The British Columbia Investment Management Corp. posted a combined net return of 6.1 per cent for its fiscal year, which ended March 31, 2019.
Adding $2 billion in value, the organization increased its assets under management to $153.4 billion and beat its combined market benchmark, which returned 4.5 per cent. Private assets drove the outperformance, with income generation and capital appreciation contributing, according to the BCI’s annual report.
Within real estate, which represents 15.8 per cent of assets under management, domestic assets returned 7.6 per cent, while global real estate posted a return of 12.2 per cent. Further, 3.5 per cent of total assets under management are mortgages, which returned 5.1 per cent for the year.
Private equity, representing 8.5 per cent of total assets, also yielded double-digit returns, at 16.5 per cent. During the year, the BCI committed $3 billion over 15 private equity finds — six of them new strategic relationships — and made acquisitions, including U.S. window coverings maker Springs Window Fashions and payment solutions provider VeriFone Holdings Inc.
“Our results reflect solid performance from all asset classes despite the uncertainty and volatility in the markets,” said Gordon Fyfe, chief executive and investment officer of the BCI, in a press release. “These contributions signal the success of our strategic focus since 2015 of adopting an active, in-house approach that emphasizes private markets. Adding $6.1 billion in value over the last five years is a proud accomplishment for the entire BCI team. Our investment decisions go a long way towards building the financial futures for our clients in the province of British Columbia.”
Infrastructure, which totals 8.4 per cent of assets under management, was also a strong contributor to returns, at 9.9 per cent. During the fiscal year, the BCI committed $1.2 billion in infrastructure assets, including taking on an equity position in North American container terminal operator GCT Global Container Terminals Inc., as well as expanding its holdings in Puget Sound Energy, a U.S. utility company.
Public markets, consisting of both fixed income and equity investments, represent 61.8 per cent of asset managed by the BCI, according to the report. Among fixed income, short-term bonds returned 2.2 per cent, nominal bonds 5.6 per cent and real return bonds 2.7 per cent. Canadian and global public equities posted 6.9 per cent and 7.8, respectively, while emerging market stocks dragged things down with a negative 5.3 per cent return.