Investment Results

As the administrator of the Plan, LAPP Corporation has developed an investment policy — known as the Statement of Investment Policies and Procedures (SIPP) — that establishes the investment principles, policy guidelines, and approach to investment management of the Plan’s assets. Alberta Investment Management Corporation (AIMCo) is responsible for the day-to-day investment management of LAPP’s portfolio of assets in accordance with the SIPP. By legislation, the Government of Alberta has designated AIMCo as the sole provider of investment management services to LAPP.

In Q1, investments within the Plan earned +3.38% while the respective policy benchmark’s return was +3.58%, a 0.20% difference. The Plan’s investment strategy tried to address various market headwinds including persistent core inflation, Ukraine conflict, and restrictive monetary policies from central banks.

On an absolute basis in Q1, the two best-performing assets were Global Equity and Long Bonds, as investors improved their sentiment across global capital and equity markets. The cooling of inflationary pressures and the halting of interest rate hikes supported this change in sentiment. Real Estate valuations, specifically in foreign real estate, experienced downward adjustments and impacted the absolute returns of this illiquid asset class during the first three months.

From a relative performance perspective, Private Equity and Inflation Sensitive and Alternative assets were the largest detractors of excess return, having earned -1.44% and -0.48% respectively in Q1.

As at March 31, 2023, the Fund posted a four-year annualized return (net of fees) of +5.80%, outperforming the policy benchmark of 4.80% by +1.00%. All major asset classes apart from Public Equities generated positive excess returns during the four-year period. Private Equity had the largest excess returns of +10.20% for the Fund, beating its benchmark return of +8.81%.

For detailed quarterly investment results of the Plan, visit Funding and Investment.