It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
ITHACA, N.Y. – Stock trading volumes in the United States have soared over the last year and much of it seems to be driven by retail investors. With thousands of stocks to choose from, what factors influence investors’ decisions?
In a new Cornell University study, published Aug. 10 in Management Science, researchers show that advertising is one of the most noteworthy influences behind retail stock investing.
Jura Liaukonyte, the Dake Family Associate Professor at the Charles H. Dyson School of Applied Economics and Management, and her co-author found that 15 minutes after a TV ad aired a number of investors sought out financial information about the advertiser.
This results in an average of a 3% increase in online searches to the Securities and Exchange Commission’s Edgar database of company filings and an 8% increase in Google searches.
The nature and timing of the ads made a difference. For example, commercials aired during prime-time hours and involving the financial sector sparked the strongest investor response. Ads for pharmaceutical products and consumer staples also generated more interest.
Products with names that matched or shared similarities with the name of the publicly traded company itself spurred greater reaction. The most influential commercials were longer, aired first among several commercials during ad breaks, and surfaced in new – rather than long-running – campaigns.
“The evidence presented in our paper suggests that the advertising effect on investor actions is more immediate and far-reaching than has previously been documented,” Liaukonyte said. “The advertising-induced trading volume is less than 1% of the advertiser’s stock on a given day, but this increase is notable and isn’t an insignificant number.”
The study additionally explored a sample of 495 firms on Robinhood, the online trading platform, over 2019-20. These results indicate that the hourly turnover of retail investors holding a specific stock on Robinhood is 24% higher when a TV ad for that company is aired in that hour. This number rises to 28.7% for ads that were aired during live programs such as sporting events.
“One aspect that is surprising is that we found that television ads also trigger investor interest and subsequent trading in the advertiser’s closest rival, major suppliers and other firms,” Liaukonyte said.
Liaukonyte worked with Alminas Zaldokas, an associate professor of finance at the Hong Kong University of Science and Technology, on the research.
The study suggests that firms might benefit from placing more ads after releasing announcements about impressive financial performance or after their key competitors release positive financial performance results to counterbalance the increased investor attention targeted to rivals.
IMAGE: SCIENTISTS UNDERSCORE THE POTENTIAL OF A NEW CLASS OF MATERIALS TO CONVERT SUNLIGHT TO FUELview more
CREDIT: SHOOLINI UNIVERSITY
Photocatalysts absorb energy from light to make a chemical reaction happen. The best known photocatalyst is perhaps chlorophyll, the green pigment in plants that helps turn sunlight into carbohydrates. While carbohydrates may be falling out of favor, photocatalysis is garnering more attention than ever. In a photocatalytic process, light falls on a photocatalyst, increases the energy of its electrons and causes them to break their bonds and move freely through the catalyst. These “excited” electrons then react with the raw materials of a chemical reaction to produce desired products. A top priority in the field of alternate energy research is using photocatalysts to convert solar energy to fuel, a process called “solar-to-fuel production.”
In an article published in Coordination Chemistry Reviews, Dr. Changlei Xia from Nanjing Forestry University, China; Dr. Kent Kirlikovali from Northwestern University, USA; Dr. Thi Hong Chuong Nguyen, Dr. Xuan Cuong Nguyen, Dr. Quoc Ba Tran, and Dr. Chinh Chien Nguyen from Duy Tan University, Vietnam; Dr. Minh Khoa Duong and Dr. Minh Tuan Nguyen Dinh from The University of Da Nang, Vietnam; Dr. Dang Le Tri Nguyen from Ton Duc Thang University, Vietnam; Dr. Pardeep Singh and Dr. Pankaj Raizada from Shoolini University, India; Dr. Van-Huy Nguyen from Binh Duong University, Vietnam; Dr. Soo Young Kim and Dr. Quyet Van Le from Korea University, South Korea; Dr. Laxman Singh from Patliputra University, India; and Dr. Mohammadreza Shokouhimer from Seoul National University, South Korea, have highlighted the potential of covalent organic frameworks (COFs), a new class of light-absorbing materials, in solar-to-fuel production.
As Dr. Pardeep Singh explains, “Solar energy has been successfully tapped to make electricity, but we are not yet able to efficiently make liquid fuels from it. These solar fuels, like hydrogen, could be an abundant supply of sustainable, storable, and portable energy.”
The specialty of COFs lies in their ability to improve catalysis and add special substituent molecules called “functional groups” to their structure, providing a way around the limitations of existing photocatalysts. This is due to certain favorable properties of COFs such as chemical stability, controllable porosity, and strong electron delocalization, which make them extra stable.
Like the name suggests, COFs consist of organic molecules that are bonded together into a structure that can be tailored to suit various applications. Moreover, strong electron delocalization means that, unlike in semiconductor photocatalysts, the excited electrons recombine midway only infrequently, resulting in more excited electrons for the chemical reaction. Since these reactions occur at the surface of the photocatalyst, the increased surface area and modifiable porosity of COFs is a huge advantage. COF-photocatalysts find application in the conversion of water to hydrogen, and the production of methane from carbon dioxide, thus promising the dual benefit of producing fuel and mitigating global warming. Furthermore, they can even help with nitrogen fixation, plastics production, and storage of gases.
