Here’s an interview with Michael Sabia, president and CEO of Caisse de dépôt et placement du Québec.
Last month, the pension fund struck a deal to take over public transportation projects, including a light rail system and a bridge.
Here, Sabia talks about the partnership and how it came about.
The CEO of the Canada Pension Plan Investment Board (CPPIB) told the Toronto Region Board of Trade on Monday that Canada should be looking overseas and around the world for growth opportunities.
More on Mark Wiseman’s remarks from the Times Colonist:
Meanwhile, Wiseman said in a speech prepared for Monday’s annual dinner of the Toronto Region Board of Trade that Canadian organizations should be looking overseas for growth.
He noted that the CPPIB already invests 70 per cent of its capital outside of Canada, with a particular focus on China, India and Brazil.
“Most of you are familiar with Wayne Gretzky’s style of playing hockey — he staked to where the puck was going to be, not to where it was,” Wiseman said in his speech to the business audience.
“To put it bluntly, Canada needs to follow Gretzky’s practice.”
Wiseman says Canada should leverage its strong reputation overseas and its large population of immigrants, who possess a wealth of global experience that can help Canadian companies expand abroad.
“Having international skills and knowledge is a key asset — and it’s one that won’t rise and fall in value along with global commodity prices,” Wiseman said.
The CPPIB managed $201.1 billion in assets at the end of last fiscal year.
Photo by Horia Varlan via Flickr CC License
The CEO of the Ontario Teachers’ Pension Plan, Ron Mock, spoke at the World Economic Forum last week. One of the topics he touched on was how hard it is to find bargains in the current market, where “everything is expensive” and deals can turn into “non-stop auctions”.
More on his remarks from ai-cio.com:
The head of one of the world’s largest investors has told world leaders in Davos that finding a good deal in current markets has become increasingly tricky.
Speaking at the World Economic Forum in the Swiss ski resort, Ontario Teachers’ Pension Plan (OTPP) CEO Ron Mock said that across asset classes “everything is expensive,” according to a report from the Wall Street Journal.
“In the infrastructure space, there is so much money chasing these alternative assets, it’s turned into non-stop auctions,” said Mock. “Infrastructure yields have come down to the single digits, which ignore the regulatory risk.”
His comments echoed a study by Preqin last year showing infrastructure deals were 12% more expensive in 2014 than the previous record set in 2012.
“On the private equity side, there are deals at huge multiples of Earnings Before Interest, Taxes, Depreciation and Amortization [EBITDA],” said Mock, “and the spread between public and private yields are very narrow.”
The Ontario Teachers’ Pension Plan manages $140.8 billion in assets as of December 31, 2013.
Photo by Timothy Sulllivan via Flickr CC License
In this discussion, CalSTRS Chief Investment Officer Chris Ailman talks about why he thinks corporations need to have separate CEO and chairman roles – and how CalSTRS is pushing companies to divide those roles.
Three of the country’s largest public pension funds are pushing back against Bank of America’s recent decision to appoint Brian Moynihan as CEO and chairman.
A shareholder resolution had previously mandated that the positions be separate.
Now, pension funds are telling Bank of America it has poked its “finger in the eye of investors.”
From the Wall Street Journal:
Three of the largest pension systems in the U.S. are pushing back on the bank’s move, announced earlier this month. The resistance from the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the adviser to New York City’s five pension funds may result in a variety of steps to try to improve governance, including a shareholder campaign to challenge the move in the spring, according to people familiar with the matter.
Bank of America set off these investors’ ire when its board changed the bank’s bylaws Oct. 1 to allow it to combine the chairman and CEO roles, then announced later that day that it had given the chairman’s job to Mr. Moynihan. The move essentially unraveled a binding 2009 shareholder resolution to separate the positions. A majority of shareholders, including the three pension systems, had voted for that change at the bank.
“They have flaunted the will of the shareholders,” said Anne Sheehan, corporate-governance director at the California State Teachers’ Retirement System, or Calstrs, the second-largest pension fund in the U.S. by assets. “It’s like the board poking their finger in the eye of investors,” said Michael Garland, director of corporate governance to New York City Comptroller Scott Stringer, who advises the five New York City pension funds.
Collectively, the three pension systems control 93 million Bank of America shares, or about 0.9% of shares outstanding, according to the most recent data available.
Bank of America’s board is within its rights to combine the positions, because the board of virtually any company incorporated in Delaware is allowed to alter corporate bylaws, even if it means undoing a previous shareholder change.
Warren Buffett, another large shareholder, said he supported the move. From the WSJ:
Some big shareholders supported the move, including Warren Buffett , whose Berkshire Hathaway Inc. made a $5 billion investment in the bank in 2011.
“I support the Board’s decision 100%,” Mr. Buffett said in an email Wednesday in response to questions from The Wall Street Journal. “ Brian Moynihan has done a superb job as CEO of Bank of America and he will make an excellent Chairman as well.”
A CalSTRS spokesman told the Wall Street Journal that it is talking with other shareholders about next steps. The pension funds could use their sway to vote out certain board members; they could also file another shareholder resolution, similar to the one in 2009, which would prohibit the CEO and chairman positions from being occupied by one person.
Anne Stausboll, CEO of the California Public Employees Retirement System, released a statement addressing a recent court ruling that the bankrupt city of Stockton could cut pensions and stop contributing to CalPERS as part of its bankruptcy proceedings.
The statement in full:
The ruling last week by a federal bankruptcy judge in Stockton’s bankruptcy case has caused many to speculate about the future of pensions. Public employees, retirees, employers, lawyers, taxpayers, and journalists have legitimate questions and concerns.
As the administrator of pensions, the California Public Employees’ Retirement System does not win or lose in this situation. If pensions are reduced in bankruptcies, the only losers are public employees.
Contrary to the belief of many pension critics, CalPERS is no Goliath. Franklin Templeton Investments – the last bondholder standing in the way of the city of Stockton’s plan to rebuild – is no David.
Franklin Templeton is a sophisticated Wall Street investor that did its due diligence, analyzed the risks, and decided to make a $36 million investment in Stockton. As it turns out, the investment did not pay off. That’s how the investment world works. Franklin needs to move on.
The real Davids are the current and former employees of the city of Stockton whose retirements are at stake. These librarians, secretaries, firefighters, police officers, 911 dispatchers, and school custodians chose to serve the public at lower salaries in return for the promise of a reliable and secure pension. Their pensions are deferred compensation that they earned by working 10, 20, and sometimes 30 years in service to their communities.
Public employees contribute from every paycheck toward their own retirement. It is not a bonus or optional benefit that an employer may choose to not pay during hard times.
We applaud the leadership of Stockton officials in finding solutions to protect the pension promises made to its public employees while forging a reasonable path toward a fiscally sustainable future.
CalPERS will stand by Stockton, its employees, and residents, and will continue to champion those who really stand to lose – the real Davids – the public employees and retirees who spent their careers serving our communities and California.
Photo by Stephen Curtin
