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Daily News Alerts

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January 11, 2023

OCIO Use Explodes

A Vanguard survey has found that corporate defined benefit pension fund usage of outsourced investment has exploded in the past decade, with 49 per cent of respondents saying they employ an OCIO (outsourced chief investment officer) service, compared to 33 per cent only four years ago. “From 2015 to 2021, the global OCIO market nearly doubled: from $1.3 trillion assets under management to more than $2.5 trillion, with defined benefit pension plans representing the largest share of the OCIO market,” it says. The top reasons given for the usage of OCIO services is no longer “having insufficient internal resources” to properly steward investments, as it was in previous iterations of the survey. Instead, respondents are using OCIO services due to the attractive cost/fee structure of OCIO services and the ability to maintain internal control over investment decisions.

January 11, 2023

AIMCo, PSP Investments In Loan Sourcing Agreement

Alberta Investment Management Corporation (AIMCo) will invest in loan transactions sourced by the Public Sector Pension Investment Board (PSP Investments), positioning the organizations for stronger market presence. Under a loan sourcing agreement, PSP Investments will source loan investment opportunities for funds earmarked by both organizations. This collaboration will allow both organizations to grow their respective credit investment portfolios. AIMCo started investing in private credit in 2010 and currently manages C$6.1 billion and has committed $12.5 billion of capital since inception. PSP Investments launched its credit investment practice (formerly known as private debt investments) in November 2015 and manages C$21.9 billion in net assets under management.

January 11, 2023

Smart Beta Investing Sees Uptick

Amid a challenging market environment featuring underlying macroeconomic instability, smart beta or factor-based investing has seen an uptick in European investor interest, says Cerulli Associates. The economic backdrop of low or negative growth, combined with stagnant wages and higher inflation, has created improved conditions for smart beta approaches based on fundamentals such as value or dividends. Assets under management (AuM) of fundamental-tilted funds have been more stable than those of traditional strategies. By November 2022, European smart beta exchange-traded funds (ETFs) had €93.7 billion in AuM, compared to €102.1 billion in December 2021. Value has been a standout factor this year in terms of both performance and flows, relative to market cap funds. Total net European monthly inflows into value funds reached €15.1 billion for October 2022, not far off the €15.8 billion for December 2021. “Value strategies’ outperformed traditional market-cap-weighted ones in 2022, largely due to their energy overweight,” says Fabrizio Zumbo, director, European asset and wealth management research, at Cerulli Associates. “Quality strategies did worse than value strategies in 2022, but as they tend to do better during recessions, they could potentially outperform in 2023.”

January 11, 2023

Crosslinks Acquires BBC

The operations of the Benefits Breakfast Club (BBC) and the Benefits and Private Healthcare Associate (BPHA) program have been acquired by Crosslinks, says Denise Balch, president of Connex Health. She will work with Crosslinks and continue to be active in the BBC and BPHA program during a multi-year transition with a goal to reach a wider audience, provide greater value, and enhance workplace wellness through their combined operations.

January 11, 2023

Ontario Teachers’ Part Of Acquisition

GPA Global has acquired Cosfibel Group, a provider of luxury promotional packaging, luxury gifting, and merchandising solutions. It has worked with premium and high-luxury brands including L'Oréal, Chanel, LVMH, Rémy Martin, and Damman. Based in France, with global service centres in 16 locations, and working across verticals such as beauty and personal care, wine and spirits, and fine foods, its client list shows over 70 global brands. The acquisition of Cosfibel is the second major acquisition by GPA with Ontario Teachers' Pension Plan Board (Ontario Teachers'). Ontario Teachers' acquired a co-control stake in GPA in September 2022.

January 11, 2023

Gopwani Has New Role

Ashwin Gopwani (FSA, FCIA, CFA) is managing director and head of retirement solutions, North America, at SLC Management. He joined Sun Life in 2017. In this new role, he continues to be head of Canadian client solutions for SLC Management.

January 11, 2023

DC Topics Discussed

The Association of Canadian Pension Management Ontario Region will discuss ‘DC Plan Hot Topics 2023.’ Ross Gascho, a partner at Fasken, and Jillian Kennedy, a partner and Canadian leader of defined contribution and financial wellness at Mercer (Canada) Limited, will examine topics such as the proposed CAPSA (Canadian Association of Pension Supervisory Authorities) guidelines, the Canadian Association of Pension Supervisory Authorities (FSRA) DC initiatives, contribution correction simplifications, and ESG (environmental, social, and governance) integration considerations. It takes place January 25 in Toronto, ON. Information is at https://www.acpm.com/events/regional-events/ontario-council-event

January 11, 2023

Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values and marriage breakdown values for an event which occurs in any month up to and including January 2023 are now available at www.an-actual-actuary.com. An Excel spreadsheet on the website includes the following worksheets:

· Current CV Rates February 2022 CIA

· Current Marital Values January 2012

· Current Annuity Proxy

· Current Interest on Contributions

· Historical Ontario (Bill 133) Prior Rates

· Historical CV Rates December 2020

· Historical Marital Values 2012

· Historical Annuity Proxy

· Historical Revised CV Rate 2011-02

· Historical CV Rate February 2011 CIA

· Historical Marital-May 2009 CIA

· Historical ‒ CV 2009 CIA

· Historical ‒ CV 2005 CIA

· Historical ‒ CV 1993 CIA

January 10, 2023

Canadians Looking For New Jobs

Half of Canadian workers plan to look for a new job this year, a nearly twofold increase from just a year ago, says a poll by Robert Half. The survey found 50 per cent of respondents indicated they planned to search for a new job in the next six months. That number has risen steadily over the last year and a half, from about 21 per cent of employees on the hunt for a new job in June 2021 to 28 per cent a year ago and 31 per cent six months ago. The latest polling found the workers most likely to make a career move include employees who have been with a company for two to four years, generation Z and millennials, tech workers, and working parents. The top reasons for searching for a new job include a higher salary, better benefits and perks, more advancement opportunities, and greater flexibility to choose when and where they work.

