Tue, Apr 21, 2015
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. Studies - Fund managers bullish on equities, alternative asset classes, Hedge funds starting to spurn emerging markets, Insurance companies take aggressive approach to hedge funds despite restricted exposure[more]

    Fund managers bullish on equities, alternative asset classes From Benefitnews.co: Asset allocation and risk continue to be the top issues for institutional investors in 2015 and, while nobody is sure what the economy will do in 2015, investment fund managers remain positive about investm

  2. Investing - New hedge fund strategy: Dispute the patent, short the stock, David Einhorn bets on AerCap as leasing company avoids turbulence, Top hedge funds reveal these best investing ideas, Hedge funds bet big on PetSmart price bump, Victory Park Capital increases investment in upstart to $500m[more]

    New hedge fund strategy: Dispute the patent, short the stock From WSJ.com: A well-known hedge-fund manager is taking a novel approach to making money: filing and publicizing patent challenges against pharmaceutical companies while also betting against their shares. Kyle Bass, head of Hay

  3. Tiger Global falls 2.9% in March, down 5.3% in Q1[more]

    From Reuters.com: Investment firm Tiger Global Management, one of the hedge fund industry's most closely watched players, told clients that its hedge fund lost 5.3 percent during the first quarter, an investor said on Wednesday. Much of the decline came in March when the fund lost 2.9 percent,

  4. It’s not just hedge funds—IMF study finds stability risks from ‘vanilla’ funds[more]

    From MarketWatch.com: Leveraged hedge funds and banklike money-market funds are the parts of the asset-management industry most associated with risks to financial stability. But a report from the International Monetary Fund suggests that “plain-vanilla” mutual funds and exchange-traded funds also ca

  5. Hedge funds gain 2.4% in Q1 driven by currency and commodity markets[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-b

 

banner