Alberta Investment Management Corp., Canada's newest provincial money manager, wants to adopt the aggressive investment strategies popular among its peers, and has hired a top-tier money manager as its first chief executive officer.
Four-month-old AIMCo - which was created to manage Alberta government money - has hired Leo de Bever as its first chief executive officer. He is a well-known Canadian fund manager who was a senior executive at Ontario Teachers' Pension Plan and Manulife Financial Corp. and is currently chief investment officer at one of Australia's large public pension fund managers.
"We're so pumped to have him," said George Gosbee, vice-chairman of AIMCo and head of Tristone Capital, a Calgary investment bank.
"Ontario Teachers is a great model and Leo having spent 10 years there, we're happy to have him on board, to help give us the same type of stature."
AIMCo, like other public funds, plans to go beyond the traditional investments in blue-chip equities and bonds to seek higher returns in areas such as private equity and infrastructure projects. With $75-billion in assets, it is among the biggest funds in the county.
It has already been part of syndicates financing several major recent deals, including the $7.4-billion (U.S.) purchase of Puget Energy Inc., the largest utility in Washington state, and the $2.6-billion (Canadian) privatization of CCS Income Trust.
On its own, AIMCo is backstopping a proposed, sprawling $3-billion real estate development in northeast Calgary.
Mr. de Bever said categories such as infrastructure and real estate make sense for long-term investors such as AIMCo - though he questioned the high valuation of today's available investments.
"If you run an organization for the long run, you can afford to take certain risks," Mr. de Bever said in an interview.
The Alberta government is also considering increasing exposure to more aggressive assets classes, such as emerging markets equity.
The addition of a CEO, especially one as respected as Mr. de Bever, is a big step forward for AIMCo, industry rivals say.
"The Alberta fund is going to be a global force, in the same way that Teachers and the Caisse [Caisse de dépôt et placement du Québec]make everyone's list of international players, because they've got the assets and the ambition," said a private sector pension fund CEO.
While AIMCo is the No. 5 manager of public money in Canada, it is not quite the same as Teachers or the Canada Pension Plan Investment Board, which manage a single portfolio. AIMCo is the overseer of numerous Alberta government funds, including seven public sector pension plans. The best known is the Heritage Savings Trust Fund, accounting for a fifth of the $75-billion under management.
The Alberta government sets out the portfolio allocations - what percentage of money goes to certain types of investments - and AIMCo decides where to invest the money.
The province is pondering putting more of the $17-billion Heritage fund in emerging markets equity, private real estate and infrastructure, a decision the Finance Minister is expected to make soon.
Charles Baillie, the retired CEO of Toronto-Dominion Bank, is chairman of AIMCo and wants it to be "at the forefront of fund management in Canada and globally," though he concedes the endeavour is still at an "embryonic" stage.
Mr. Baillie suggested AIMCo could eventually take on deals on a scale similar to the privatization of telecommunications giant BCE Inc., which was led by Teachers.
He noted that the Alberta government's practice of taking the investment income from its funds and putting it in general revenue has hurt the Heritage Fund.
The only cash the Alberta government has put into the Heritage Fund in recent years is money to protect it from inflation, coming after years of putting nothing at all in the fund, which was started in the 1970s by former premier Peter Lougheed. The fund has badly underperformed its counterpart in Norway.
"The Heritage Fund, unlike its Norwegian counterpart, has not enjoyed compounding - one of the most basic benefits of savings," Mr. Baillie said.