AIMCo Reports Net Return

The Alberta Investment Management Corporation (AIMCo) achieved an aggregate return on behalf of its 14 Alberta pension and endowment balanced fund clients of 2.5 per cent net of all costs for the year ended December 31, 2018. In 2018, it achieved a net return premium of 1.1 per cent for its balanced fund clients, over and above the composite benchmark. With the gains achieved in 2018, it has earned its clients investment income in excess of $60 billion, net of all costs, since being established in 2008, of which more than $6.3 billion represents value add investment income above the benchmark returns for the period. Kevin Uebelein, its chief executive officer, says, “We continue to see our long-term investment strategies paying off for Albertans.” AIMCo actively selects the assets it invests in within each class and measures its performance relative to a standard passive benchmark for each class.

Natixis Acquires Stake In Fiera

Natixis Investment Managers will acquire an 11 per cent stake of Fiera Capital. Natixis is acquiring 10.68 million Class A subordinate voting shares of Fiera from National Bank of Canada and DJM Capital. The latter company is controlled by Jean-Guy Desjardins, chairman, president, and CEO of Fiera Capital. The acquisition is part of a long-term strategic distribution agreement through which Fiera Capital will become the preferred distributor in Canada of Paris-based Natixis’ investment strategies. Natixis also will offer Fiera Capital investment strategies through its investment platform. As part of the deal, Fiera will acquire Natixis’ Canadian operations and funds.

Canadian Economy Growing Moderately

Canada’s economy will grow this year, says Craig Wright, senior vice-president and chief economist at RBC, due to a stable environment with stable inflation and a steady interest. In the ‘RBC Economic Update’ at Trez Capital’s ‘Year in Review,’ he said, however, there is lots of uncertainty in the global economy so more moderate growth will continue until this is resolved. U.S. growth was “pleasantly” surprising at 2.5 per cent due, in part, to trade where U.S. President Donald Trump’s view that trade wars are easy to win bore result. As well, the U.S. consumer is doing well which also keeps the economy strong as well. Other positive factors include unemployment at its lowest level since1969, wages are rising, and Americans are ahead of Canada when it comes to delevering their debt. Also contributing to the growth is the about face on interest rates by the U.S. Fed. Concerns about rising interest rates last fall sparked recession fears, but the Fed eased its position on rate hikes. For Canada to grow, on the other hand, exports need to grow especially as consumers pull back on their spending. However, other than oil, it is not happening. Last year it should have seen six per cent growth in exports, but it only had three and Canada has fallen to third among U.S. trading partners, trailing China and Mexico.

Healthcare System On Election Agenda

With growing evidence that the healthcare system is falling way behind, Canadians are putting political parties on notice for the upcoming federal election. An Ipsos report commissioned by the Canadian Medical Association (CMA) shows 53 per cent of Canadians said they’re worried about healthcare. By comparison, 20 per cent are concerned about a carbon tax. Six out of 10 respondents suggested they’d vote for a political party that they think has the best plan for the future of healthcare in Canada. “Every election, healthcare tops the list for Canadians and yet, our federal leaders do little to truly address it”, says Dr. Gigi Osler, CMA president. “This time around, it’s different. Canadians are no longer willing to wait for action or to see services fall victim to budget cuts.” Specific healthcare worries include long wait times (62 per cent), the shortage of health professionals (60 per cent), and crowded hospitals (59 per cent). “We’re hearing more and more devastating stories of Canadians struggling to get the care they need, from younger Canadians looking for mental health support to seniors waiting weeks for a long-term care bed,” says Dr. Osler. “This federal election, we’ll be telling federal political parties that it’s time for leadership on health. Patients and healthcare providers can no longer and will no longer wait.”

