The Alberta government has made a sudden decision to dismiss the entire board and CEO of the Alberta Investment Management Corp. (AIMCo). This comes at a time when several of the pension fund’s clients are expressing dissatisfaction with its performance.
Andrew Willis, a business columnist with The Globe and Mail, said he was not completely surprised by the move. “AIMCo has been controversial for a couple of years and their performance hasn’t been that great… a lot of clients are unhappy,” he noted in an interview. AIMCo has a unique structure as a crown corporation managing capital for over a dozen groups in Alberta, including the heritage fund and multiple public sector pension plans.
Some groups, like university professors, have been withdrawing their funds from AIMCo due to performance concerns. Finance Minister Nate Horner cited high management fees and a consistent failure to meet benchmark returns as reasons for the board’s dismissal. He explained that he had closely monitored AIMCo’s performance and determined that a significant overhaul was necessary.
Changes at AIMCo leadership
Despite the government’s claims, Willis said AIMCo’s recent returns have been comparable to other large Canadian pension plans. “Their performance hasn’t been outstanding, but they certainly weren’t lagging behind others,” he noted.
AIMCo had faced challenges related to pandemic-induced volatility, but CEO Evan Siddall had created a credible turnaround plan. However, rising costs and a focus on global investing and alternatives had increased headcount, which the government found concerning. Horner will act as AIMCo’s sole director and chair until a new chair is appointed within 30 days.
The province has also named Ray Gilmour, Deputy Minister of Executive Council, as interim CEO. While Gilmour lacks investment management experience, Willis described him as a trusted figure within the Alberta government. The future of AIMCo’s mandate is crucial, particularly with Premier Danielle Smith’s interest in seeing more investment within Alberta.
Willis cautioned against a shift towards a mandate similar to Quebec’s Caisse de dépôt et placement, which could lead to a dangerous overweighting in Alberta’s oil and gas industry. Alberta remains Canada’s largest oil and gas producer, but Willis warned that over-reliance on this sector could be risky for Alberta pensioners.
