AIMCo CEO responds to concerns about potential impact of oil price crash on public pensions

The CEO of the entity that manages Alberta’s public pensions delivered a message Thursday to those concerned about their retirement investments and said he wants to assure them they are not at risk.

“As CEO of AIMCo (Alberta Investment Management Corp.), I am accountable for the performance of our organization,” Kevin Uebelein posted on AIMCo’s website. “I am also responsible for setting the record straight.

“Recently, the media has reported on a volatility-related investment strategy we manage that resulted in a significant loss. This occurred because the losses that quickly accrued as market volatility dramatically increased and remained elevated were not able to be offset by the gains that would normally be realized as volatility returned to more typical levels.”

Earlier this month, the left-wing think tank Progress Alberta found that AIMCo had invested $1.1 billion from public service pensions in junior and intermediate oil and gas firms since 2016.

An analysis found that most of those firms lost value well before the combination of the coronavirus crisis and an oil supply war between Russia and Saudi Arabia that saw the price of oil fall to record lows.

“Markets behaved in a manner never before seen and the result was a very unfortunate loss,” Uebelein wrote on Thursday. “In addition, media reporting has dramatically overstated the extent of the losses, by 43 per cent on the low end and 100 per cent on the high end.

“Realized and unrealized losses combined to date are approximately $2.1 billion of the $118.8 billion of assets we manage on behalf of our clients.”

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