Public ambush sends alert to $169 billion Alberta pension: Government’s in charge

It was meant to be a bonding session.

Evan Siddall, then CEO of Alberta Investment Management Corporation (Aimco), brought together 170 senior staff at The Westin Edmonton for a workshop on "how to lead from a place of joy," presented by The Moth, a nonprofit specializing in storytelling. But the event took a sharp turn.

Nate Horner, Alberta’s finance minister, arrived to inform Siddall and three other executives that they had been dismissed. Their phones and laptops were confiscated, and the four were escorted out. Horner then delivered the news to the remaining Aimco employees, including the dismissal of the entire board.

The drastic purge signaled a clear message: Alberta’s government was asserting control over the organization.

Horner temporarily assumed the role of chairman and sole director of Aimco, while the conservative provincial government moved forward with plans to restructure and reduce costs.

“To restore confidence in the agency, Alberta’s government has decided to reset the investment corporation’s focus with a new CEO and board,” a government spokesperson said.

The Role of Canada’s Pension Funds

Canada’s largest pension funds, known as the Maple Eight, have long been regarded as some of the world’s most sophisticated investors. They are admired for their political independence, robust internal management, top-tier talent, and generous executive compensation.

Aimco, with about C$169 billion in assets, has invested alongside leading alternative asset firms like Blackstone and KKR. Now, however, the firm is under the control of a populist government that is considering appointing former Prime Minister Stephen Harper as chairman of the board. The province’s stake in Aimco, which manages public pensions and government funds, has made the selection of its leadership a critical issue.

Alexander Dyck, a pension expert and finance professor at the University of Toronto, cautioned, “No well-run firm replaces all of its executive team and whole board at once. That’s a recipe for disaster.”

Some insiders believe the purging of executives wasn’t politically motivated but rather a response to complaints about management turnover and rising costs during Siddall’s tenure. Others argue that the move challenges the Canadian model of independence that has been key to attracting top talent.

Regardless of the reason, the shake-up has created unease among employees, many of whom fear for their job security and compensation. Some have already begun seeking new opportunities, anticipating that Alberta’s government will treat Aimco like a state agency, slashing salaries.

The Impact of Executive Changes

Aimco has been without a permanent chairman since the end of 2023, and senior departures had already been occurring under Siddall’s leadership. The firm saw turnover in top positions, including its chief legal officer, chief corporate officer, and chief investment officer, Marlene Puffer, who left in September as government pressure mounted.

Politicians felt that Siddall’s approach, particularly his focus on corporate growth and high-profile expenditures, did not align with Alberta’s fiscally conservative values. One controversial decision was Siddall’s lease of office space in the One Vanderbilt building in New York, despite concerns from some staff about its cost.

While an internal report indicated that Aimco’s costs were among the lowest in its peer group in 2022, the perception of lavish spending raised concerns for the provincial government.

Rising Costs and Criticism

Siddall’s tenure also brought an increased focus on green investing, which was not well received by some in oil-rich Alberta. His initiatives, such as attending the COP climate conference in Egypt and advocating for decarbonization, contrasted with the province’s preference for a lower profile and support for the fossil-fuel industry.

During Siddall’s time, Aimco experienced significant growth, opening offices in New York, Singapore, and Calgary, and expanding staff. However, the global expansion raised alarms that Aimco was shifting its priorities away from Edmonton, where its presence has supported the local economy. Alberta Teachers’ Retirement Fund, one of Aimco’s clients, had previously raised concerns about rising costs.

Despite these criticisms, Siddall and his team argued that the growth in expenses was driven by client demands for increased investment in private assets, not mismanagement. But as costs climbed, staff salaries, and third-party management fees became a point of contention.

Government Intervention

Siddall’s strategy for diversifying Aimco’s investments, including a C$1 billion fund dedicated to the energy transition, was also seen by some as drifting away from Alberta’s principles. Complaints from within the government about this direction culminated in Horner’s decision to take action.

The Alberta government has reportedly been considering appointing Stephen Harper as chairman of Aimco. Harper, a trusted figure within the province’s conservative circles, could mark a major shift in the firm’s leadership.

The sweeping changes and government intervention have left Aimco in a state of uncertainty. Dyck warned that too much disruption could undermine the firm’s long-term stability, likening the situation to “the first kick” against the foundation of Canada’s pension system, which has traditionally been insulated from political interference. “When you kick at the foundations enough, at some point they’re all gonna fall down,” Dyck said.