A new kind of COF, covalent triazine frameworks (CTFs), are currently at the cutting-edge of hydrogen production research. CTFs have 20-50 times the ability to produce hydrogen, compared to graphitic photocatalysts, making them a very promising option for future fuel production.
However, before we put the solar-powered cart before the horse, it is important to note that COF-based photocatalysts are at an early stage of development and still do not produce fuel as efficiently as their semiconductor-based counterparts. Nevertheless, their outstanding properties and structural diversity make them promising candidates for future solar-to-fuel research and a viable solution for the ongoing energy crisis. “The most essential issue is to explore robust COFs-derived catalysts for the desired applications. It can be expected that COF-based photocatalysts will achieve a new milestone in the coming years,” concludes an optimistic Dr. Pankaj Raizada.
Indeed, a future based on clean energy seems not that far away!
CAPTION
Covalent organic frameworks (COFs) are porous, structured organic compounds that can convert solar energy into fuels like hydrogen
CREDIT
https://pixabay.com/users/andreas160578-2383079/
Reference
Authors: Changlei Xia1, Kent O. Kirlikovali2, Thi Hong Chuong Nguyen3,4, Xuan Cuong Nguyen3,4, Quoc Ba Tran3,4, Minh Khoa Duong5, Minh Tuan Nguyen Dinh5, Dang Le Tri Nguyen6,7, Pardeep Singh8, Pankaj Raizada8, Van-Huy Nguyen9, Soo Young Kim10, Laxman Singh11, Chinh Chien Nguyen3,4, Mohammadreza Shokouhimer12, Quyet Van Le10
Title of original paper: The Emerging Covalent Organic Frameworks (COFs) for Solar-Driven Fuels Production
Institute of Research and Development, Duy Tan University, Vietnam
Faculty of Environmental and Chemical Engineering, Duy Tan University, Vietnam
University of Science and Technology, The University of Da Nang, Viet Nam
Ton Duc Thang University, Vietnam
Faculty of Applied Sciences, Ton Duc Thang University, Vietnam
Shoolini University, India
Binh Duong University, Vietnam
Korea University, South Korea
R.R.S. College (Patliputra University), India
Seoul National University, Republic of Korea
About the authors
Dr. Pardeep Singh is a professor at Shoolini University. His area of research is graphene-based photocatalytic materials for depollution processes. His publications include 124 research papers; he has also filed 31 patents. Dr. Singh won the DST-Fast Track Young Scientist Award in 2013, and the Vice Chancellor Young Academician Award in 2019.
Dr. Pankaj Raizada is an associate professor at Shoolini University. Her research focuses on the design and synthesis of advanced photocatalytic materials for energy and environmental remediation. She has published over 102 research papers and seven book chapters and has received 21 patents. Dr. Raizada won the DST-Fast Track Young Scientist Award in 2015 and holds a funded project from the HP Council for Science, Technology and Environment.
JOURNAL
Coordination Chemistry Reviews
DOI
10.1016/j.ccr.2021.214117
METHOD OF RESEARCH
Literature review
SUBJECT OF RESEARCH
Not applicable
ARTICLE TITLE
The Emerging Covalent Organic Frameworks (COFs) for Solar-Driven Fuels Production
ARTICLE PUBLICATION DATE
20-Jul-2021
Mubadala and CDPQ Join Round Hill Capital on Dutch Residential Platform
Posted on 07/28/2021
Round Hill Capital is a global real estate investor, developer and manager. Round Hill Capital, along with Mubadala Investment Company and Ivanhoé Cambridge (real estate unit of Caisse de depot et placement du Quebec), announced a new strategic partnership to expand their Dutch Residential Investments strategy.
The new partnership will see Round Hill Capital, Mubadala and Ivanhoé Cambridge use their combined expertise in global real estate investment to target high quality residential investments with an attractive risk adjusted return profile across the Netherlands.
The partnership will build on the seed portfolio built to date with the aim of at least doubling the number of homes for rent under management. The partnership will target some of the largest Dutch cities with a high number of young professionals and families looking to take their first steps up the property ladder, but who are unable to do so because of local supply/demand imbalances. Round Hill Capital has been a significant investor in the Netherlands for seven years. Mubadala remains committed to investing in sustainable residential opportunities globally.
Round Hill Capital will lead operations; acquiring and managing properties across the Netherlands, with a focus on well located and well-designed residential assets that promote affordable, sustainable lifestyles for local communities.
Mubadala and Round Hill Capital 2020 Earlier, Round Hill Capital started a joint venture with Mubadala that saw the acquisition in 2020 of a portfolio of 821 affordable residential homes for rent in city center locations in the Netherlands.
BlackRock Invests in Mubadala Capital’s Private Equity World
Posted on 08/11/2021
Abu Dhabi-based Mubadala Capital is the asset management subsidiary of Mubadala Investment Company.
