BCI returns 7.5% and surpasses $250 billion in gross assets for fiscal 2024
27 Junio 2024 - 6:00AM
BCI returns 7.5% and surpasses $250 billion in gross assets for
fiscal 2024
British Columbia Investment Management Corporation (BCI) today
announced an annual combined pension plan return1 of 7.5 per cent.
The combined pension plan return represents the performance of
BCI’s six largest pension clients by assets under management (AUM).
Gross AUM2 grew from $233.0 billion last year to $250.4 billion
for the fiscal year ended March 31, 2024, a year-over-year increase
of $17.4 billion or 7.5 per cent. Net AUM totalled $229.5 billion,
with investment gains contributing $16.5 billion net of all fees to
this AUM growth.
“We delivered solid absolute results even through challenged
markets this year,” said Gordon J. Fyfe, BCI’s Chief Executive
Officer and Chief Investment Officer. “This was not a coincidence.
Rather, it speaks to our team’s diligent risk approach and prudent
liquidity management, which provided us with resilience and
capability to capture market dislocations and deploy capital. Our
investment teams continue to build a diversified portfolio,
emphasizing direct and unique deals around the globe.”
All asset classes generated positive returns apart from real
estate equity, where sustained market headwinds affected
valuations. Liquidity management was a key focus, including $1.25
billion in capital raised from BCI’s inaugural bond issuance, with
an additional $1 billion raised in the subsequent reopening of the
same series. Asset classes focused on rebalancing across strategies
to pursue opportunities in a muted deal environment. More than 10
direct deals were executed, further diversifying BCI’s portfolio
with entry into new sectors and geographies complementing our
strong Canadian footprint. Opportunities in infrastructure debt
increased, and three transactions were closed, increasing European
exposure. Private debt deployments were substantial at US$2
billion, focusing on differentiated opportunities in the middle and
lower middle markets and expanding the program to Asia. Within the
infrastructure & renewable resources and private equity
programs, an increasing focus on asset management boosted portfolio
valuations and created $17.6 billion in value over five years and
returned $31.1 billion in cash distributions to clients.
Long term, BCI continues to deliver consistent annualized
results, returning 7.5 per cent over a five-year period,
representing a cumulative value add3 of $2.2 billion. As a result,
BCI’s combined pension clients, with investment horizons extending
many years, maintain a healthy position with funding ratios ranging
from 103 to 133 per cent.
“Generating consistent long-term performance is imperative for
our clients as they require greater cash flows for their
obligations as pension plans mature,” added Fyfe. “Looking at our
annualized 10-year return, for our combined pension plan clients,
we outperformed the benchmark by 0.7 per cent, representing $8.3
billion of value add, consistently exceeding our clients’ nominal
and real actuarial discount rates.”
“Our one-year relative performance lagged the benchmark this
fiscal. This was no surprise as the exponential growth of the
‘Magnificent Seven’ tech stocks resulted in a very strong combined
pension plan benchmark hurdle. We build portfolios that provide
clients with the risk-adjusted returns they require over the long
term, and that’s where we will continue to focus on adding
value.”
RETURN SUMMARY FOR THE COMBINED PENSION PLAN
CLIENTS
|
|
Annualized Returns (%) |
|
|
1 Year |
|
5 Year |
|
10 Year |
|
15 Year |
|
20 Year |
Combined Pension Plan Return |
|
7.5 |
|
7.5 |
|
7.8 |
|
9.0 |
|
7.7 |
Benchmark |
|
11.6 |
|
7.2 |
|
7.1 |
|
8.1 |
|
6.9 |
Public Markets |
Annualized
Returns (%) |
|
1 Year |
5 Year |
10 Year |
Fixed Income |
|
|
|
Short Term |
5.2 |
2.1 |
1.7 |
Nominal Bonds |
1.9 |
0.7 |
2.5 |
Private Debt |
13.3 |
6.6 |
- |
Funding Program4 |
5.2 |
- |
- |
|
|
|
|
Public Equities |
|
|
|
Canadian Public Equity |
14.6 |
10.5 |
7.9 |
Global Public Equity |
26.5 |
12.8 |
12.2 |
Emerging Markets Public Equity |
10.1 |
4.5 |
6.2 |
|
|
|
|
Private Markets |
|
|
|
Infrastructure & Renewable Resources |
7.0 |
8.5 |
9.2 |
Private Equity |
6.0 |
16.0 |
16.7 |
Real Estate Equity |
(5.0) |
4.8 |
- |
Real Estate Debt |
6.9 |
4.9 |
4.6 |
An internal rate of return (IRR) methodology
is used to calculate returns for infrastructure & renewable
resources, private equity, and real estate equity. The assets and
benchmarks are as at December 31, 2023. Benchmarks are presented on
a time-weighted rate of return basis. |
HIGHLIGHTS
Corporate
- Expanded our total employees to 770, growing the global team
year-over-year by 8.3 per cent, including 34 professionals in the
London and New York offices, strengthening our physical presence in
these financial centres.
