Almost as soon as Mr. Gilmour was chosen to be interim CEO, government officials signalled to people close to the process that he is likely to remain in the role at least long enough to see through the province’s plan for a change in course, according to three sources familiar with the discussions.Supplied
Alberta’s $169-billion public-sector pension fund manager is taking the first steps to rebuild its senior ranks after two weeks of upheaval, but one key figure who emerged in the abrupt transition is expected to stay put: interim chief executive officer Ray Gilmour.
Alberta’s government stunned the investment industry earlier this month by dismissing the entire board of directors and four senior leaders from Alberta Investment Management Corp. (AIMCo), including CEO Evan Siddall. One day later, after The Globe and Mail reported that Mr. Gilmour would be named as the pension fund manager’s interim CEO, the province confirmed his appointment.
At the time, Mr. Gilmour was the province’s most senior public servant. The government cast him as a steady hand to help steer AIMCo through a turbulent reset. But the appointment also raised questions about what it would mean to have a long-time provincial bureaucrat, hand-picked by government, steering the arm’s-length investment manager.
After the province named former prime minister Stephen Harper as AIMCo’s new board chair last week, and reappointed three ousted directors to the board, the pension fund manager is starting searches to fill some senior positions that are vacant.
Minister of Finance Nate Horner told The Globe last week that the new AIMCo board’s first priority will likely be to hire a chief investment officer. In late September, previous CIO Marlene Puffer left AIMCo less than two years after joining, and her duties were briefly split between two executives.
AIMCo also released a job posting looking for a chief of staff to serve as a “strategic confidante to our CEO,” seeking applications until Dec. 6. Previous chief of staff Jill Urbanoski was among those dismissed on Nov. 7.
But there appears to be no rush to name a permanent CEO to lead AIMCo or to replace Mr. Gilmour, meaning the CIO and chief of staff are likely to be his hires. And there are signals that Mr. Gilmour will have a chance to prove himself in the pension fund manager’s top job.
Mr. Gilmour is an accomplished and respected civil servant who was most recently deputy minister of Executive Council. Yet he lacks recent or senior-level experience in investing or finance that would be typical for someone running Canada’s sixth-largest pension fund manager, having last worked in the financial sector more than 20 years ago as a senior relationship manager for ATB Financial.
Almost as soon as Mr. Gilmour was chosen to be interim CEO, government officials signalled to people close to the process that he is likely to remain in the role at least long enough to see through the province’s plan for a change in course, according to three sources familiar with the discussions.
The Globe is not identifying the sources because they are not authorized to discuss the matter.
It will be up to AIMCo’s new board, led by Mr. Harper, to “assess the job of the interim CEO,” Mr. Horner said in the interview last week. Searching for a CIO “will probably be the first order of business and then we’ll – through the board chair, I guess – hear how they think the job’s being accomplished by the interim CEO.”
Mr. Horner spent two weeks as AIMCo’s interim board chair after the Nov. 7 dismissals but stepped down last Thursday when he announced Mr. Harper’s appointment.
Mr. Gilmour said he spent his early days at AIMCo meeting with staff and connecting with clients. “I am heavily focused on working to restore stability to the organization, and in particular, articulating to our investment teams the exceptional value they provide to our clients,” he said in a statement on Monday. “I am also focused on onboarding our new board chair and board members to help ensure our independence and good governance remain paramount.”
An AIMCo spokesperson declined to comment on a potential CIO search.
AIMCo manages investments on behalf of 17 pension, endowment, insurance and government clients in Alberta, including the $24.3-billion Heritage Savings Trust Fund, which was set up to help invest in the province’s economic future.
When the provincial government opted for a major overhaul of AIMCo’s leadership, it said the investment manager’s costs had risen rapidly and its performance hadn’t kept pace. AIMCo’s former interim chair Kenneth F. Kroner, who was among the directors dismissed two weeks ago, has pushed back, saying it mostly beat internal benchmarks and had lower costs than most peers.
Nevertheless, Mr. Horner has opted for a swift change in direction. “We thought it was prudent to have a quick return to a clean slate … an opportunity for a reset,” he said.
The government’s unorthodox approach has raised concerns about whether top-tier executives can be convinced to join AIMCo in a period of turmoil.
“The problem is this is an incredibly specialized business – pension fund management,” said the opposition New Democratic Party Leader, Naheed Nenshi, in an interview last week. “We want to make sure that we’re hiring people who are amazing. But who’s going to want to come here when they know that the government doesn’t treat this arm’s length, and uses it as a political arm?”
Mr. Horner said the government won’t press AIMCo. There “may be some minor tweaks” to the mandate document that outlines AIMCo’s relationship to the government, he said, but its main tenets – including AIMCo’s independence – are expected to remain intact.
Alberta Premier Danielle Smith has signalled a desire to change the way the Heritage Fund is managed, aiming to grow it to $250-billion or more over the next 25 years. In recent weeks, the government has incorporated a new entity, the Heritage Fund Opportunities Corp., that can invest and manage Crown assets, and the government has promised to give more details in the coming weeks.
In the meantime, Mr. Harper and Mr. Gilmour will be instructed to keep AIMCo’s costs under control. “We’ll be making that clear when we give [Mr. Harper] the new mandate and roles document,” Mr. Horner said.
With a report from Kelly Cryderman.