Tue, Feb 21, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Greenwich Associates: Canadian institutions adjust portfolio strategies after asset decline, more to invest in alternatives

Monday, April 05, 2010
Opalesque Industry Update – Canadian institutional investors are said to be shifting portfolio strategies after a 17% year-to-year decline in asset values from 2008-2009. A report by Greenwich Associates, a Stamford, Connecticut-based consulting firm, showed that funding ratios among Canada’s largest pension funds declined to 82% from 94%, while Corporate funds saw their reported funding levels decline from 102% in 2008 to 89% in 2009, and funding levels for public sector/provincial plans fell to 90% from 95%.

According to the report, Canada’s pension funds adopted an increasingly conservative strategy amid the turbulent markets in 2008 and 2009. A combination of declining equity valuations and proactive shifts in portfolio asset mixes brought down institutional allocations to domestic equity to 16.7% of total assets in 2009 from 18.7% in 2008.

It added that at least 40% of Canadian plan sponsors disclosed in 2009 they would make substantive changes in their asset mixes in the coming 12 months, up from 31% in 2008. If the plan pushes through, the changes will result in additional reductions to domestic equity allocations. Some 17% of Canadian funds said they would significantly reduce allocations to local stocks; only 5% plan to increase them. It appears much of the cash moved out of domestic equities will be invested in alternative asset classes, the report said.

However, Greenwich noted that the proportion of Canadian institutions using a manager for EAFE/international equities increased to 76% in 2009 from 68% in 2008, and the share of funds using U.S. equities increased to 72% from 69%.

There is also a growing trend among Canadian institutions to invest in alternative assets, including private equity, hedge funds and infrastructure. 4% of funds plan to hire in each of hedge funds and private equity, the latter share representing a decrease from the 6% of funds that reported plans to hire a private equity manager in 2008.

Source.

Other news from Canada
Meanwhile, a report from Financialpost.com showed that several cash-strapped states in the U.S. have relaxed rules on casino operations and Canadian hedge funds are ready to cash in. Toronto-based Clairevest Group Inc and its U.S. development partner, Lakes Entertainment Inc. of Minneapolis, Minnesotta, are planning to take over a state-owned casino resort in Mulvane, Kansas, after Harrah Entertainment Inc., which originally won the $500m project, backed out.

Last month, Toreigh Stuart, CEO of Man Investments Canada Corp., told Nationalpost.com that the investment landscape in Canada had changed as hedge funds were being repackaged, repurposed and sold in a format accessible to Canadian retail investors. As part of this shift, hedge funds are becoming subject to the same stringent regulations required of mainstream products, such as mutual funds.

And a recent research paper entitled “The Great White North,” which concluded that Canadian hedge funds outperformed their global peers, has been awarded the 2009 AIMA Canada – Hillside Research Award in early March.

– Precy Dumlao

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. With $54bn in assets, Philippines is ready for hedge funds, alternative investment products[more]

    Komfie Manalo, Opalesque Asia: With the country's outstanding fund management industry at $54bn and growing, the Philippine market and its investors are ready to invest in "more sophisticated" asset management products, like hedge funds and alternative investments, said Deanno J. Basas, presi

  2. SoftBank to buy Fortress Investment for $3.3bn[more]

    From Reuters.com: Japan's SoftBank Group Corp on Wednesday said it has agreed to buy Fortress Investment Group LLC for about $3.3 billion, looking to add investment expertise as it prepares to launch the world's largest private equity fund. The all-cash deal is SoftBank's first major investmen

  3. ...And Finally - Truth in advertising[more]

    From Newsoftheweird.com: Girl Scout Charlotte McCourt, 11, of South Orange, New Jersey, saw her sales zoom recently when she posted "brutally honest" reviews of the Scouts' cookies she was selling -- giving none of them a "10" and labeling some with dour descriptions. She was hoping to sell

  4. Europe - Brexit - Updated legal guide, Euro exchange rates set to tumble as hedge fund's super computer predicts Marine Le Pen will be next French president, Swiss fund market hits all-time high[more]

    Brexit - Updated legal guide From Herbertsmithfreehills.com: When we began analysing in depth the possibility of Britain exiting the EU (Brexit), 18 months prior to the June 2016 referendum, the business consensus was very much that Brexit was a remote prospect that either would never hap

  5. People - Gramercy appoints Bradshaw McKee as managing director of Capital Solutions, Trump taps Cerberus's Feinberg to lead intelligence review[more]

    Gramercy appoints Bradshaw McKee as managing director of Capital Solutions Gramercy Funds Management LLC, a $5.8 billion dedicated emerging markets investment manager, today announced the appointment of Bradshaw McKee to the position of Managing Director, Capital Solutions and Distressed