Thread by @yomeeks

This is your daily pension announcement: Dr. Bob writes a research paper about AIMCo! You can download it here. #iwonderwhatitsays #ABLeg #abed #handsoffmypension

era.library.ualberta.ca/items/53ff85bc…

Please do remember that it was published in the spring of 2016. So it is not the most current review of AIMCo's performance. However, it is accurate, rigorous and done by an objective expert. #cantsaythataboutthebusinesscase #petrosexual

I will offer just a few highlights. In a previous tweet I called AIMCo "average". Please read Dr. Bob and let me know if I got it wrong. I want to be fair. From the abstract:

"The comparison of the investment returns achieved by Alberta Investment Management Corporation (AIMCo) for four provincial funds versus those achieved previously in the Department of Finance against established benchmarks shows little, if any, improvement."

So AIMCo was conceived to be a high performance investment organization to best the returns of the Department of Finance. Except it has not worked out that way. And,

"A second method of analysis, the Difference-of-Differences (DiD) method, indicates improving performance of AIMCo relative to its public sector investment management peers and its predecessor organization."

Well, at least AIMCo is improving. #participationribbon

"The study also shows the major beneficiaries of the transformation appear to be the senior managers and particularly the senior executives of AIMCo, whose pay has increased significantly."

This is why the pension funds need representation on the AIMCo Board. They are need to help control costs.

Of particular interest is Table 4. The 4 year value add for BCIMC is 2.0%. (They returned 2.0% above a median manager on average each year for 4 years.)

Ahh, if only we could be like BC where all the pension funds can leave BCIMC but don't want to.

On the same chart LAPP's value add is 0.5% (hmm...less than BCIMC) and its 10 year value add was negative 0.2%. (Should have laid the managers off.)

Table 5 shows a combined AIMCo managed pension fund trailing Ontario Teachers by 1.6% of return in both 2007 and 2008. (Ontario Teachers=gold standard, ATRF modeled their investment operation after.)

I will give you this: "The DiD analysis approach does offer some optimism as AIMCo’s performance, relative to AIM and its peers, has shown improvement."

And, I would agree that AIMCo has improved in the last couple of years as well. #getBETTER

Please note that this is the kind of detailed study and analysis that needs to be done by an independent third party before you go moving billions of dollars around and ordering up monopolies. #dobettertravis

So does Dr. Bob have any recommendations about things that would help AIMCo do better? Funny you should ask... #spoileralert

"It is recommended that a qualified third party, without ties to the investment or human resources consulting
firms, be brought in by the government to examine whether improvements to performance have occurred and whether the increased compensation of ..executives was justified."

And...."It is also recommended that the government remove the ministerial designation requirement that gives AIMCo a monopoly on managing public sector plans."

#whatnomonopoly
This is the opposite of what Travis did.

And...."With a new provincial government in place, and after nearly eight years operating as a provincial corporation, it is time for a public review of the investment performance and governance of AIMCo."

Yup. We need a full public review of performance and governance of AIMCo.

Public policy is my vocation. Bad public policy causes my soul to burn in a loathsome broth. #fearandloathing

Travis has my phone number. I will volunteer my time and skills to help conduct a public review of AIMCo's investment performance.

Dr. Bob, thanks for the honesty.