British Columbia’s pension management arm saw its assets grow by over $11-billion last year after a timely adjustment to its portfolio to favour global stocks.
British Columbia Investment Management Corp., which manages money for public sector pension plans and public trusts in B.C., said its assets climbed to $114-billion as of March 31 from $102.8-billion a year earlier, due to strong 14.7-per-cent returns that outpaced passive benchmarks. BCIMC is Canada’s fourth-largest pension fund manager.
Chief executive officer Doug Pearce said the fund reduced the percentage of the fund invested in bonds while increasing its non-Canadian stock portfolio last year, which paid off as long-term interest rates rose and global stock markets soared.
“Overweighting global equities and underweighting fixed income were the main drivers of the double-digit returns,” Mr. Pearce said in a release Thursday. “We feel the global economy will continue to improve and we are optimistic about our portfolio in the year ahead.”
BCIMC said it has just 22 per cent of its assets in fixed-income holdings such as bonds, while public equities account for 47.6 per cent of the portfolio. The fund has 2.6 per cent of its money invested in mortgages, 4.8 per cent in private placements, 17.4 per cent in real estate and 5.6 per cent in renewable resources and infrastructure.
BCIMC previously announced plans to set up its first foreign offices in London and Singapore to further expand its global investment portfolio.
The pension manager said it has earned a 15-year annualized return for pension clients of 7 per cent, and a five-year return of 11.4 per cent.
BCIMC said its 14.70-per-cent return in fiscal 2014, ended March 31, exceeded its passive benchmark of 12.5 per cent last year, which means it earned returns above basic market levels that could be achieved without active asset management.