BlackRock’s Secondaries and Liquidity Solutions group and a consortium of global institutional investors revealed plans to invest in a portfolio of assets, managed by Mubadala Capital, alongside a US$ 400 million commitment into Mubadala Capital’s third private equity fund (Fund III). Mubadala Capital Private Equity Fund III had a final close of US$ 1.6 billion. BlackRock and two unknown limited partners made up the US$ 700 million commitment part of the SLS deal.
Mubadala Capital manages around US$ 9 billion of assets in third-party managed funds across its private equity, public equities, venture capital, and Brazil businesses.
The deal gives Mubadala flexibility, meaning it can put part of a private equity deal on its balance sheet and the other portion in a fund vehicle that would be open to other investors.
BlackRock SLS This partnership was formed in parallel with the final close of BlackRock’s US$ 3 billion Secondaries and Liquidity Solutions (SLS) strategy in March 2021. More than 70 institutional investors around the world committed capital to the fundraise, including public and private pension funds, insurance companies, sovereign wealth funds, endowments, foundations, family offices and high-net-worth individuals. Institutional investors who participated in the fundraise include new and existing investors to BlackRock Private Equity Partners as well as BlackRock Alternative Investors. Through the SLS strategy, BlackRock seeks to invest in mid-sized secondary transactions. SLS is highly selective in seeking top risk-return opportunities across both traditional and non-traditional secondaries, including single and multi-fund portfolios, manager-led restructurings, and other opportunistic investments.
Earlier, BlackRock formed a late-stage and early-growth private equity platform with Temasek Holdings called Decarbonization Partners.
Mubadala is not a novice to these types of transactions. In 2017, French manager Ardian SA committed US$ 2.5 billion to Mubadala Capital.
CPP Investments Welcomes New Directors to its Board
NOT ONE STAKEHOLDER REPRESENTATIVE, NO UNION, CONSUMER, ENVIRONMENTAL, REPS
LACK OF DIVERSITY, NO REAL ESG, WHITE MALE BANKERS AND EXEUTIVES ETC.
TORONTO, Aug. 6, 2021 /CNW/ - Today, the Chairperson of Canada Pension Plan Investment Board ("CPP Investments") welcomed the appointments of two new directors to the organization's board of directors.
"We are pleased to welcome Dean Connor and Barry Perry to the Board of Directors," said Heather Munroe-Blum, Chairperson of CPP Investments. "We know they share our commitment to global best-in-class standards of organizational investment capabilities, corporate governance, and diversity, commensurate with our public purpose. Their respective unique credentials will be a valuable complement to our experienced Board."
Dean Connor has more than four decades of global experience in financial services and executive consulting.
Between 2011 and 2021, Connor served as President & CEO of Sun Life Financial Inc., a leading financial services company. Prior to this, he held senior roles with Sun Life, including Head of Canadian Operations and Chief Operating Officer. Connor previously had a 28-year tenure with a human resource consulting firm, where he rose to be President for the Americas, a position he held until 2006.
Connor is a Fellow of the Society of Actuaries and the Canadian Institute of Actuaries. He holds an Honours Business Administration from the Ivey School of Business at Western University. Connor currently serves as a Trustee for the University Health Network in Toronto and as a member of the Ivey Advisory Board. He was named Canada's Outstanding CEO of the Year for 2017, Ivey's Business Leader of the Year for 2018 and one of the Top CEOs in the World for 2019 by the Harvard Business Review.
Barry Perry has more than three decades of experience in the utilities, paper manufacturing and oil refining sectors.
Between 2015 and 2020, Perry held senior roles with Fortis Inc., most recently serving as President & CEO, as well as Vice President of Finance and Chief Financial Officer from 2004 to 2014. Prior to joining Fortis Inc., he served as Vice President and Treasurer with a global forest products company and Corporate Controller with a large crude oil refinery.
Perry holds a Bachelor of Commerce (Honours) from Memorial University of Newfoundland and is a member of the Association of Chartered Professional Accountants of Newfoundland and Labrador. Perry currently serves on the Board of Capital Power. In 2019, he was named Atlantic Business Magazine CEO of the Year.
Canada Pension Plan Investment Board Names New Private Equity Head
Baystreet.ca August 3, 2021·1 min read
The Canada Pension Plan Investment Board (CPPIB) has named Suyi Kim, the pension fund’s top executive in Asia, to run its $100 billion private equity division.
Kim will lead a department that’s an active player in buyouts globally, both in direct investments and through funds run by Apollo Global Management, KKR and other private equity firms. The CPPIB’s private equity assets have grown more than fivefold in the past decade.
The appointment marks a key step in the reshaping of the team around Chief Executive Officer (CEO) John Graham, who was given the top job in February of this year when former CEO Mark Machin resigned after flying to United Arab Emirates to receive a COVID-19 vaccine in defiance of government guidelines to avoid international travel.
