AIMCo upbeat on India, 'explores strategies' for China
The Alberta Investment Management Corporation (AIMCo) recently announced its plans to diversify its private assets, particularly in Asia, at the opening of its Singapore office on September 12.
With $9 billion in private equity, $14 billion in infrastructure, and $17 billion in real estate, the fund plans to increase its exposure in the Asia Pacific region and boost its private equity allocations, which it sees as currently underweight.
AIMCo
AIMCo is also gearing up to expand its presence in Asia’s public markets, with plans to add dedicated personnel to the task in their newly established Singapore office within the next year to 18 months, according to Chief Investment Officer Marlene Puffer.
AIMCo is exploring larger markets and countries with robust growth potential, said Puffer.
“India has captured our interest and been a focus for quite some time, particularly in terms of infrastructure investments. While smaller markets may not be an immediate focus, we remain open to compelling opportunities as they arise,” she said.
Around 60-70% of AIMCo’s investments are done in-house, with a strong emphasis on fundamental equity research and the development of new quant strategies, she said.
“We take different approaches, some of which is with external partners, but most is through our own direct investments,” Puffer told AsianInvestor.
CHINA’S COMPLEXITY
AIMCO's Singapore office launch comes as many of the largest pension funds in Canada are facing rising challenges with investing in one of the biggest regional economies -- China -- due to increasing geopolitical tensions and other risks.
As tensions between China,the US and Canada escalate, pension fund managers are adopting a cautious approach towards investing in the country.
While AIMCo is actively exploring investment strategies in China, they are cautious about the complicated landscape.
“We're exploring some strategies, and we're doing some analysis to make up our minds as to where we want to come down on that,” said Puffer.
The pension fund has to consider various factors when it makes an investment decision, including ESG considerations, geopolitical risks, and the rapidly changing nature of the Chinese market.
“They all add up to some pretty high hurdles at this time. We'd really have to see multiple dimensions settle down,” said Puffer.
These numerous dimensions all factor into China's growth prospects and have an impact on the real and financial economy, making it complex to access opportunities, said Kevin Bong, senior managing director, chief investment strategist, and head of Singapore at AIMCo.
However, Bong stressed that Asia's opportunities go beyond China, and the fund sees numerous opportunities in other parts of this region as well.
“Asia is a lot more than China,” Bong told AsianInvestor.
“We remain curious and we're not going to shut it [China] out of the opportunity set altogether, but the hurdle is high. In the meantime, there's a lot of other things we can do in the rest of North Asia, East Asia, and Southeast Asia as well.”
HOLISTIC PERSPECTIVE
Bong, recently appointed to lead AIMCo’s activities in Asia, brings his experience from working in large institutions, where he focused on portfolio construction and capital allocation.
AIMCo
He said his goal is to contribute to AIMCo's holistic perspectives and facilitate the integration of different asset classes and strategies.
“AIMCo is at that point in its evolution, where bringing together all the different asset classes and thinking from a total fund or total portfolio perspective, will be increasingly important,” he said.
Puffer and Bong both asserted the importance of collaboration and transparency in the investment process.
“We're large enough to matter, we're small enough to be nimble. I think just as importantly, we're humble enough to know that we have to rely on one another, and also to rely on our partners,” said Bong.
“Everyone is starting to think about things from that holistic perspective and bringing that language and bringing that process and getting the team to help pull all these things together is going to be part of what I’m hoping to build here at AIMCo.”