Pension Pulse

Benefits Canada reports CAAT returns 9.5% for 2023, led by global, emerging market equities: The Colleges of Applied Arts and Technology pension plan saw a net return of 9.5 per cent for 2023, with net assets of $20.1 billion, up from $18.2 billion in 2022, according to its latest annual report. As of Jan. 1, 2024, the investment organization maintained a healthy funding level of 124 per cent on a going-concern basis — with $1.24 set aside for every dollar promised in pensions — increasing its funding reserves to $5.3 billion. The plan saw positive returns in global equities (19.8 per cent), emerging markets equity (19 per cent), nominal bonds (7.4 per cent) and private equity (5.9 per cent). However, commodities recorded a loss (negative 6.6 per cent) during the year. In 2023, Canadian holdings made up nearly 30 per cent of the plan’s assets, including investments in equities, bonds, real estate and infrastructure. In a press release, Derek Dobson, the CAAT’s chief executi

Ishika Mookerjee and Sheryl Tian Tong Lee of Bloomberg report Quebec pension struggles to deploy $7 billion for energy transition: One of Canada’s biggest pension funds says it hasn’t been able to deploy the CAD 10 billion ($7.3 billion) it earmarked for energy transition investments, partly because it finds Asian governments’ long-term plans and support inadequate.  “Particularly in this part of the world, there are a lot of governments who are jumping and saying that, ‘We’ve got a lot of energy transition needs,’” said Wai Leng Leong, head of Asia-Pacific at Caisse de Depot et Placement du Quebec at the FT Future of Asset Management Asia event in Singapore Wednesday. “But when we say energy transition, we want complete accountability and that has to be there for 20, 30 years.” It takes a long time to wind down polluting businesses and replace them with clean alternatives, she said, which requires “a lot of government support in engaging the local community.”  Transition

Seher Dareen of Reuters reports CPPIB co-leads partnership acquiring US utility ALLETE in $6.2-billion deal: U.S. utility Allete said on Monday that it had agreed a deal with investment firms Global Infrastructure Partners and CPP Investments to be taken private at a US$6.2-billion valuation, inclusive of debt. The transaction is a rare example of a U.S. utility being taken private by investment firms, and comes at a time when such companies are receiving increased investor interest as technological innovations, such as artificial intelligence and data centres, boost power demand. For utilities such as Allete, this hunger for power comes as they are implementing a shift to greener forms of generation, creating the need for significant investment in their networks. Allete chief executive officer Bethany Owen told Reuters that the Minnesota-based company’s strategy involved spending US$4.3-billion on renewables over the next five years, and further billions on investments

Back in January, Lydia DePellis of the New York Times wrote an article on how private equity is starting to share profits with workers, without taking a financial hit: In 2018, Anna-Lisa Miller was working with agricultural cooperatives in Hawaii, helping them reinvest in their communities through shared ownership. Ms. Miller, who had gone to law school and had planned to do civil rights litigation, loved the principle of workers partaking in the financial success of their employers, and the next year joined Project Equity, a nonprofit that helps small businesses transition to worker ownership. But it was slow going, with each transaction requiring customized assistance. Then she came across an investor presentation from a different universe: KKR, one of the world’s largest private equity firms. In it, a KKR executive, Pete Stavros, discussed a model he had been developing to provide employees with an equity stake in companies it purchased, so the workers would reap some