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December 21, 2021

INFORMATION OVERLOAD MANAGED

Advancements in artificial intelligence (AI) specifically in natural language processing (NLP) and sentiment detection are making it possible to manage information overload, says AIMCo. In the article ‘AIMCo Infrastructure Team Experiments with Open-Source Solutions,’ it says these advancements allow investors to cast a wider net across a broader range of text-based information sources to stay better informed of developing trends. These tools not only allow more efficient coverage of various sources, but also enable the seamless ability to drill down into details to better assess the underlying context of each situation. Such NLP capabilities provide the ability to dig deeper by helping to flag risks and opportunities that might otherwise be made less visible given the potential impact of cognitive biases. The practical applications of NLP for AIMCo include the identification of emergent trends within environmental, social, and governance (ESG); energy transition; and digital infrastructure. Its infrastructure team’s limited proof of concept appears to validate what can be done with NLP tools even without finetuning or enhancing current open-source models. The team is currently exploring both internal solutions and external providers to provide operational versions of such tools which would provide the capability to better identify trends and find further insights necessary to make better investment decisions.

December 21, 2021

CDIPC HELPS 28,000 CANADIANS

Based on its 2020 results, the Canadian Drug Insurance Pooling Corporation’s (CDIPC) high-cost drug framework provided coverage to almost 28,000 Canadians and their families where drug costs exceeded $10,000 annually. While only 11 new biologic drugs were approved by Health Canada in 2019, CDIPC’s member insurance companies reimbursed claims associated with 54 new high-cost drugs including those for rare diseases. It estimates that approximately 174,000 Canadians face a high-cost drug burden, an increase of 34 per cent since 2016.

December 21, 2021

PRIVATE EQUITY SECONDARIES OFFER REVENUE STREAM

A number of large, multi-platform asset managers in Europe have recognized that private equity secondaries present a fast-growing, profitable opportunity to create an additional revenue stream, says Cerulli Associates. “This extra revenue stream can be leveraged via the same relationships and distribution networks that managers tap for their primary investing fundraising and it provides clients with more a more comprehensive product offering in private markets,” says Justina Deveikyte, director of European institutional research. One of the main factors driving the number of managers with dedicated secondary investment programs in 2021 is the continued rise in assets under management of private assets and the related liquidity needs as investors seek to generate superior risk-adjusted returns. As more investors invest in private markets, the opportunity set of secondary buyers ‒ primarily liquidity before a fund’s liquidation via trade sales and IPOs ‒ increases, prompting more private asset managers to enter the market. Several managers that have historically raised capital for buyout funds have now entered the secondary market. Also, many secondary market practitioners left established firms to set up their own operations.

December 21, 2021

COMMUNICATIONS CHANNELS CREATE GAPS

Financial service firms are spending more than ever on surveillance technology, but the explosion of new communications channels like Zoom and Microsoft Teams could be creating dangerous gaps in the compliance infrastructure, says a Coalition Greenwich report. From a compliance perspective, financial service firms faced their biggest-ever challenge during the industry’s historic transition to remote working environments in 2020. The industry has risen to that challenge by investing in the technology and processes required to extend their internal compliance frameworks to remote locations. Market-wide, budgets for surveillance technology are estimated to have expanded by over 15 per cent in 2021 and are expected to surpass $1.5 billion in 2022. However, even as financial service firms upgraded their capabilities, employees working from home and now back in the office are embracing new communications channels. The proliferation of videoconferencing, video chat, and other new channels creates the risks of gaps or ‘black holes’ in communications surveillance that could leave firms vulnerable.

December 21, 2021

CDPQ COLLABORATES ON SUSTAINABLE ENERGY

The Caisse de dépot et placement du Québec (CDPQ) and bp ventures will collaborate on targeting ventures in the sustainable energy sector. Their first joint investment, BTR Energy, is a cleantech company enabling electric vehicles to interact with electricity markets. As part of this three-year collaboration, they will share investment opportunities and industry knowledge, with a focus on innovations that can accelerate the energy transition. Examples of areas of interest include mobility electrification, deployment and adoption of renewable energy, batteries, biofuels, and more.

December 21, 2021