Alberta Investment Management Corp. earned a 2-per-cent return in the first half of the year, rebounding from a volatile first quarter that has prompted the pension fund manager’s clients to shift toward lower-risk investments.
AIMCo’s investment gain through June 30 was modest when compared with a 5.4-per-cent gain in the same six months last year. Its balanced fund, which reflects a typical mix of client assets, earned 2.1 per cent, according to a midyear update the pension fund manager released on Wednesday.
After a tough start to the year for markets, marked by turmoil from constantly shifting tariffs levied by the United States, AIMCo and its clients are “quite pleased with a positive return year-to-date,” chief investment officer Justin Lord said in an interview.
A second-quarter rebound in stock markets helped keep AIMCo’s returns positive, and that upward trend has carried into the third quarter, Mr. Lord said. But as its client funds adapt to a less predictable investing environment, they are asking AIMCo to lean toward assets that are typically less risky.
In some cases, they are moving more of their investments into infrastructure-like assets that have longer time horizons and more stable returns. Some are still having conversations about boosting exposure to private credit, a booming market for loans to private companies, even as increased competition has put pressure on credit spreads.
“We have been seeing some allocation changes across client portfolios away from a global equity tilt to lower-risk jurisdictions or asset classes,” Mr. Lord said.
So far, that has not included any retreat on U.S. investments, though AIMCo is taking a harder look at the risks posed by less predictable U.S. policy positions and tensions with its trading partners.
“The U.S. isn’t going away. We don’t see drastic changes to that allocation,” Mr. Lord said, but he added: “With a perceived increase in risk comes a required increase in expected returns.”
Mr. Lord was promoted to chief investment officer in July as part of an overhaul of AIMCo’s senior leadership team instigated by Alberta’s government, which called for a “reset” of the government-owned fund manager.
AIMCo invests on behalf of 17 pension, endowment, insurance and government clients in Alberta. Its total assets increased to $182.9-billion, compared with $179.6-billion at the end of 2024.
Over the past 10 years, AIMCo’s balanced fund has earned an average annual return of 7 per cent, reaping net investment income of $69.9-billion.
First-half returns this year were driven mostly by gains on publicly traded assets such as stocks and bonds, which make up a majority of AIMCo’s portfolio.
Investments in privately owned assets such as infrastructure, real estate, private equity and renewable resources – which account for 35 per cent of AIMCo’s total portfolio – had “more tempered” first-half results, according to the pension fund manager’s midyear update.
AIMCo publishes detailed performance results for each asset class with its annual report.