AUM of Canada’s Largest Pensions Have Tripled Since 2003: Report

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The size of the portfolios of Canada’s 10 largest pension funds has tripled since 2003, according to a study conducted by the Boston Consulting Group.

Another interesting takeaway from the study: the assets under management of those 10 funds are equal to 45 percent of Canada’s GDP.

More from Reuters:

Canada’s biggest 10 public pension funds now manage assets worth more than $1.1-trillion, having tripled in size since 2003, according to a study published by the Boston Consulting Group on Thursday.

The funds have expanded rapidly in recent years, pursuing a strategy of directly investing in assets globally with an emphasis on real estate and infrastructure projects such as bridges, tunnels and roads. Some pension experts say this approach has helped them mitigate the impact of volatility in global equity markets and challenging economic conditions.

About one-third of the top 10 funds’ investments are in alternative asset classes such as infrastructure, private equity and real estate, according to the study, which was commissioned by the top 10 funds.

“The top 10 have shown impressive growth in investment capabilities and scale to manage the realities of a post-financial crisis world,” said Craig Hapelt, partner and managing director at BCG.

“Their investments also have a broader positive impact on Canada’s prosperity,” he added.

By directly investing, the Canadian funds are able to manage assets themselves, a move the funds say results in lower costs. They have also built up sufficient scale over the past two decades to acquire capital-intensive assets such as infrastructure.

According to the study, 7 of the funds are in the top 30 infrastructure investors in the world.

 

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