Alberta Investment hires ex-Goldman banker David Scudellari as foreign chief

Layan Odeh, Bloomberg News
Jan 9, 2023

Alberta Investment Management Corp. hired David Scudellari as head of international investment and to lead a credit partnership with another large Canadian pension fund.

Scudellari will oversee foreign expansion, credit and private debt, and management of key external relationships, according to a statement Monday. He’ll also act as vice-chair of Aimco’s investment committee. 

“We’ve been rebuilding our executive team. David represents kind of the last arrow on our quiver,” Aimco Chief Executive Officer Evan Siddall said in an interview. Scudellari will be based in New York as part of the manager’s plan to gain access to more deals outside of Canada.

Aimco, which invests on behalf of 32 pension, endowment and government funds in the oil-rich Canadian province, named Siddall as its CEO in 2021 after it lost $2.1 billion on a bet against market volatility that blew up when the COVID pandemic hit. Siddall has since overhauled the executive team, hiring a new chief risk officer, a technology officer and recently tapping Marlene Puffer as chief investment officer.

CREDIT PACT

Aimco is also forming a partnership with Canada’s Public Sector Pension Investment Board to invest in loan transactions sourced by PSP, allowing both pension funds to grow their credit portfolios, according to a joint statement.

Scudellari — who spent 23 years at Goldman Sachs, according to his LinkedIn profile — had worked at PSP since 2015, most recently as global head of credit and private equity, before accepting the Alberta job.

Aimco will be able to take advantage of PSP’s team as “we continue to build our own capabilities and our scale will help them continue to source the deals,” Siddall said. “David knows those people, he knows their processes, he knows how to diligence things.”

The Alberta fund has $6.1 billion in private credit assets; PSP has nearly $22 billion.

Private credit has grown rapidly into a US$1.4 trillion asset class, becoming a magnet for investors searching for higher yields and for companies and buyout firms that need to borrow and are unable to tap banks.

“This partnership with Aimco puts together two like-minded, long-term principal investors that can address this exciting market opportunity,” Deborah Orida, PSP’s new CEO, said by phone. The Montreal-based fund could do more with Aimco or other pension plans in the future, she added.

NEW APPOINTMENTS

PSP elevated two senior executives to lead credit and private equity investments following Scudellari’s departure.

Oliver Duff will take on the role of global head of credit investments, while Simon Marc will lead private equity and strategic partnerships, according to statement.

PSP manages pension money for Canadian federal civil servants, the military and police force and had C$230.5 billion of net assets under management as of March 31. 

West Fraser Timber to indefinitely curtail Florida sawmill

The Canadian Press

Jan 10, 2023

West Fraser Timber Co. Ltd. says it will indefinitely curtail its Perry Sawmill in Florida later this month due to high fibre costs and softening lumber markets.

The Vancouver-based company said in a press release that the indefinite curtailment will affect around 126 employees.

However, West Fraser says it will try to mitigate the effect on workers by providing work opportunities at other West Fraser operations.

It says the curtailment will reduce the company's U.S. lumber production by 100 million board feet.

The company says high fibre costs and a low-price commodity environment have impaired its ability to operate the sawmill profitably.

It says it anticipates an impairment charge in the fourth quarter of 2022 associated with the curtailment.

 LCBO continues to investigate cybersecurity incident; site and mobile app still down

The Canadian Press

Jan 11, 2023

The Liquor Control Board of Ontario says it is continuing to investigate a "cybersecurity incident" that has knocked out its website and mobile app since Tuesday. 

The provincial Crown corporation says in a brief statement on Wednesday that its website and mobile app remain unavailable.

The LCBO says its shops are open to customers as they were unaffected. 

The latest incident comes as Toronto's Hospital for Sick Children continues to recover from a December ransomware attack, with the hospital saying it had restored about 80 per cent of its priority systems as of last week. 

A notorious ransomware group later apologized for that attack, claiming it was carried out by one of its partners. 

Ontario's Cybersecurity Expert Panel concluded in a September report that the broader public-services sector needed more work to achieve "cyber maturity."

CRIMINAL CRYPTO CAPITALI$M

FTX advisers have found US$5B cash or sellable crypto

Silla Brush, Bloomberg News

Jan 11, 2023

FTX Group advisers have found more than US$5 billion in cash or crypto assets that it may be able to sell to help repay creditors, a lawyer for the company told the judge overseeing the biggest crypto bankruptcy.

The company is working to monetize assets with a book value of US$4.6 billion, company attorney Andrew G. Dietderich said in federal court in Wilmington, Delaware on Wednesday. Advisers have also found a large amount of other crypto assets that are illiquid and therefore harder to sell, he said.  