U.S. Revenues To Exceed Canadian

Within five to seven years Stephen Liptrap, president and chief executive officer of Morneau Shepell Inc., expects the company’s U.S. revenues to be bigger than in Canada. Speaking at its annual general meeting of shareholders, he said currently about 25 per cent of its revenue from outside Canada. Not long ago, it was five per cent. However, given the fact the U.S. is a much larger market than Canada, the potential is also greater. For the foreseeable future, he expects to see single digit growth in Canada and double digit outside Canada. This is a good example of a Canadian company that competes well internationally. A key element of its growth in the U.S. was the acquisition of LifeWorks. The largest in its history, it “added significant scale to our business in the United States, United Kingdom, and Australia and built on our advantage to be the power brand in employee well-being. As we go forward, we are excited by the opportunities in front of us to make a real difference in the world, by focusing on improving lives and the businesses of our clients, while delivering exceptional results and continually improving our business.”

Investors Believe Emerging Markets Fairly Valued

The proportion of UK investors believing emerging markets equities are fairly valued increased in the first quarter, while more investors believed bonds are overvalued, says CFA UK’s latest quarterly valuations index survey. The index showed 33 per cent believed emerging markets equities are fairly valued, compared to 22 per cent in the fourth quarter of 2018. The perceived value correction comes following a period of underperformance for the asset class in 2018. The outlook for developed markets equities, however, rose from the previous quarter, with 57 per cent believing that asset class is overvalued, down from 61 per cent the previous quarter. More investors, meanwhile, believed bonds are overvalued. Seventy-three per cent of respondents said corporate bonds are overvalued for the first quarter, up from 69 per cent in the previous quarter’s survey. The perception of government bonds fared similarly poorly, with 60 per cent of investors believing such bonds are overvalued.

Genetic Testing Identifies Right Medication

Finding the right medication to treat certain conditions can be a frustrating trial-and-error process and as many as 50 per cent of medications go unused because of unpleasant adverse effects. Manulife recently piloted a program to explore how a person’s genes can affect their body’s response to medications, specifically those used to treat depression, pain, or anxiety. Preliminary results show 51 per cent of prescriptions were changed (either the dosage or medication), following genetic testing. The pilot continues and will help determine if considering a person’s genetics can support the treatment and recovery process and help people return to health, regular life, and work sooner.

U.S. Job Growth Good For Real Estate

Continued job growth in the U.S. will be good for real estate this year, but difficulty finding skilled workers will slow the pace of growth because employment is almost at full capacity, says Greg Vorwaller, president of Trez Capital. Speaking on its ‘Market Perspectives’ at its ‘Year in Review,’ he said looking forward, the U.S. economy may face blips in 2021 and 2022 because of global uncertainty. In Canada, he said OSFI and provincial regulations have had a more than intended effect on the housing industry although the low interest rates may have mitigated the total impact. And jobs and immigration are fueling demand in Vancouver, BC; Toronto, ON; and Montreal, QC.

PSP Investments Selling Advisor Group

Investment funds affiliated with Lightyear Capital LLC, a private equity firm focused on financial services investing, and PSP Investments (the Public Sector Pension Investment Board) will sell Advisor Group, Inc. to Reverence Capital Partners. Lightyear and PSP Investments acquired Advisor Group from AIG in May 2016. Since that time, client assets under administration have grown from $157 billion at the time of purchase to $268 billion today.

Bai Joins NEI

John Bai is vice president and chief investment officer of Aviso Wealth and NEI Investments. Previously, he held leadership positions at TD, Merrill Lynch Canada, DundeeWealth, and, most recently, Scotia Wealth Management.

Panel Examines Benefits Administration

The Canadian Group Insurance Brokers June 2019 seminar will feature a panel discussion on ‘Benefits, Administration, & Communication.’ Panelists are Allison Brown, of Thorpe Benefits; Robin Bailey, of Aria Benefits; Michael Greenwood, of Pelorus; Drew Hubbard, Hubbard Insurance; Justin James, of Harry James Group; and Joe Leger, of Execu-Comp Benefits. It takes place June 5 in Vaughan, ON. For information, visit CGIB Session