment is effective July 1.
Reopening Of Economy Requires Transparency
Any framework for a gradual reopening of the economy should be transparent, pan-Canadian, and balance the risks of further transmission with the economic costs of leaving key sectors shut down, says the C.D. Howe Institute Crisis Working Group on Business Continuity and Trade. Its playbook for a gradual return to work includes transparent pre-conditions for each stage of easing economy-wide restrictions; pan-Canadian consistency in principles, decision-making criteria, and data; sector-level staging for restart based on workplace transmission risks and economic impacts; safeguarding access to essential goods and services; synchronized re-opening of enabling public services and infrastructure; and a clear off-ramp for government-provided temporary income supports. Pre-conditions for economy-wide re-opening of the economy should be based on the judgment of public health experts and informed by further monitoring. Based on epidemiological modelling, a playbook should identify the acceptable thresholds for virus spread and health system capacity at which governments will plan to ease restrictions.
DB Plans Witness Contraction
Canadian defined benefit plans witnessed a contraction in investment returns in the first quarter of 2020, says the Northern Trust Canada Universe, finishing with single-digit losses at the median after enduring a historic period of market volatility and economic turmoil resulting from the global pandemic crisis. “Canadian pension plans demonstrated resiliency during a period of extreme market stress, with the median plan in the Northern Trust Canada Universe posting a return of -7.1 per cent for the first quarter ‒ a modest decline in light of the unprecedented conditions,” says Katie Pries, president and CEO of Northern Trust Canada. “In a volatile market riddled with fear, uncertainty, and unpredictability, Canadian pension plan sponsors navigated through uncharted territory, seeking a path to safety for the health of their employees as well as the preservation of their retirement pensions.” Canadian equities, as measured by the S&P/TSX Composite, posted a return of -20.9 per cent for the quarter, after hitting a record high close on February 20. U.S. equities witnessed a double-digit contraction, with the S&P 500 dropping by 11.7 per cent in Canadian dollars for the quarter. International developed markets, as measured by the MSCI EAFE Index, concluded the quarter in negative territory, generating a -15.2 per cent return in Canadian dollars. The MSCI Emerging Markets index, challenged by the economic turmoil from the pandemic as well as a strong U.S. dollar, posted a -16.1 per cent return in Canadian dollars during the first quarter. In the bond market, the FTSE Canada Universe Bond Index posted positive results during the quarter, generating a return of 1.6 per cent.
Remote Work To Continue
A majority of U.S. employers expect to continue their remote work policies and, to a lesser extent, flexible work arrangements after the COVID-19 pandemic ends, says a survey by Willis Towers Watson. It also found that while employers have boosted their employee communication in response to the pandemic, they will need to do more to help workers cope with expected increased levels of stress and anxiety in the months ahead. Nearly six in 10 respondents (59 per cent) expect their work-from-home policies will remain in effect after the pandemic ends while roughly half (49 per cent) expect to continue offering flexible work arrangements. Employers also anticipate the fallout from the pandemic will have lingering effects on their employees. Nearly two-thirds of respondents (64 per cent) anticipate facing higher than normal levels of employee stress and anxiety over the next three to six months while 60 per cent expect to deal with maintaining employee resiliency.
Real Estate Cutbacks Expected
Institutional investors worldwide are planning on cutting back their investments in real estate by an average of 11 per cent this year, says a survey by Institutional Real Estate and Kingsley Associates. The report also found that 40 per cent of institutional investors expect their capital flows to real estate to be lower than last year and that U.S.-based investors plan to commit $70 billion of new capital to real estate in 2020, down from $75 billion last year. Respondents expect a real estate return of 8.4 per cent in 2020, up from the 8.1 per cent they had expected in 2019. In comparison, projected returns from venture capital/private equity investments of 12 per cent in 2020, up from expectations of 10.7 per cent in 2019, and returns from fixed income investments of 3.8 per cent are predicted.
Hobday Leading Practitioner
Global Market Turns To Alternatives
Alternative investments should make up 18 per cent to 24 per cent of the global investment market by 2025, says a survey by the Chartered Alternative Investment Analyst Association. That expectation is up from about 12 per cent of the global investment market, or $13.4 trillion, at the end of 2018. Much of the growth has been due to pension plans seeking new sources of return in an interest-rate environment that has decreased return expectations. More than 50 per cent of members believe they will allocate more to private equity and venture capital in 2025 than they do currently and also believe investors worldwide will allocate more to private capital overall.
GSC Eases Strain
Green Shield Canada (GSC) is taking key steps to ease the strain on small and medium-size businesses across the country from the COVID-19 crisis. It will apply premium reductions for non-refund clients for April, May, and June. There will be a 75 per cent reduction in dental rates and a 20 per cent reduction in health rates, including vision but excluding drug. These reductions will appear on May billings and will be retroactive to April 1. June billings will also reflect the reduced rates. GSC will continue to monitor the COVID-19 situation to determine the position for July and beyond.
Brannon Joins Fengate
Jennifer Honey Brannon is executive vice-president, human resources, at Fengate Asset Management. She leads and is responsible for the firm’s people management and talent and culture development. She joins the firm from Financeit, a financial technology company, where she was most recently vice-president, human resources.