Advisers for the failed crypto exchange have been sorting through the wreckage left behind by its founder, Sam Bankman-Fried, since the company collapsed into bankruptcy in November. FTX’s books and records ranged from messy to non-existent prior to its implosion, its new chief executive officer has said. 

FTX advisers have identified more than 9 million customer accounts, Dietderich said. The company doesn’t yet know how much money creditors will get back, or what percentage of their debts will be repaid, he said. The company has also identified about 120 billion transactions that had been handled on FTX platforms before they were shut down, he said.

CUSTOMER NAMES

The company was in court Wednesday to ask US Bankruptcy Judge John T Dorsey for approval of a handful of routine motions and also to keep the names of its 9 million creditors and customers secret.

Dorsey agreed with the company’s argument that the customer names could be considered a valuable trade secret. Customer lists are often sold in bankruptcy cases in order to raise money to repay creditors.

A group of media outlets, including Bloomberg News, had argued that the names should be released. 

Dorsey opened the hearing by announcing he had received a letter from four US senators urging him to appoint an independent examiner to investigate FTX. The group argued that FTX lawyers may have conflicts that would make it difficult for them to conduct an independent probe. 

Dorsey said the letter would not influence him.

“It is an inappropriate ex parte communication,” Dorsey said, referring to the term used for communicating with a judge without informing anyone else in a case. “It will have no impact on my decisions.”

The bankruptcy is FTX Trading Ltd., 22-11068, US Bankruptcy Court for the District of Delaware. 

Flexible work, cheaper child-care give women workers a boost

Holly McKenzie-Sutter, BNN Bloomberg

Flexible work arrangements and more affordable child-care may be behind record-high employment rates recorded last year among Canadian women, experts said after federal jobs data showed a big bump in the rate of working mothers.

Statistics Canada’s Labour Force Survey, published last week, offered fresh evidence that women in Canada are bouncing back from the job losses that disproportionately affected them when the COVID-19 pandemic set in.

The survey reported that 81 per cent of Canadian women aged 25 to 54 were employed on average over the course of 2022. That’s the highest on record since 1976 and higher than the last pre-pandemic year in 2019.

StatsCan also noted an uptick in the employment rate for women with children under age six. Mothers with young kids were working at a rate of 75.2 per cent in 2022, a rate 3.3 per cent higher than what was recorded in 2019.

Carmina Ravanera, senior research associate at the University of Toronto’s Institute for Gender and the Economy, said fears of a “she-cession” were well-founded based on data available earlier in the pandemic. But she said the pandemic-driven rise of flexible and remote work arrangements has likely been particularly beneficial for female workers, as women tend to take on more caregiving responsibilities within families.

“We researchers have been talking for years about how important flexible work is for women,” Ravanera said in a phone interview with BNNBloomberg.ca. “It allows them to have that time to care give while also being in the paid labour force, and they don't have to work the nine to five, or always be in an office.”

Parisa Mahboubi, senior policy analyst with the C.D. Howe Institute, also highlighted the rise of flexible work as a key factor behind a higher women’s employment rate, adding that flexible work for men may have freed male partners up to contribute more to child-care duties, giving mothers more support as they re-enter the workforce.

The tight labour market in 2022 also offered an opening for women to negotiate for better-paying jobs or starting in new fields of work, Mahboubi added. Some women may have used remote learning opportunities during the pandemic to gain new employment skills, she said, and the higher cost of living could have motivated some families to seek a second income.

“For some families it could be just one or two factors, for some others, it could be a combination of all,” she said.

Ravanera and Mahboubi both pointed to the policy shift towards cheaper child-care in Canada last year as another factor behind a higher women’s employment rate. Fees were reduced last year as the federal Liberal government began phasing in its affordable child-care plan, with an end goal of reaching $10-a-day care in 2025.

“I think that definitely played a role and we'll probably, hopefully, see more of that in the coming years as reductions increase,” Ravanera said.

Silvia Song of Vaughan, Ont., returned to work part-time as a manager at a meal subscription company just over a year ago in December 2021, when her children were aged three and two.

Song was eager to start working again to bring more adult routines back into her life. She said the change has been positive, though much of her pay goes towards covering child-care, which she described as “key” for her being able to return to work.

“My kids were driving me nuts. I need to talk to adults,” she said in a phone interview. “Basically, all my money goes to my nanny, but it gets me out of the house.”

Song also credited her flexible, mostly-work-from-home arrangement and her understanding boss as factors behind her smooth transition back into the workforce. Her husband runs his own business, taking some pressure off her need to earn income for essentials.