January 10, 2023

Market Sentiment Improves

Market sentiment continues to improve, says Alessio de Longis, senior portfolio manager, head of tactical asset allocation, at Invesco Investment Solutions. Its barometer of global risk appetite posted another noticeable increase over the past month, led by outperformance in emerging market (EM) equities relative to developed markets, tightening in sovereign EM spreads, and U.S. dollar depreciation. These types of inflections in market sentiment have historically presaged an improvement in growth expectations and earnings momentum, as evidenced by the strong positive correlation – approximately 78 per cent with a lead of three-months ‒ between global risk appetite and indicators of the global business cycle. This confirms the increasing likelihood of a recovery in the global economy. In fact, its regional leading economic indicators suggest this recovery may be already underway in the Eurozone and the UK, in sharp contrast with market consensus and recent downward growth revisions by the European Central Bank and Bank of England. While it is premature to assume durability in this rebound, signs of stabilization in Europe provide an important signal of resilience in the region that is most vulnerable to economic and confidence shocks from the Ukraine/Russia war. Indeed, this rebound in European indicators is led by a bottoming out in consumer sentiment surveys and improving manufacturing business sentiment.

January 10, 2023

U.S. Employers Covering Weight Loss Drugs

The International Foundation of Employee Benefit Plans says what an individual’s weight says about their health status is an evolving discussion. So too is how employers support their workforce. It says 22 per cent of U.S. employers cover prescription drugs for weight loss and almost half (45 per cent) cover bariatric surgery. In addition, 32 per cent of organizations offer weight management programs. “Obesity is a complicated and often misunderstood disease, with treatments rapidly evolving,” says Julie Stich, vice-president of content at the foundation. “More organizations understand that obesity is a disease that can cause heightened risk of other chronic conditions such as high blood pressure, type 2 diabetes, coronary heart disease, and some cancers. Providing coverage for advanced therapies and weight management programs can help reduce healthcare costs and vastly improve workers’ well-being.” In the U.S., 25 per cent of employers report that obesity has the largest impact on overall healthcare costs.

January 10, 2023

Two Have New Roles

Oliver Duff is senior vice-president, global head of credit investments, and Simon Marc is senior vice-president, global head of private equity and strategic partnerships, at the Public Sector Pension Investment Board (PSP Investments). Duff has more than 25 years of experience in leverage finance. He joined the organization in September 2016 as managing director, private debt. Prior to that, he was global head of leveraged finance and European head of capital financing at HSBC Bank PLC. Marc has over 25 years of investment experience in private equity. Previously senior managing director, global head of private equity, he joined the organization in August 2015 as managing director, private equity.

January 10, 2023

Cyber Security Examined

CPBI Saskatchewan will examine ‘Cyber Security 2.0 – Revenge of the Insider.’ Sean McKim, manager of technology at the Regina Airport Authority, will talk about how security concepts and approaches apply to those that are on the ‘inside’ and could be intentionally, or more often accidentally, part of a cyber security issue that needs to be managed. It takes place February 1. Information is at https://www.cpbi-icra.ca/Events/Details/Saskatchewan/2023/02-01-Cyber-Security-2-0-Revenge-of-the-Insider

January 9, 2023

AIMCo Watches ESG Trends

AIMCo’s responsible investment team is keeping an eye on several ESG (environmental, social, and governance) developments in 2023. It says biodiversity will take centre stage in the coming year. Biodiversity refers to the variety of life on Earth and the natural patterns it forms. The Conference of the Parties (COP15) marked a crucial inflection point as human activity is pushing one million species of plants and animals towards extinction – the largest extinction event since the dinosaurs. The health of the planet matters to everyone as it underpins people’s health and wellbeing. Despite the value being difficult to calculate, it says natural capital is a precursor to resilient economies. More than half of the world’s economic output – US$44 trillion of economic value creation – is moderately or highly dependent on nature. Since Canada has a large natural balance sheet, nature loss can materially impact the financial performance of companies it is invested. Institutional investors at COP15 announced the ‘Nature Action 100’ initiative which will focus on mapping sector pathways and identifying 100 focus companies for investor engagement, with companies’ progress tracked against key indicators. As well, concerns around greenwashing were identified as the most significant deterrent to growth in responsible investment in 2022. Concerns and mistrust have been driven by political backlash in the U.S., inconsistencies in ESG data, and a lack of regulation. It says issuers that don’t back up their sustainability claims with factual and balanced evidence are at increasing risk of enforcement activity and litigation, with Bloomberg Law stating that the three cases brought forward in 2022 are likely just the beginning.

January 9, 2023

Mitigating Risk Now Paramount

The current macroeconomic climate has made ma