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Upstart firm snags CPPIB’s chief strategist

Canada Pension Plan Investment Board chief strategist Don Raymond is moving to Alignvest Management Corp., trading a top job at one of the world's most powerful money managers to join a roster of high-profile hires at a much smaller firm.

The executive will be leaving CPPIB for a new firm that is barely three years old, the parties announced on Wednesday.

Alignvest is a Toronto-based firm that has steadily attracted big names in its short time on the scene, with one of the draws the possibility of owning a piece of a new fast-growing operation.

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One of the managing partners, with Alignvest founder Reza Satchu, is Tim Hodgson. For years, he ran Goldman Sachs Group Inc.'s Canadian offices. After that, he was a special adviser to the Bank of Canada. The firm has also drawn a hedge fund management team from Gluskin Sheff + Associates Inc., for example.

At CPPIB, Mr. Raymond helped create the framework for how the pension fund would put to work the billions of dollars flowing in each year. At Alignvest, which is a fraction of the size, he will use those skills to aid clients as they try to design portfolios for maximum returns with low risk. That includes making asset allocation decisions and helping them choose money managers.

"He has a skill set around building an investment organization and thinking about the way in which a portfolio should be designed and the way assets should be allocated that people definitely need," said Mr. Satchu.

Mr. Raymond spent 13 years with CPPIB, a time when it soared in size. He was the first employee in the pension fund's public markets group, which grew from $11-billion to $100-billion during his time.

Four years ago, he moved into the chief investment strategist role. One of his big accomplishments was building CPPIB's "total portfolio approach," a way of looking at the whole fund to allocate risk by each individual asset, rather than looking at whether the asset fit into a traditional bucket, such as "equity" or "debt."

CPPIB will have plenty of time to choose a replacement.

Mr. Raymond, who was not available for an interview, approached CPPIB chief executive officer Mark Wiseman late last year about the opportunity. He will officially depart at the end of March and join Alignvest on April 1. The departure is "extremely amicable," Mr. Wiseman said. He said he expected no reorganization as a result of the move.

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Mr. Raymond is "one of the key pillars of CPPIB since the very early days," Mr. Wiseman said. "Having said that, as an organization, we are in a very, very different place than we were six or seven years ago. We have built deep and strong capabilities. He has a team of over 50 people. It is a loss to the organization, but at the end of the day, no one, including me, is so integral to the organization that it will have a material impact."

Mr. Wiseman said he has "very mixed emotions." He knows Mr. Satchu and Mr. Hodgson well – they have collaborated on a project to develop young Canadian entrepreneurs – and he introduced Mr. Raymond to Mr. Satchu.

"At a personal level, I'm excited for him. It's a chance for him to do something entrepreneurial."

Mr. Satchu echoed that. "People are leaving big jobs, fantastic jobs, where they are getting paid very well for work they are doing and they are coming here to really become owners and to satisfy that entrepreneurial desire to build something," he said. "Don Raymond is a prime example of that."

At CPPIB, Mr. Raymond was helping to run almost $200-billion. Alignvest, while growing, started with just $275-million from its partners.

The firm offers products such as asset-backed lending fund, hedge fund products and it owns a fixed-income broker dealer called KGS-Alpha Capital Markets. "Our ambition is to be a global alternative asset management company," Mr. Satchu said.

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