'A major reset': Alberta government dismisses AIMCo board and CEO, citing underperformance

The Alberta government announced Thursday that it has dismissed the CEO and board members of the Alberta Investment Management Corporation (AIMCo), citing concerns over rising operational costs and an increasing dependence on third-party services.

Finance Minister Nate Horner confirmed the departure of three additional executives from the public pension fund later that day. The changes aim to restore confidence in AIMCo, an Edmonton-based Crown corporation responsible for managing various public funds and pensions. According to the province, AIMCo’s operational costs and fees have grown considerably, yet these expenses have not been matched by corresponding returns.

To oversee the transition, Horner will serve as AIMCo’s interim board chair for up to 30 days, with a new chair to be appointed within that time. Once the chair is in place, the remaining 10-member board will be selected. “It seemed like it needed a reset, and that’s what we did today,” Horner stated at a press conference in Edmonton.

Horner clarified that he would not be involved in AIMCo’s investment decisions nor receive any compensation during his temporary role.

In a news release, the government highlighted a significant reduction in AIMCo’s internally managed funds, which dropped from 82% in 2019 to 67% by 2023. Additionally, AIMCo’s expenses for salaries, wages, and benefits rose from $129.7 million to $222.3 million during this period, while the fund’s annual returns have averaged 7.62% since 2019.

Appointment of Interim CEO Expected Soon
This leadership overhaul comes less than a year after Kenneth Kroner was named board chair, pending a permanent appointment. Kroner, who has served on AIMCo’s investment committee since 2017 and was previously a senior managing director at Blackrock Inc., will now be replaced. Horner announced that CEO Evan Siddall had been relieved of his duties on Thursday, and a new interim CEO is expected to be appointed in the coming days.

Siddall, who joined AIMCo in July 2021 after serving as the Canada Mortgage and Housing Corporation’s president and CEO, had led the organization through a major leadership restructuring following substantial losses from a volatility-trading program in 2020. That program, which lost AIMCo $2.1 billion during the pandemic-driven market crash, was subsequently ended, prompting a thorough review.

Press secretary Justin Brattinga described Horner’s temporary position as a “caretaker role” until the new chair is named. Horner explained, “We’ve been monitoring this closely, and it became clear that a significant reset was necessary.”

AIMCo manages the Alberta Heritage Savings Trust Fund, which has drawn increased interest from the current government. Alberta Premier Danielle Smith has outlined a vision to expand the fund’s value from $25 billion to between $250 billion and $400 billion by 2050 to reduce Alberta’s reliance on oil and gas revenues. Horner noted that further details on the Heritage Fund strategy would be shared by the end of the year.

The Alberta NDP responded to the leadership changes, calling it an “earth-shaking move” and urging the government to remove Horner from his interim role at AIMCo. The NDP proposed appointing a non-partisan interim board instead.

"AIMCo’s poor returns are a clear reflection of the UCP’s incompetence. We have raised concerns about their underperformance for years, pointing out AIMCo’s returns have been lower than those of the Canada Pension Plan. Previously, the UCP even suggested using AIMCo to manage a proposed Alberta Pension Plan," stated Court Ellingson, the Alberta NDP finance critic. "Given these developments, any plan for an Alberta Pension Plan should now be completely off the table."