Explained: The Role of the Alberta Investment Corporation and Harper’s Appointment as Leader
Recent events at the Alberta Investment Management Corporation (AIMCo) have brought the provincially owned investment agency into the spotlight. The agency, responsible for managing billions in public funds, has seen a flurry of changes in recent weeks, including firings, hirings, and appointments.
Despite being in operation for almost 17 years, AIMCo remains relatively unknown in Canada.
What is AIMCo?
Headquartered in Edmonton, AIMCo is a provincially owned investment-management corporation that, as of June 30, was managing $168.9 billion in assets.
AIMCo is one of the largest institutional investors globally, overseeing a diverse portfolio that includes public sector pension funds and endowments. It is also responsible for managing Alberta government funds designated for public services.
Why Did the Government Fire AIMCo’s Board?
Alberta’s UPC government stated that a significant increase in costs and failure to meet required benchmark returns led to the firing of AIMCo’s board of directors on Nov. 7.
From 2019 to 2023, third-party management fees at AIMCo increased by 96 percent, the number of employees increased by 29 percent, and wage and benefit costs increased by 71 percent, according to the province.
These costs rose while AIMCo managed a smaller percentage of funds internally, resulting in a $4 billion loss on the $110 billion it managed in the spring of 2020 due to market fluctuations attributed to COVID-19 and an oil price war.
Finance Minister Nate Horner stated that the dismissal of the board last week aimed to refocus on maximizing returns and reducing operating costs.
Horner temporarily assumed the role of the sole director and chair after the dismissal, a decision criticized by the Opposition NDP.
Former Prime Minister Stephen Harper was appointed chairman on Nov. 20 as part of the government’s efforts to restore confidence in AIMCo.
Why Was Harper Appointed?
Harper’s appointment as AIMCo chairman was made to instill confidence in the agency, highlighting his political and business experience.
Harper, known for his fiscal responsibility during his time as Prime Minister, has been involved in private business ventures since leaving politics in 2015.
Harper volunteered to serve as AIMCo chairman as an act of public service to Alberta, where he has resided for nearly 46 years.
How AIMCo Works
As of Dec. 31 of last year, AIMCo managed $160.6 billion in assets, earning $62.2 billion in net investment returns over the past decade for various clients.
The majority of the funds AIMCo manages come from the province’s public sector pension plans, with additional investments in endowment funds and government assets.
AIMCo’s investments span public equities, fixed income, and private markets, including real estate, infrastructure, private equity, and renewable sources.
AIMCo aims to be an organization that attracts diverse talent from across North America and around the globe.
The corporation boasts a multicultural workforce, with employees speaking over 40 languages.
The Canadian Press contributed to this report.