Kim is already one of the most powerful women at the $497.2-billion Canadian pension fund, alongside Deborah Orida, its global head of real assets. Kim joined CPPIB in 2007 after working for the Ontario Teachers’ Pension Plan and Carlyle Group and opened the pension fund’s Hong Kong office in 2008. She was head of CPPIB’s private-equity operations in Asia for more than eight years.
CPPIB has been increasingly investing in private assets amid stretched valuations for stocks and bonds. It’s part of the consortium led by Fortress Investment Group that’s making an $8.8 billion bid for Wm Morrison Supermarkets.
The Canadian pension fund’s private-equity investments returned 36.6% in the fiscal year ended March 31, generating a net income of $34 billion, according to its annual report.
Kim, who starts in the role on September 15, replaces Shane Feeney, who accepted an executive role at Toronto-based Northleaf Capital Partners.
For further information: Frank Switzer, Managing Director, Investor Relations, T: +1 (416) 523-8039, fswitzer@cppib.com Related Links
The Canada Pension Plan Investment Board (CPPIB) has announced two new appointments to its board of directors.
Former Sun Life president and chief executive officer Dean Connor will join Barry Perry, the former president and CEO of utilities giant Fortis, on CPPB’s board.
CPPIB is a professional investment management organization that serves the “best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan.”
In the insurance sector, the organization is known for its ownership of global specialty insurance and reinsurance firm Ascot Group and its investment in UK insurance provider BGL Group.
“We are pleased to welcome Dean Connor and Barry Perry to the board of directors,” said Heather Munroe-Blum, chairperson of CPPIB. “We know they share our commitment to global best-in-class standards of organizational investment capabilities, corporate governance, and diversity, commensurate with our public purpose. Their respective unique credentials will be a valuable complement to our experienced board.”
Connor has more than four decades of global experience in financial services and served as president and CEO of Sun Life Financial between 2011 to 2021. Prior to this, he held senior roles with Sun Life, including head of Canadian operations and chief operating officer.
Meanwhile, Perry has more than three decades of experience in the utilities, paper manufacturing, and oil refining sectors. Between 2015 and 2020, Perry held senior roles with Fortis, most recently serving as president and CEO, as well as vice president of finance and chief financial officer from 2004 to 2014.
CPP Investments adds former Mercer partner Dean Connor to board 10 August 2021 Consulting.ca
The Canada Pension Plan Investment Board has appointed Dean Connor, formerly a partner at HR and wealth management consultancy Mercer, as a member of its board of directors. CPP Investments also announced the addition of Barry Perry, an energy sector veteran, as a board member.
Connor brings more than 40 years of experience in financial services and consulting. He spent the last 15 years at Sun Life, where he served as CEO from 2011 to 2021. Before that, he served as COO and head of Canadian operations at the insurance and wealth management giant.
Before joining Sun Life in 2006, Connor spent 28 years at Mercer, where latterly served as president for the Americas.
Connor is a trustee for the University Health Network in Toronto and a member of the Ivey School of Business advisory board. He was named one of the Top CEOs in the World for 2019 by Harvard Business Review.
Connor holds a bachelor’s degree in business administration from Western University and is a fellow of the Society of Actuaries and the Canadian Institute of Actuaries.
"We are pleased to welcome Dean Connor and Barry Perry to the Board of Directors," said Heather Munroe-Blum, chairperson of CPP Investments. "We know they share our commitment to global best-in-class standards of organizational investment capabilities, corporate governance, and diversity, commensurate with our public purpose.” CPP Investments manages the $497.2 billion in the CPP fund. The Toronto-based organization is governed and managed independently of the CPP and at arm’s length of the Canadian government. The CPP Investments board is composed of 12 directors.
About CPP Investments Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm's length from governments. CPP Investments' 12-member Board of Directors was the first non-American firm to receive, in 2020, the US National Association of Corporate Directors NXT ® Award, which recognizes boards that use diversity and innovation to build long-term value. At March 31, 2021, the Fund totalled $497.2 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.
CPPIB, Alberta Plan Invest Nearly $2 Billion in BAI Communications
The Canadian allocators are deepening commitments into the firm just as it’s expanding its 5G rollout capabilities in the US and UK
The Canada Pension Plan Investment Board (CPPIB) and Alberta Investment Management Corporation (AIMCo) have made a $1.9 billion (C$2.4 billion) follow-up investment into telecommunications infrastructure firm BAI Communications, just as it’s expanding its 5G rollout capabilities.
On Monday, BAI disclosed that it has acquired Mobilitie, the largest privately held telecommunications infrastructure company in the US, which also supplies 5G connectivity. The purchase of the California-based firm will allow BAI to expand coast to coast in the US. BAI already operates several large wireless infrastructure projects in the country, notably in the New York City subway system.
