Asset allocators are looking for innovative managers

Pension fund allocators were mainly participants in this event family officesinvestment funds and financial institutions. This year, they were particularly interested in meeting companies specializing in crypto assets and quantitative investing, based on machine intelligence and data analysis, says Charles Lemay.

Watch talent in montreal

Many big players are represented, including Caisse de dépôt et placement du Québec and Hydro-Québec, as well as several financial institutions. Most of the customizers came from Montreal. Dozens have come from Ontario. Five traveled from the United States and one from Europe.

Organizers first received the Texas Teachers’ Retirement System, one of the largest pension funds in the United States, which has more than 1.7 million members and $231 billion in assets under management.

“They specialize in emerging managers. They wanted to see the talent we have in the field in Montreal,” says Charles LeMay.

This talent was particularly represented by the Montrealers Bastion and Converium, which attracted the attention of many dedicated. Among the Canadian companies that held several meetings were Auspice, of Calgary, and Bonnefield, a Toronto-based firm that specializes in financing farmland leases.

A defining moment for portfolio management

Allocators ont demontré de l’Intérêt for des strategies of fonds alternatifs avec une élevée performance et une exposition aux commodités, des long/short strategies qui ont performé au course des dernières années, insi que des actifs rels like me l’immobilier résidentiel et les farmland.

“Portfolio management is going through a critical time, as managers must demonstrate their ability to protect clients’ funds while generating alpha,” notes the president.

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The point of these meetings is not to immediately conclude an agreement, but to obtain a second date. “It takes an average of 6 to 7 meetings with an administrator before an investment is obtained,” says Charles LeMay.

This day represents a unique opportunity for startups to introduce themselves to large investors, because they rarely have the opportunity to reach the decision-makers of large organizations, notes Charles LeMay. “Because the challenge for most budding managers is growth,” he asserts.

Harder in Canada than in the United States

In this regard, emerging managers have a much steeper hill to climb in Canada than in reality for their American counterparts, says partner at Walter Global Asset Management. They receive less support from Canadian financial institutions than their American competitors.

Many US pension funds allocate 1% to 2% of their total assets under management to junior managers. “They find the talent there to train the next generation of entrepreneurs who will take charge.”

He complains that this lack of funding from financial institutions is limiting the growth of startups. To get funds, companies must be successful in proving to investors that they can adequately perform. However, the history of returns is built up over at least three years. So they must have strong backs to survive financially in the early years. The budget required to launch a company is about $1.5 million, according to the manager.

“To be successful, you have to have a good plan, well executed, with a good team. If there is even the slightest weak link, it is a risk.”

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CGE has about 75 members across Canada, Charles Lemay reports. “We already have up to a hundred. Some are no longer in business. Others have exceeded a billion in assets under management, which is the minimum to be considered as a startup manager.”

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