- Moved to fully embed ESG into corporate reporting, including
alignment with the IFRS Sustainability Disclosure Standards, and
began development of an internal ESG data platform.
Public Markets
- Exceeded $5 billion in cumulative participation in sustainable
bonds.
- Launched an unsecured debt program with an inaugural $1.25
billion senior unsecured 10-year bond offering, and a subsequent $1
billion reopening of the same series, with the highest possible
long-term credit ratings.
- Acted as an anchor investor in Overland Advantage, a direct
lending platform established by Centerbridge Partners in
partnership with Wells Fargo, which will also yield co-investment
opportunities.
- Executed $2.7 billion of deployments in Absolute Return
Strategies, which delivered strong one-year performance exceeding
12 per cent.
- Deployed net US$2.0 billion for the Principal Credit Fund and
achieved the strongest one-year performance since the fund launched
with a 13.3 per cent annual return for fiscal 2024.
Private Markets
- Concluded the take-private of Costa Group, Australia’s largest
produce supplier of fresh fruit and vegetables.
- Closed on three infrastructure debt investments, increasing
capital deployment in high-conviction sectors that benefit from
decarbonization and digitization in the U.S. and Europe.
- Committed US$300 million to Cube Highways Trust, the largest
road platform in India consisting of 18 toll and annuity assets and
made a separate commitment to the Cube Highways growth platform,
CH5, which targets further investments in India’s transportation
sector.
- Closed an investment in A2 Motorway, a leading European
public-private partnership motorway.
- Participated in an additional financing round for British
Columbia-based Photonic Inc., a quantum computing company,
positioning BCI as one of their largest shareholders.
- Committed a total of $2.9 billion to the private equity
program, including $2.2 billion to fund investments, reinforcing
strategic relations with existing managers, and allocated the
remaining $700 million to existing private equity direct
investments to support the companies’ growth.
- Deployed $3.3 billion in the real estate equity program to high
conviction and growth sectors such as data centres, student
housing, residential, and industrial globally.
- Committed $3.2 billion in real estate debt investments,
including Verve, an off-campus student housing and apartment, and a
cold storage distribution facility.
The 2023-2024 Corporate Annual Report is available at
BCI.ca.
All figures are in Canadian dollars unless otherwise
stated.
ABOUT BCI
British Columbia Investment Management Corporation (BCI) is
amongst the largest institutional investors in Canada, with C$250.4
billion in gross AUM as of March 31, 2024. Based in Victoria,
British Columbia, with offices in Vancouver, New York, and London,
U.K., BCI manages a portfolio of diversified public and private
market investments on behalf of its 29 British Columbia public
sector clients.
With a global outlook, BCI integrates ESG factors into
investment decisions and activities that convert savings into
productive capital to meet clients’ risk and return requirements
over time. Founded in 1999, BCI is a statutory corporation created
by the Public Sector Pension Plans Act. For more information, visit
BCI.ca or LinkedIn.
Except as otherwise indicated, returns are time-weighted rates
of return (TWRR) as at March 31, 2024. All returns are net of all
costs and fees. Investments are reported by the program within the
asset classes as set out in the clients' Statement of Investment
Policies & Procedures (SIPP). Benchmarks represent a weighted
combination of multiple indices specified in the clients' SIPP. The
indices may vary over time.
1 The combined pension plan clients reflect the investments of
BCI's six largest pension clients: BC Hydro Pension Plan, College
Pension Plan, Municipal Pension Plan, Public Service Pension Plan,
Teachers' Pension Plan, and WorkSafeBC Pension Plan.2 Gross assets
under management exclude market values for The Funding Program,
which are clients’ investment liabilities achieved through
government bond repurchase agreements and unsecured bond
issuance. 3 Cumulative value-add is the additional dollar
return that BCI generated for clients in excess of client
benchmarks through active investments, excluding the impact of the
centralized currency management program after all costs and fees.4
The Funding Program includes clients’ investment liabilities
achieved through government bond repurchase agreements and
unsecured bond issuance.
- BCI Combined Pension Plan Clients' Performance as at March 31,
2024