BAI has also recently partnered with Transport for London (TfL), a government body in the greater London area in the UK. The London Underground is expected to get full phone coverage by 2024, thanks to the partnership with BAI. A fiber optic network to support the 4G and 5G connectivity throughout the city’s homes and businesses is also forthcoming. “We continue to see strong potential in BAI Communications’ vision,” Scott Lawrence, managing director and head of infrastructure at CPPIB, said in a statement. “The acquisition of Mobilitie and establishment of a long-term partnership with TfL represent attractive opportunities for CPP Investments to increase its financial commitment to BAI and the digital infrastructure sector more broadly.”
The deepening commitment by CPPIB and AIMCo will allow the Australia-based BAI to expand its business globally. CPPIB has been investing in BAI for more than a decade, since which the firm has expanded to the US, Canada, Hong Kong, and the UK.
The allocator, with US$402.8 billion (C$497.2 billion) in assets, is a majority shareholder, with an 86% stake in the company. AIMCo, with US$104.5 billion (C$129 billion) in assets, is a minority stakeholder in the firm.
Interest in telecommunications infrastructure has grown with the global onset of 5G. The faster connectivity speed is expected to remake whole industries, including by supporting autonomous driving, smart homes, the storage and sharing of personal data, as well as the advancement of artificial intelligence (AI).
Spending in telecommunication services is expected to grow by about 1% this year, after the pandemic purportedly curtailed spending last year, according to data firm Statista.
BAI: The scandal continues. One of the most notorious financial scandals that have shaken Mauritius so far has been the BAI scam. In fact, it is an unprecedented financial scandal that the country witnessed and some financial experts have compared it to the Bernard Madoff investment scandal.
The Madoff investment scandal broke in 2008, when Bernard Madoff admitted that the wealth management arm of his business was an elaborate Ponzi scheme. Madoff was sentenced to 150 years in prison for running the biggest fraudulent scheme in U.S. history. Even now, only a few of his victims have since regained all of their losses.
On April 3, 2015, BAIC's banking subsidiary, Bramer Banking Corporation, banking license was revoked by the Bank of Mauritius following an alleged US$693 million Ponzi scheme being run at the bank. This alleged ponzi scandal also affected BAIC's insurance subsidiary, BAI Co.
The BAI Case. BAI is a more complex case. In so far as the insurance products are concerned, these have existed for quite some time and it is probably true that some agents might have tried to ...
AIMCo’s board makes recommendation after reviewing strategy that lost $2.1 billion
The Alberta Investment Management Corp. has completed its review of a volatility trading strategy, known as VOLTS, that resulted in $2.1 billion in losses in the wake of the coronavirus crash.
While the strategy would have been expected to generate some losses in periods of market volatility, the losses were far greater than expected, noted a report on the review.
As the crisis unfolded, the AIMCo’s board took steps to mitigate further losses by approving a plan to wind down and permanently close the strategy altogether. It also moved to review more than 50 other value-added strategies to determine whether any of them also had the potential for outsized losses. It found none of them had the potential to perform as poorly as the volatility strategy.
The report outlined the history of the AIMCo’s volatility contracts strategy, which began in 2013 and was expanded in January 2018 to include capped/uncapped variance swaps. “These swaps trade a relatively fixed return during typical to moderately high volatility conditions for a significantly more steeply tilted and non-linear loss function during high to very high volatility conditions and carry the risk of greatly magnified losses from extreme volatility events, such as the COVID-related volatility experienced in March or that experienced in the October 1987 Black Monday event.”
While the volatility portfolio was shifting towards higher-risk capped/uncapped contracts, the overall portfolio was growing above its pre-2018 levels. As well, a legacy risk system was in place that worked reasonably well for situations with a linear relationship between portfolio investments and underlying economic and market factors. However, it didn’t work well with non-linear returns, like the volatility strategy. “The limitations of the risk system had previously been recognized and its replacement had been identified and was in the process of being implemented,” said the report.
By January 2020, the AIMCo’s risk management team had modelled the risk involved in the capped/uncapped strategy and called for more attention to be paid to the unlikely, but still possible, chance of extreme tail risk. The public equities team started taking action to reduce the fund’s overall exposure to the volatility strategy in early March, but by then it was too late. “Unprecedented and sustained volatility caused by the COVID-19 crisis made it impossible to unwind the positions without considerable loss.”
In response to the situation, the board launched a comprehensive review of the volatility trading strategy. A new report by the AIMCo outlines recommendations and changes as a result of the review.
“Oversight of AIMCo’s investment strategies and risk management is the responsibility of the board of directors,” noted the report. “The losses incurred by our clients as a result of the VOLTS strategy are wholly unacceptable. The board is determined that the lessons from this experience will improve AIMCo’s management processes, prevent any similar occurrences and, most importantly, strengthen the risk culture of AIMCo.”
The board’s review concluded that the degree of challenge from the first and second lines of defence, namely the investment and risk management teams, regarding the strategy was unsatisfactory. And the “breadth and depth of risk governance controls, collaboration and risk culture” were also unsatisfactory. Further, analytics relating to the extreme tail risk inherent to the volatility strategy weren’t escalated to senior management and the board quickly enough.
