AIMCo faces uncertainty as Alberta resets leadership, citing cost concerns and shifting priorities
A meeting designed as a leadership retreat for senior staff at the Alberta Investment Management Corporation (AIMCo) quickly turned into a dramatic overhaul of the organisation, according to BNN Bloomberg.
Evan Siddall, then-CEO, had gathered around 170 senior employees at The Westin Edmonton for a session on “how to lead from a place of joy” taught by The Moth, a storytelling nonprofit.
The atmosphere shifted abruptly when Alberta Finance Minister Nate Horner arrived to deliver unexpected news.
Horner informed Siddall and three other executives that they were being dismissed. Their phones and laptops were confiscated before they left the building. Horner then addressed the remaining staff to announce the removal of the entire board of directors.
The move highlighted the Alberta government’s intention to assert control over AIMCo.
“To restore confidence in the agency, Alberta’s government has decided to reset the investment corporation’s focus with a new CEO and board,” the government stated.
Horner assumed the role of interim chair and sole director. The conservative provincial government has plans to cut costs and overhaul the pension fund manager’s operations.
AIMCo, one of Canada’s largest pension funds managing $169bn, is part of the group of funds known as the “Maple Eight.”
These funds are celebrated globally for their independence from political influence, internal asset management, and ability to attract top talent. AIMCo’s investments include partnerships with prominent firms such as Blackstone Inc. and KKR & Co.
However, the government’s intervention has raised concerns about politicisation.
“No well-run firm replaces all of its executive team and whole board at once,” said Alexander Dyck, a finance professor at the University of Toronto’s Rotman School of Management. “That’s a recipe for disaster.”
Siddall, who joined AIMCo in July 2021, took over after the firm lost $2.1bn during the pandemic on a market volatility bet.
He aimed to modernise operations, including expanding into global markets with offices in New York, Singapore, and Calgary. He also launched a focus on diversity and inclusion by hiring a chief people officer and investing in green initiatives.
However, his leadership style and expenditures clashed with Alberta’s fiscally conservative government. While costs were reportedly near the bottom of AIMCo’s peer group in 2022, staff costs increased by 71 percent between 2019 and 2023, and headcount grew by 29 percent.
Third-party management fees also rose by 96 percent during the same period. One controversial expense involved a multimillion-dollar contract with BlackRock Inc. for portfolio management software.
Some insiders defended these decisions, arguing they were necessary for growth. Others viewed them as excessive.
“AIMCo hired the talent necessary to support this client-led growth, and this should not be misinterpreted as evidence of costs being out of control,” former board Vice Chair Ken Kroner wrote in a letter to government officials.
The Alberta government opposed some of Siddall’s initiatives, including opening an office in high-end One Vanderbilt in New York. Critics viewed these actions as a shift away from Edmonton’s economic base, where AIMCo supports the local economy.
Alberta Premier Danielle Smith, a vocal advocate for the oil and gas sector, has expressed frustration with green investment strategies. Recently, she criticised federal rules to cap oil and gas emissions, calling them detrimental to the province’s interests.
Siddall’s approach, which included creating a $1bn energy transition fund, clashed with the province’s reliance on fossil fuels.
Although he rejected fossil-fuel divestment, his focus on decarbonisation and posts about climate initiatives added to tensions. His leadership team faced scrutiny for high turnover, with four chief investment officers in three years and departures of key executives during his tenure.
AIMCo’s recent turmoil has left staff uncertain about the organisation’s future. The government’s approach has stoked fears of further job cuts and pay reductions, with some employees already exploring opportunities elsewhere.
AIMCo, which has historically attracted talent from firms like Royal Bank of Canada and Barclays Plc, risks losing its competitive edge.
While AIMCo has remained cost-competitive, ranking in the lowest third among peers in a 2022 study by CEM Benchmarking, its trajectory raises questions.
The fund beat its benchmarks in two of Siddall’s three years, and internal surveys indicated improved employee morale. However, the government’s intervention reflects a different set of priorities.
The government’s actions suggest an alignment with Alberta’s economic reliance on oil and gas revenues, which form part of AIMCo’s managed funds.
Reports indicate that former Prime Minister Stephen Harper is under consideration to lead the board, further reflecting the government’s conservative focus.
Pension expert Alexander Dyck cautioned against such interventions, saying, “You’re kicking at the foundation, and the concern is that when you kick at the foundations enough, at some point they’re all gonna fall down.”
The sweeping changes, which began at The Westin Edmonton, could reshape AIMCo’s operations and influence Canada’s broader pension fund model, historically known for its independence from political interference.
