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Ashby Monk, Ph.D., executive director of the Global Projects Center at Stanford University and a senior research associate at the University of Oxford, has been blogging about sovereign and pension funds since 2008. 

Follow him on Twitter at @sovereignfund.

Recent Post

Individually Rational and Collectively Crazy

Why I Go to Australia. A Lot.

When it comes to investing edge: Advantage, Giants.

The Key to Saving Is Gambling. Seriously.

AIMCo Is Quite Remarkable

I think the Alberta Investment Management Corporation is a truly remarkable organization.

But before I explain why I think that, let me first disclose that I am an ‘Advisor’ at AIMCo. Moreover, as an Edmonton native, I’m quite proud to be a part of the Crown Corporation that Alberta set up in 2008 to professionalize investment management services for its public pension funds, endowments and sovereign fund. And that means you should take any and all effusive language I may write over the next few paragraphs and run it through a heavy bias filter.

Anyway, as I was saying, AIMCo is truly a remarkable organization. I’m not just saying this because the fund is coming off an astoundingly good year – the fund’s balanced portfolio beat the average Canadian pension fund by 5% and even topped the venerable Canada Pension Plan by 1.5%. That’s definitely impressive, but it’s just one year for a fund with an inter-generational time horizon.

No, in my view, AIMCo is remarkable because it’s trying to sidestep the traditional financial institutions and norms to add persistent value for clients in non-traditional ways (and in non-traditional markets). Thanks to its strong governance and business-minded Board, it’s literally rethinking the business of institutional investment. Here’s some blurbage from the annual report that explains what I mean:

“We use our expertise to find opportunities that do not fit in conventional boxes. Some of our best investments are those we find “in between the cracks” – opportunities that are hidden unless, guided by information, insight and experience, you know what you are looking for.

“Unique opportunities have been realized by combining expertise in timberlands and real estate, and by amalgamating aspects of our private equity, real estate and Infrastructure expertise. We have built an extensive relationship Investment portfolio by applying private equity strategies to public markets.”

“In a market place crowded with capital looking for secure investments and strong, steady returns, many still choose to follow the crowd and fight it out over every opportunity. At AIMCo, we decided that we’d rather take our own path; it’s allowed us to find opportunities that others have overlooked or haven’t even imagined.”

And if that’s not a clear enough explanation for what AIMCo is up to, this Canadian fund knows that it can always fall back on something every Canadian understands: hockey. Here’s a section from the annual report:

“I skate to where the puck is going to be, not where it has been.” – Wayne Gretzky.

“We apply the same wisdom to investing on behalf of our clients. We invest where the opportunity is next, not where it has been. When the right opportunity arises, we can act decisively to lock in the value for our clients.”

I love it!

And that’s why I work for this public fund – it’s nurturing a creative and innovative environment with total focus on investing in and building businesses and assets. This is a place where a ‘wild idea’ can be white boarded, analyzed, pressed, stressed, vetted and, ultimately, executed. I’ve literally seen it happen. And it is a lot of fun to be a part of it. But it’s also been very rewarding – not just because I’m giving back to my Province, but also because what we’re doing in Edmonton may have implications that go far beyond Alberta. For example, if AIMCo can show through example an innovative and successful way to deploy capital, it will have knock-on effects for institutional investors around the world.

And that would be a positive thing for all those communities and institutions that rely on institutional investors for their wellbeing, such as the elderly (pensions), schools (endowments), charities (foundations), governments (sovereign funds), families (family offices), etc.