Canada's Alberta Investment Management Corporation (AIMCo) plans to tap into attractive growth opportunities in the region and expand its portfolio internationally with the launch of its first office in Asia in Singapore.
Marlene Puffer, AIMCo’s chief investment officer who joined the firm in January, highlighted Singapore as a logical step to strengthen relationships with investment partners and further diversify their global asset mix.
“We believe in the long-term opportunities here in Asia,” Puffer said at a media event on September 12.
“We see Singapore as the financial hub of the region, and this market is full of opportunity for our patient, long term capital. This office will really be a key enabler of our new partnerships approach,” she said.
The Singapore office will provide the C$164 billion ($121 billion) Canadian fund access to the financial services community and infrastructure of Singapore, as well as enhance its connectivity to other markets in the region.
Kevin Bong was named senior managing director, chief investment strategist, and head of Singapore earlier this year by AIMCo.
Bong brings over 20 years of experience in portfolio construction and capital allocation and was most recently a managing director at GIC, Singapore's sovereign wealth fund.
"We have a strong base in Canadian fixed income, but the rest of our assets are widely diversified, and we intend to be increasingly diversified, particularly in Asia," said Puffer.
Puffer highlighted three major private asset classes of interest: private equity, infrastructure, and real estate.
AIMCo has around $9 billion (C$12 billion) invested in private equity, which helps it diversify away from public markets and provides access to unique strategies, she said. The fund mainly pursues private equity opportunities via PE funds, as well as through direct and co-investments.
Also at the event was AIMCo CEO Evan Siddall, who said the fund will be looking to increase its private equity allocations, in which it is currently underweight.
AIMCo’s infrastructure portfolio is the most globally diversified of its portfolios, with about $14 billion (C$19 billion) in the asset class, including roughly $2.2 billion (C$3 billion) in investments across Asia Pacific.
“The three largest direct investments in that space are AusNet, an Australian gas and electric utility; AirTrunk, a data centre platform in Asia, and Daesung Industrial Gases, an industrial gas provider in Korea,” Puffer said.
The fund’s largest private asset class is real estate, and AIMCo has about $17 billion (C$23 billion) invested globally.
“We have a good Canadian platform, but we have a large foreign based set of strategies as well and over the next five years, we plan to grow that exposure specifically here in the Asia Pacific region, targeting for about 10% of our total real estate portfolio to be in Asia.”
THE LONG VIEW
"Our investment objective is to deliver persistent superior risk-adjusted net total returns for our clients,” Bong said at the event.
“We take a long-term view to generate good investment returns. We know that markets are volatile and so it's important to have both the perspective to identify good long-term returns, but also the wherewithal to hold those returns so we can burn the market risk premium.”
Asset allocation is a major determinant of total returns so the fund continually assesses macro and market conditions to allocate capital effectively, he said.
AIMCo’s success has historically been driven by its talent pool and the team’s ability to harness their ideas and make real-time decisions across multiple portfolio priorities, Bong added.
“We know that AIMCO’s strength and the essence of our success comes from our people, and we believe in in-house management and our own capabilities.”
Bong also stressed the importance of active investing, sourcing the right deals, and executing optimally to differentiate the fund’s investment performance—but mostly a focus on identifying the right partners.
“We built many highly valued partnerships over the years across public and private markets. And as our global footprint expands, we're looking to build on existing partnerships and also develop new ones here in Singapore, and across the region to help us deliver strong returns for our clients.”
AsianInvestor will be hosting its flagship Southeast Asia Institutional Investment Forum in Singapore on November 22, To find out more, click here.