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October 26, 2021

CLIMATE CHANGE STATEMENT SIGNED

Citing their fiduciary responsibility, 36 institutional investors managing $5.5 trillion in assets have signed the Canadian Investor Statement on Climate Change. The statement, signed by asset management divisions of five of Canada’s largest banks along with major institutional investors such as the Ontario Pension Board, calls on companies to act on material climate risks including through their industry association and lobbying activities. Co-ordinated by the Responsible Investment Association (RIA), the statement also makes clear the actions major Canadian investors will take to advance the global pursuit of net zero ahead of the most important climate gathering in history – COP26. This includes disclosing their financed emissions and setting an expectation that their investees will establish emissions targets and report on their progress.

October 26, 2021

POSITIVE RETURN POSTED

In the third quarter of 2021, diversified pooled fund managers posted a median return of 0.7 per cent before management fees and eight per cent since the beginning of the year, says the LifeWorks ‘Performance Universe of Pension Managers’ Pooled Funds.’ “The financial position of pension funds has improved since the start of the year. We estimate that the solvency ratio of an average pension fund increased by around 8.8 per cent in the first three quarters of the year,” says Jean Bergeron, partner for the investment and risk consulting team at LifeWorks. Managers obtained a median return of negative 0.3 per cent on bonds (Universe mandate), which was 0.2 per cent higher than the benchmark index. Short-term, mid-term, and long-term bond indices posted returns of 0.1 per cent, zero per cent, and negative 1.6 per cent, respectively. The high-yield bond index posted a return of 1.3 per cent, while the real return bond index provided a negative 0.3 per cent return. The median return for Canadian equity managers was 1.1 per cent, which was 0.9 per cent higher than the 0.2 per cent posted by the S&P/TSX Index.

October 26, 2021

INCREASE IN DIVERSIFICATION PLANNED

Over half (53 per cent) of professional investors believe that over the next two years, institutional investors will look to dramatically increase the level of diversification in their portfolios and a further 40 per cent think there will be a slightly greater focus on this. A Nickel Digital Asset Management report says as part of their plans to diversify, the majority of respondents expect institutional investors to increase their exposure to alternative asset classes over the next two years. Some 42 per cent of professional investors surveyed said they expect institutional investors to ‘dramatically’ increase their exposure to cryptocurrencies between now and 2023. This can partly be explained by the fact that many institutional investors are still testing the cryptoassets/digital market and either have very small holdings here, or none at all.

October 26, 2021

BRAZILIAN ENERGY ASSETS CONSOLIDATED

Votorantim S.A. and Canada Pension Plan Investment Board (CPP Investments) plan to consolidate several Brazilian energy assets and create a new combined company to be listed on the B3 Stock Exchange. The asset consolidation and public listing will be conducted by way of two independent transactions. In the first transaction, an existing Votorantim Energia and CPP Investments joint venture called VTRM will acquire and consolidate both companies’ equity shares in a variety of renewable energy assets. This includes electricity producer Companhia Energética de São Paulo (CESP), VTRM’s existing wind and solar assets, Votorantim Energia’s shares in hydro power assets and Votorantim Comercializadora de Energia, in addition to several projects that VTRM is currently developing. In the second transaction, the joint venture submitted a proposal to CESP’s board of directors to merge CESP’s shares into VTRM and further consolidate assets.

October 26, 2021

FOX CARNEY JOINS WILLIS TOWERS WATSON

Diana Fox Carney is a strategic adviser in the climate resilience hub at Willis Towers Watson. She joins the climate, resilience, and ESG (environment, social, and governance) solutions teams serving corporates and public sector institutions in North America and worldwide. Previously, she led research at the IPPR think tank and was executive director of Pi Capital.

October 26, 2021

INVESTOR BEHAVIOUR EXAMINED

Shareholder theory has evolved over the past 50+ years and how this awareness is changing investor behaviour will be examined at the Benefits and Pensions Monitor Meetings & Events ‘Pension Investment Trends.’ Catherine Jackman, head of institutional sales, and a portfolio manager at Cidel Asset Management, will offer ‘Considerations for Pension Plans: Understanding the Evolving Role of Corporate Values and Impact on Returns.’ Steven Marino, executive vice-president, po