As a result of the review, the board has adopted — and instructed management to implement — 10 recommended changes. First, that the AIMCo’s chief executive, investment and risk officers will personally lead and ensure the integration of the risk management and investment management staff, progressing toward a more collaborative and inclusive relationship. Second, the AIMCo will broaden its risk framework to deepen its description of risk appetite and risk tolerance, as well as launch a process of dialogue and debate across the organization on these topics.
Further, the AIMCo’s management will propose revised investment approval thresholds relating to any investment strategy or product using over-the-counter options, swaps or other derivatives, with the exception of cases in which derivatives are used only for hedging risks inherent in an investment strategy. As well, regular risk reporting to the board will become more granular by including exposure and risk measures against applicable thresholds and limits for all products and strategies.
Management will also develop an escalation and remediation process whereby risks that may lead to outsized or unexpected losses will be identified, regardless of the risk limit. And the risk management team will provide the approving authority, including an independent review of significant risks, whenever a product or strategy originates, is expanded or changed in terms of design or description.
At the outset, expansion or change in design or description of any strategy or product, the AIMCo will also clearly indicate any risk that an amount in excess of the initial investment could be lost. As well, if a change is made to the design or description of an investment, the original authority that approved the product or strategy will have to re-approve it as though it were completely new.
As for talent management, the board said its human resources and compensation committee will continue its redesign initiatives to push risk and investment managements’ further integration, including provisions for their compensation to be meaningfully linked to both teams’ degree of improved collaboration. The board also asked the chief executive officer to revise the AIMCo’s talent management strategy, organizational design and management succession plan.
In the review process, the AIMCo used its internal audit group and chief legal officer, in addition to third-party advice from Barbara Zvan, former chief risk officer at the Ontario Teachers’ Pension Plan, and KPMG’s financial risk management team.
“No matter how carefully designed a set of prescriptive rules are, a so-minded individual or group can usually find a way to circumvent such rules,” said the report. “Consequentially, the most important changes emerging from the board’s review are actually not process changes at all, but rather changes to the culture in which the rules are to be embedded.
“With the oversight of the board, senior management will continue to move AIMCo’s culture toward a more collaborative environment among risk and investment professionals. These changes are not so easily effected and will require strong focus and leadership from the board and senior management, as well as continuous evaluation against clear, predetermined benchmarks.”
Alberta Finance resists pension plan representation on AIMCo board
NDP MLA's bill proposes adding members from four largest public sector pension plans to board Michelle Bellefontaine · CBC News · Posted: Feb 26, 2021 5:02 PM MT | Last Updated: February 26
NDP MLA Shannon Phillips introduced Bill 208 last fall. (Émilie Vast/CBC)
Alberta finance officials are pushing back against a proposal in a private members' bill that would add members representing public sector plans to the board of the Alberta Investment Management Corporation (AIMCo).
Shannon Phillips, the NDP MLA for Lethbridge-West, presented Bill 208, Alberta Investment Management Corporation Amendment Act, 2020, to the Standing Committee on Private Bills and Private Members' Public Bills on Friday.
The bill proposes adding four members representing the Alberta Teachers Retirement Fund, Special Forces Pension Plan , Local Authorities Pension Plan and Public Sector Pension Plan to AIMCo's 11-person board.
Since taking office nearly two years ago, the current United Conservative government has compelled the pension funds to use AIMCo as their investment manager.
MLAs have been inundated with phone calls, emails and letters about this issue, Phillips said.
Adding representation from the four largest public sector pensions to the AIMCo board would help ease those worries, she said.
"Those funds then deserve a better window over governance at AIMCo and input into how they make investment decisions and ultimately how they serve their clients," she told the committee.
AIMCo is an investment firm owned by the provincial government. Management came under fire last year after losing $2.1 billion from a bet on market volatility.
Managers of the four pensions, which provide retirement income for teachers, provincial and local government workers, health care workers and municipal police officers have expressed concern that AIMCo would mishandle their funds.
Lowell Epp, assistant deputy minister for Treasury Risk and Management for the Alberta government, rejected Phillips' proposal in his presentation to the committee.
He says a 15-member board is unwieldy and would be less productive than a smaller board. He also suggested the proposed new members would represent the interests of their individual pension plans and not AIMCo as a whole.
"Representative boards frequently take a combative approach to decision making rather than a much more productive, consensus-based approach," he said.
Epp said each public sector pension retains control over their investment policies.
UCP MLAs, who make up the majority on the committee, echoed some of Epp's concerns.
Referendum question
The Alberta government has the power to issue investment directives to AIMCo. Bill 208 would remove that provision from existing legislation.
Concerns have been raised that the UCP government could order AIMCo to invest funds in oil and gas projects.
Phillips said the power has never been used, so it shouldn't be a problem to remove it.
"Removing that section of the act is a very simple solution to some of the concerns that have been raised by the public," she said.
The government is currently studying the feasibility of leaving the Canada Pension Plan and creating an Alberta Pension Plan in its place, a measure recommended by the Fair Deal Panel last year.
