Canada's AIMCo to establish Asia base in Singapore

“Singapore is increasingly attractive relative to other places like Hong Kong that are close to China and that have experienced some geopolitical issues,” Peter Teti, head of private equity at AIMCo, told Bloomberg.

He added that the pension plan was to “have a pan-Asian strategy as opposed to just, for example, a Chinese strategy,” and that Singapore is a logical staging post for investments across the region, including Australia and New Zealand.

Canadian pension plans have been among the more proactive international LPs in establishing a presence in Asia – in most cases, the result of a desire to scale up participation in co-investments and direct investments, for which on-the-ground teams are seen as essential.

Canadian Pension Plan Investment Board (CPPIB) was the first to put down roots in the region, opening a Hong Kong office in 2008. There are now bases in Mumbai and Sydney as well. OPTrust arrived in Sydney in 2012 and Ontario Teachers’ Pension Plan (OTPP) set up in Hong Kong the following year. In 2020, OTPP added a Singapore presence.

Caisse de dépôt et placement du Québec (CDPQ) and Ontario Municipal Employees Retirement System (OMERS) picked Singapore as their gateways to Asia in 2014 and 2017, respectively. CDPQ subsequently set up offices in New Delhi, Shanghai, and Sydney, while OMERS added Sydney. Public Sector Pension Investment Board (PSP) opened in Hong Kong in 2019.

There is widespread concern in the broader financial services industry that Hong Kong’s longstanding pre-eminence within Asia is being eroded, with Singapore a logical beneficiary.

Earlier this week, Hanscom Smith, the US consul general in Hong Kong, said that the national security law introduced last year had harmed the territory’s rule of law traditions and threatened its role as an international business centre. The Hong Kong government described these criticisms as unfair.

Meanwhile, the Alternative Investment Management Association (AIMA) and PwC have outlined six ways in which Hong Kong can strengthen its position: upholding the rule of law; maintaining a simple and competitive tax structure; ensuring independent, transparent, and effective regulation; developing and retaining high-quality global talent; leveraging proximity to mainland China; and promoting broader and deeper capital markets.

The report also suggested that current pandemic-related travel restrictions are hurting the industry. “It is critical that a delicate balance is struck giving proper recognition to Hong Kong’s stature as an international financial centre and broader local public health considerations,” it said.

AIMCo’s CAD 168.3bn in AUM as of December 2021 featured a CAD 39.6bn illiquid markets allocation. Private equity, real estate, infrastructure, and renewables accounted for CAD 8.7bn, CAD 18.3bn, CAD 10.6bn, and CAD 1.8bn, respectively. Direct and co-investments made up 42% of the private equity exposure, yet the program had only 2% of its assets in Asia.

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• Topics
• LPs
• Southeast Asia
• Greater China
• Alberta Investment Management Corporation (AIMCo)
• Singapore
• Hong Kong (China)