AIMCo Buys Stake in Alt Credit Specialist

The Alberta Investment Management Corporation (AIMCo) has bought a minority stake in one of its asset managers in an effort to align interests.

“DFG’s commitment to their clients aligns with AIMCo’s values and approach to investing.”The C$85 billion ($58.3 billion) fund is collaborating with DFG Investment Advisers after working together for six years, initially on AIMCO’s fixed income strategy.

“DFG is a trusted manager that has provided AIMCo with strong performance and comprehensive analytical support,” said Dale MacMaster, AIMCo’s CIO, in a statement. “DFG’s commitment to their clients aligns with AIMCo’s values and approach to investing.”

Since establishing the relationship in 2009, AIMCo further invested in DFG’s strategies across public markets, particularly in alternative credit, according to the release.

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The Canadian fund’s public equities chief Peter Pontikes added that DFG’s “unique expertise” in structured credit “positions them well to capitalize on opportunities that have arisen due to recent regulatory changes.”

In October, Towers Watson argued that institutional investors have much to gain from alternative credit, despite current allocation being “a drop in the enormous roughly $40 trillion global credit markets’ ocean.”

Alternative credit could help investors reduce their dependence on equity risk premium without wholly sacrificing returns, the consulting firm said.

DFG has some $2 billion under management primarily in corporate and structured assets as of November 30, 2015.

AIMCo has made a number of similar M&A deals over the past year.

Most recently in November 2015, the fund acquired an 8% stake in an Alberta-based clean power generation company for $200 million, adding to its $4.3 billion infrastructure portfolio.

In June, AIMCo joined forces with fellow Canadian fund the Ontario Municipal Employees Retirement System to acquire a London-based environmental consulting firm. They agreed to pay $1.7 billion.

“We consider our investment in [the consulting firm] to be an important portfolio addition for our clients, and further evidence of the private equity group’s ability to execute on its strategy of direct investing,” AIMCo’s Head of Private Equity Peter Teti said at the time of the announcement.

Private equity groups KKR and Blackstone bought stakes in hedge fund firms last year in an effort to tap into revenue streams, rather than gaining direct exposure to potentially riskier strategies.

A coalition of institutional shareholders representing $300 billion in assets has demanded ExxonMobil keep up with its competitors and disclose how it is preparing for a low-carbon future.

Investors led by the New York State Common Retirement Fund and Church Commissioners for England have urged ExxonMobil to come clean about its long-term business model following the Paris Agreement on climate change.

“As shareholders, we want to know that Exxon is doing what is needed to prepare for a future with lower carbon emissions.”The coalition includes the University of California’s pension, Vermont State Employees’ Retirement System, and the Brainerd Foundation. Together, they represent a total of $300 billion in assets and own more than $1 billion of Exxon stock, or 0.3% of the company.

“As shareholders, we want to know that Exxon is doing what is needed to prepare for a future with lower carbon emissions,” said Thomas DiNapoli, New York state comptroller and sole fiduciary of the $184.5 billion pension fund.

The resolution pushes for ExxonMobil to assess the business impact of the Paris Agreement’s restriction on global warming to below two degrees Celsius “through, and beyond, 2040.” Included in the oil giant’s soul searching, according to the group, should be the potential for reduced demand for fossil fuels.

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“Climate change presents major challenges to corporate governance, sustainability, and ultimately profitability at ExxonMobil,” said Edward Mason, Church Commissioners’ head of responsible investment.

The £6.7 billion ($9.5 billion) faith-based group called for “more transparency and reporting” from ExxonMobil on its process for assessing risks and opportunities.

The shareholders added that Exxon competitors Shell and BP have already agreed last year to reveal how they will be affected by lower greenhouse gas emissions, driven by a similar proposal led by the Church of England.

In April 2015, more than 50 institutional investors worldwide—including the California Public Employees’ Retirement System, Norges Bank Investment Management, various UK public pensions, and Sweden’s AP funds—called for BP to position its asset portfolio for transitioning away from carbon-intensive energy.

Nearly 60 US investors also asked the US Securities and Exchange Commission in April to require oil and natural gas companies to publish “meaningful, substantive carbon asset risk disclosures.”