Bill 208 proposes asking Albertans in a referendum whether they want to switch to a provincial pension plan and if they want AIMCo to manage the fund.
Epp, in his presentation, said early evidence suggests a provincial pension plan could be beneficial, but that no decisions have been made on who would manage the funds.
MLAs on the committee agreed to hear stakeholder presentations on Phillips' bill before deciding whether to send it back to the legislative assembly for additional debate.
UCP-dominated committee kills bill that would have added representation to AIMCo board
Author of the article: Ashley Joannou Publishing date: Mar 08, 2021 •
A lone skater enjoys the ice rink below the Alberta Legislature, in Edmonton Wednesday Jan. 27, 2021. We have two years to figure out the future of Alberta before separation is potentially put on a referendum question, says columnist Danielle Smith. PHOTO BY DAVID BLOOM /Postmedia Article content A bill that would have added representatives from four major Alberta pensions plans to the board of AIMCo is essentially dead after a government-dominated committee voted against it being debated in the legislature.
The standing committee on private bills and private members’ public bills heard from speakers in favour of NDP MLA Shannon Phillips’ bill Monday morning before voting 6-4 along party lines that the bill should not be given a full debate.
“Today’s decision is yet another example of the UCP ignoring the legitimate concerns of Albertans, and moving ahead with their ideological agenda,” Phillips said in a statement following the defeat.
Bill 208, the Alberta Investment and Management Corporation Amendment Act, would have bumped the size of AIMCo’s board from 11 to 15 by adding representatives from the Alberta Teachers Retirement Fund, Special Forces Pension Plan, Local Authorities Pension Plan and Public Sector Pension Plan.
Those four pensions are now legally required to be managed by AIMCo following legislation passed late last year. The government argued the consolidation would allow for better economy of scale with lower costs overall but unions have expressed distrust in AIMCo’s management and worries they were giving up control.
Greg Meeker, former chair of the Alberta Teachers Retirement Fund, argued Monday that without representation on the board, all teachers could do if they were upset by an AIMCo decision was write a “strongly worded letter.”
“I would suggest that we need representation to go beyond that level, beyond the strongly worded letter level,” he said,
UCP MLA Shane Getson said he was worried adding extra seats would potentially give undue influence to some by having a client able to influence their own specific pension at the board level.
Meeker said adding four seats to AIMCo’s board would not provide a particular advantage.
“That’s not an ability to issue edicts to AIMCo. That’s not the ability to issue an order to the investment staff to prioritize the ATRF investments,” he said. Brad Readman, the president of Alberta Fire Fighters Association said his members’ pensions are part of the LAPP, which is currently handled by AIMCo, but the current legislation takes away the option to ever leave.
He said while the current members’ pensions won’t change there is a responsibility to protect future members and that Phillips’ bill should be debated. “Let’s make sure the long-term pension plans and retirement security of firefighters, first responders, teachers, are protected,” he said.
Government officials have said public sector pension boards would continue to control their own investment strategies even under AIMCo’s management though the Alberta Teachers Association has promised to sue over a ministerial order they say takes away their control. Bill 208 would have also removed a provision in the existing law that allows the government to give AIMCo investment directives.
The bill would have also required a referendum if Alberta launched a provincial pension plan and AIMCo was chosen to manage that money.
Members on both sides of the aisle acknowledged hearing concerns from their constituents about how pensions are managed under the government’s new rules. UCP MLA Whitney Issik blamed this on a “hyperbolic misinformation campaign” and pointed out that the LAPP, managed by AIMCo, is ranked among the top plans in Canada.
NDP members argued that the level of concern was all the more reason to give the issue a full debate.
“It needs to have a proper debate where we can hear from the minister of finance, where we hear from other ministers where we can hear from the opposition, and government, and independent MLAs,” said NDP MLA Thomas Dang.
CUPE Files Legal Challenge to OMERS' Punitive Treatment of Paramedics
Author of the article:
Business Wire
Publishing date:
Aug 11, 2021 •
Article content
TORONTO — Today, the Canadian Union of Public Employees (CUPE) filed a legal challenge with the Financial Services Regulatory Authority of Ontario (FSRA) about OMERS’ treatment of paramedic members accessing earlier retirement options.
“Paramedics have been demanding that OMERS allow them fair access to earlier retirement options for over a decade,” said Fred Hahn, President of CUPE Ontario, about the Ontario Municipal Employees Retirement System. “Now OMERS is saying working paramedics can transition to earlier retirement options only at the risk of deep cuts to their pensions. This is completely unacceptable, and these front-line workers simply deserve better.”
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Paramedics are recognized in federal law as a Public Safety Occupation, a designation that according to the Canada Revenue Agency acknowledges their working conditions as situations “where the limitations associated with ageing are common and have the potential to significantly endanger the safety of the general public.” Paramedics are eligible for earlier retirement options under federal law if their pension plan allows it.
“Access to earlier retirement is a health and safety issue for paramedics on the front lines and for the people we serve in the community,” said Peter Joseph, an active paramedic and chair of CUPE’s Ambulance Committee of Ontario. “Our work as paramedics takes an enormous physical and mental toll, and OMERS is refusing to recognize that reality.”