“I'm very thankful that I'm not in a position where if I miss a shift, I can't pay for groceries,” she said.

Ravanera cautioned that the quality of women’s jobs and inequalities like gender pay differences should be considered when reading the jobs data, noting that women are still more likely to be in precarious or part-time jobs.

Mahboubi said persistent gaps between women’s and men’s earnings other employment criteria require more scrutiny, especially as Canada faces a shortage of workers.

“All these gaps have declined over time, which is good news, but still, we can do more in the labour market to make sure that women participate fully,” she said.

Canadian Pacific Railway and Unifor reach tentative deal for 1,200 workers

The Canadian Press

Canadian Pacific Railway Ltd. and Unifor have reached a tentative collective agreement for 1,200 workers who are responsible for maintaining rail cars and locomotives.

The company and the union say details of the tentative contract will not be released publicly until the agreement has been ratified.

Unifor says it will provide members with information in the coming days on ratification meetings, which will be held at multiple locations across the country.

The contract covers workers at 18 locations from British Columbia to Quebec.

The union says negotiations with the railway had been ongoing since September. 

The previous collective agreement expired on Dec. 31.

This report by The Canadian Press was first published Jan. 13, 2023.

South Korea Bets Big On Nuclear Energy At The Expense Of Renewables

By Tsvetana Paraskova - Jan 12, 2023

South Korea will rely more on nuclear power generation in its efforts to reach net zero by 2050, according to its latest plan, which envisages a lower share of renewable power generation in the electricity mix.  

South Korea will aim to have nuclear energy account for nearly one-third of its electricity generation capacity by 2030, while renewables are set to meet 21.6% of power demand, down from a previous forecast of just over 30%, per government documents released on Thursday and quoted by Bloomberg.

In earlier plans, South Korea was targeting a 24% share of nuclear power generation capacity.

Currently, 25 reactors provide about one-third of South Korea’s electricity from 23 GWe of plant, according to the World Nuclear Association.

President Yoon Suk-yeol, elected in March 2022, scrapped his predecessor’s policy to phase out nuclear energy over some 45 years. The new president has set a target for nuclear to provide at least 30% of the country’s electricity in 2030.

South Korea’s latest plan also calls for a lower share of LNG in the power generation mix as part of the country’s net-zero targets, as many countries have moved to bolster their energy security after the Russian invasion of Ukraine and the market turmoil that followed.

Since the Russian invasion of Ukraine, many Western allies of the U.S. and the EU have stepped up efforts to ensure energy security and depend less on energy commodities. Many of those have chosen to rely more on nuclear energy.

Just this week, Sweden’s government proposed changes in the current legislation to allow the construction and operation of more nuclear reactors as it looks to strengthen its energy security.

Even Japan is bringing back nuclear power as a key energy source, looking to protect its energy security in the crisis that has led to surging fossil fuel prices. The Japanese government confirmed in December a new policy for nuclear energy, which the country had mostly abandoned since the Fukushima disaster in 2011. A panel of experts under the Japanese Ministry of Industry decided that Japan would allow the development of new nuclear reactors and allow available reactors to operate after the current limit of 60 years. 

WHY GAS RATES AND INFLATION INCREASE

UK

Centrica Predicts Almost Eightfold Increase In Full Year Profits

By City A.M - Jan 12, 2023

British Gas owner Centrica has predicted a near eightfold increase in its full-year profits, powered by soaring energy prices last year following Russia’s invasion of Ukraine.

The energy giant now anticipates earnings of 30p per share, way above analyst expectations of 22p per share compiled by Bloomberg.

Centrica attributed its strong uptick in performance to robust trading across its electricity generation assets alongside gas production from fields in the North Sea.

Investors have responded positively to the bullish update, with shares up 5.12 per cent on the FTSE 100 in this morning’s trading – rising to levels not seen since May 2019.

This also makes it the fastest riser on London’s premier index and follows Centrica’s shares gaining 53 per cent during 2022

Centrica’s anticipated mega earnings reflect a sharp turnaround in performance since the pandemic.

Alongside rival energy firms, it suffered billions in losses in 2020 when the pandemic struck – which left raw energy prices at lows not seen in modern times, with oil dipping below $0 per barrel.

It showed signs of recovery the following year, as the energy firm generated earnings of four pence per share and a pre-tax profit of £761m in 2021.

The company now predicts closing net cash for 2022 to be above £1bn and said that it had “continued to deliver strong operational performance” since its last trading update in November.

Last November, Centrica launched a £250m share buyback – its first since 2014, cementing its return to conventional operations.

