Sun, Oct 23, 2016
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.


Other news from Canada
Meanwhile, a report from 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 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


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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Macro hedge funds up 3.3% in one week on Fed and Brexit pays off[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were boosted by the strong performance of global macro funds, with the Lyxor Global Macro Index gaining 3.3% as of the week ending Oct. 11 (-1.7% YTD), Lyxor Asset Management reported. Their short on the p