“Ontario pension law dictates that the value of a worker’s accrued defined pension benefit can’t be reduced but we believe that OMERS is doing just that with its rules for paramedic members’ transition to earlier retirement options,” said Hahn. “It’s our hope that this challenge will reverse OMERS rules that shortchange paramedics and ensure they have access to what they’re entitled to: earlier retirement options and a decent retirement.”
CUPE has raised these concerns with OMERS for months and has attempted to work with the pension fund on a solution.
CUPE represents more than 5,000 paramedics across the province. CUPE Ontario is the largest sponsor of OMERS, representing 125,000 plan members.
Background information
In OMERS, there are Normal Retirement Age 65 (NRA 65) members and Normal Retirement Age 60 (NRA 60) members. Normal Retirement Age (NRA) refers to the age you can receive an unreduced pension. There are different retirement rules for NRA 65 and NRA 60 members. NRA 65 members can retire with an unreduced pension at the earliest of age 65, or 30 years of service, or “90 factor”. The earliest retirement age for a NRA 65 member is age 55. NRA 60 members can retire with an unreduced pension at the earliest of age 60, or 30 years of service, or “85 factor”. The earliest retirement age for a NRA 60 member is age 50.
OMERS prohibited unions representing paramedics from negotiating earlier retirement options with employers from 2005 to 2020. Meanwhile, police and firefighters in the plan already had earlier retirement options for many decades. OMERS finally extended this right to paramedic members starting January 1, 2021. However, OMERS’ rules for transitioning paramedic members from NRA 65 to NRA 60 put members at risk of a reduced pension value.
FSRA is the independent pension regulator in Ontario whose mandate includes protecting pension benefits and administering pension law.
The intention of the Public Safety Occupation designation is described by the Canada Revenue Agency in the CRA External Technical Interpretation 2002-0119025.
NSTITUTIONAL INVESTMENT REPORTER PUBLISHED MAY 19, 2021
The union for Ontario public sector employees has renewed calls for an outside review of the Ontario Municipal Employees Retirement System, saying the pension’s 2020 loss is part of a long-term pattern of underperformance.
In response, OMERS said Wednesday that an independent review “is not warranted.”
The Canadian Union of Public Employees (CUPE) Ontario said that 2020 was “not just one tough year” for OMERS, which posted a negative 2.7-per-cent return in 2020. The union, which initially spoke out when OMERS released that result in February, issued a report Wednesday that suggests OMERS has underperformed its own internal benchmarks, as well as other large Canadian pension plans, for the past decade or more.
CUPE says OMERS’s 10-year return of 6.7 per cent is lower than seven other major Canadian pensions, whose returns over the period ranged from 8.5 per cent to 11.2 per cent. It’s also lower than the 10-year internal benchmark of 7.3 per cent. OMERS does not disclose the 10-year benchmark figure in its annual reports, which makes it different from the other plans, CUPE says. CUPE said OMERS provided the figure to the union.
The long-term underperformance can also be seen in the 10 years ended in 2019, indicating the issue is not solely the result of OMERS’s performance during the pandemic, according to CUPE.
CUPE has raised questions of OMERS management before, including a lengthy critique of its expenses after it announced its 2018 results. Fred Hahn, President of CUPE Ontario, said the union has engaged with OMERS management and “we kept being told everything would be fine ... we weren’t satisfied with that.”
Mr. Hahn and other CUPE members who appeared at a Wednesday press conference questioned whether benefits would ultimately be endangered.
“We care about this plan – we want to fix whatever’s going on, to provide our members with certainty,” said Yolanda McClean of CUPE’s Toronto Education Worker/Local 4400.
In a statement, George Cooke, the chair of the board of directors of OMERS Administration Corp., said the board, which is nominated by the employer and employee sponsors of the plan, “continually and thoroughly reviews investment performance, independent of management, utilizing external experts where appropriate.”
“Following the 2020 results specifically, we undertook a thoughtful look at our investment strategy and past decisions with an open mind,” Mr. Cooke said in the statement. “We are confident in our strong new leadership team and have concluded that our current investment strategy is appropriate. An additional third-party independent review is not warranted.”
CUPE Ontario represents 125,000 of the pension’s 289,000 active members. Two CUPE researchers authored the report, which was reviewed by PBI Actuarial Consultants of Vancouver. “Overall, we believe the analysis is sufficient to conclude that OMERS investment performance in 2020 and longer term is significantly lower than other comparable plans,” wrote Bradley Hough of PBI.
In 2020, OMERS’s real estate investments posted an 11.4-per-cent loss, while the value of its private equity portfolio declined by 8.4 per cent. Its performance also suffered from being heavily invested in dividend-paying oil and gas and financial-services stocks and underweight in technology companies. The fund’s benchmark was a gain of 6.9 per cent, so it underperformed by 9.6 percentage points, the biggest margin of the past decade, according to CUPE.