This reflects soaring oil and gas prices following Russia’s invasion of Ukraine, amid a Kremlin-backed supply squeeze on the continent alongside shortages driven by Western sanctions on Moscow.

Prices have since eased but remain historically elevated compared to pre-crisis levels.

Centrica has enjoyed a sharp upturn in performance on the FTSE 100 over recent months (Source: London Stock Exchange)

British Gas struggles remain amid industry crisis

While Centrica’s energy production has powered bumper earnings, its retail energy arm British Gas has not been raking in profits – with margins still tight amid record wholesale costs over the past 12 months.

The retail arm has suffered from the rise in wholesale costs, and Centrica’s business supplying homes with gas and electricity is widely expected to make a loss in the second half of the year.

British Gas last year revealed it would donate 10 per cent of its profits to help its poorer customers manage rising gas and electricity bills for the “duration of the energy crisis”.

Centrica does face key headwinds this year, such as a 45 per cent levy on electricity generators which began this month.

This levy will hit both its green energy projects and its 20 per cent stake in Britain’s nuclear fleet.

It also has now sold its Norwegian oil and gas assets to Spirit Energy and will no longer be able to raise revenues from assets it has previously banked on.

Centrica is set to unveil its fourth quarter and full-year results next month.

The third quarter profits of the world’s biggest oil and gas companies (Source: Reuters)

By CityAM

Dutch Power Grid Warns Of Shortages By End Of Decade

By Julianne Geiger - Jan 12, 2023

Electricity shortages are possible in the Netherlands by the end of this decade, Dutch power grid operator TenneT said on Thursday, in what is just the latest forecast for power outages.

While media has spoke of near-term power outages in Europe that could hit this winter or next, TenneT is eyeing energy shortfalls near the end of the decade—a side effect of the ongoing switch away from fossil fuels and towards renewables.

TenneT said that while the switch away from fossil fuels will drive power demand, power generation is growing increasingly weather dependent, with disruptions likely.

As production processes switch to electric and Europe sees to the closure of many of its flexible power plants that run on fossil fuels, including coal, international supply will become more uncertain, TenneT said on Thursday, according to Reuters.

TenneT sees domestic supply as sufficient to meet the demand for the next couple of years. But towards the end of the decade, the power landscape looks increasingly shaky.

Tennet said these shortages could be prevented by increasing the flexibility of electricity supply and demand, for starters. Other measures that will be required to stave off power outages are technological advancements in finding ways to store power from renewable energy such as wind and solar, and expanding connections with British and Scandinavian grids.

The Dutch Council of Ministers approved plans to build two new nuclear power plans last month, with completion scheduled for 2035. The nuclear power additions are expected to supply between 9 and 13% of the Netherlands’ total electricity needs. The plants have a combined price tag of $5.34 billion. The notion of small modular reactors in the Netherlands also hasn’t been entirely dismissed.

Head Of Saudi Wealth Fund Will Not Testify In Defense Of Elon Musk

By Michael Kern - Jan 13, 2023


The governor of the Public Investment Fund, Saudi Arabia’s $620-billion sovereign wealth fund, will not testify in defense of Elon Musk in an upcoming trial brought by Tesla investors alleging Musk defrauded them with the 2018 tweet that funding for taking the EV maker private is “secured.”

Last week, lawyers for Musk tried to subpoena Yasir Al-Rumayyan, the governor of the Public Investment Fund (PIF), to force him to testify in the trial slated to begin in San Francisco on January 17.

Investors in Tesla are suing Musk for misleading and defrauding them after tweeting in August 2018, “Am considering taking Tesla private at $420. Funding secured.” The tweet sparked wide speculation and wild swings in the share price of Tesla, while a deal never happened, although Musk has claimed he had a handshake deal with the Saudis to help fund taking Tesla private.

Now lawyers for Al-Rumayyan and other PIF officials said that the ‘subpoena’ from the Musk lawyers doesn’t have any bearing and in no way obliges the Saudis to be in court to testify in the trial.

Subpoenas “need not be complied with,” according to a filing by the lawyers for the fund, cited by Bloomberg. Those documents are “legally deficient,” they say, and they are not in the jurisdiction of the San Francisco court.

The request for testifying was voluntary, lawyers for the Saudi sovereign wealth fund said.

“In other words, even defendants describe the subpoenas as having no force or effect,” they wrote in the filing.

Text exchanges between Musk and Al-Rumayyan, revealed in court filings last year, showed that Tesla’s chief executive believed he had the “funding secured” to take the company private. But Al-Rumayyan told Musk that the Saudi fund couldn’t commit to an investment without sufficient information and that the fund and managers had been waiting for more details.