Alberta Investment Management Corp., a Canadian pension-fund manager with about C$70 billion ($71 billion) in assets, expects 2013 to be a “challenging” year with bond returns declining, said Chief Executive Officer Leo de Bever.
The portfolio of AIMCo, as the Edmonton, Alberta-based fund is known, will grow about 6 percent this year after 10 percent growth in 2012, de Bever said in a briefing with journalists in Calgary today. Central banks have added liquidity to economies which has driven up asset prices, including bonds and real estate, he said.
“Last year was a very confusing year and I have this idea that 2013 will be very similar,” de Bever said. Equities will probably outperform bonds, he said.
“Going forward, things get more and more dicey for bonds,” he said. “I only see two scenarios there - a bad one and a really bad one. If I look out over a period of 5 years, stock returns are going to be higher than bond returns.”
Austerity policies in Europe are failing to lift growth in economies like Spain, he said. As countries begin a process of re-regulating the banking industry, AIMCo is buying up assets from financial organizations like re-insurance and infrastructure financing businesses.
AIMCo has focused on investments in food, energy and materials, as well as technology de Bever said. The fund aims to invest in “enabling technology” that helps companies reduce costs and improve efficiencies, he said.