►
Description
Legislative Assembly of Alberta
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B
Good
morning,
everyone
I'd
like
to
call
the
meeting
of
the
standing
committee
on
the
Alberta
Heritage
savings
trust
fund
to
order
welcome
everybody,
I
hope
you
didn't
have
too
much
difficulty
getting
in
past
the
road
closures
today,
but
Tom
welcome.
My
name
is
Ron
Orr
MLA
for
Lacombe
panocha
and
chair
of
this
committee,
I'd
like
to
ask
the
members
and
the
guests
at
the
table
to
introduce
themselves
for
the
record,
and
then
I
will
call
on
those
joining
by
video
conference
and
we'll
begin
to
my
right.
Please.
C
B
Wonderful,
thank
you,
I
think.
That's
everyone
today,
record
I
will
note
one
substitution
today:
Mr
Smith
for
honorable
Miss
Isaac,
just
the
usual
few
housekeeping
items
to
address.
Please
note
that
the
microphones
are
operated
by
Hansard
staff.
You
don't
have
to
deal
with
them.
Committee
proceedings
are
live
streamed
on
the
internet
and
broadcast
on
Alberta
assembly
TV.
Both
the
audio
and
the
video
streams
and
transcripts
of
meetings
can
be
a
set
accessed
via
the
Legislative
Assembly
website.
Those
participating
by
video
conference
are
encouraged
to
please
turn
on
your
camera.
B
While
speaking
and
mute
your
microphone
when
you're,
not
speaking
members
participating
virtually
who
wish
to
be
placed
on
the
speakers
list
are
asked
to
message.
The
committee
Clerk
and
members
in
the
room
are
just
asked
to
please
signal
the
chair
or
the
clerk.
Please
set
your
cell
phones
and
other
devices
to
silent
and
I
think
today.
We
should
maybe
just
also
recognize
that
this
is
a
rather
somber
day,
I
trust
that
most
of
you
will
be
able
to
join
the
procession
outside
after
we're
done
here
and
yeah.
B
B
K
B
B
L
B
B
I
G
B
B
It
was
released
by
treasury
board
in
Finance
on
February
28th
members
were
notified.
It
was
posted
on
the
committee's
internal
website
for
members,
The,
Heritage,
trust
funds,
Alberta,
Heritage
savings,
trust
fund
act,
mandates,
of
course,
that
the
functions
of
this
committee
is
to
receive
and
review
quarterly
reports
on
the
operation.
B
The
results
of
the
Heritage
fund
so
we're
pleased
to
have
representatives
from
aimco
and
treasury
board
and
finance,
and
the
auditor
General's
office
they've
already
introduced
themselves
they're
here
to
provide
us
with
an
overview
of
the
report
and
answer
any
question
that
members
may
have,
and
so
I'll
turn
the
floor
over
to
you
folks,
and
you
can
begin
when
you're
ready
with
whoever
is
going
to
start
Mr
Thompson.
Thank.
H
You
thank
you
Mr,
chair
members
of
the
committee.
Thank
you
good
morning,
I'm
pleased
to
appear
before
you
today
to
present
the
2022-23
third
quarter,
results
for
the
Alberta
Heritage
savings
trust
fund
on
behalf
of
the
ministry
of
Treasury
board
and
finance
I'd
like
to
begin
by
reminding
us
all
of
the
legislative
mission
of
the
fund,
which
continues
to
be
to
maximize
long-term
Financial
returns.
While
balancing
the
risk
of
losses.
H
The
fund
remains
well
positioned
to
meet
these
stated
objectives.
The
fund
returned
3.6
percent
over
the
third
quarter,
which
is
a
welcome
Trend
reversal
for
this
fiscal
year.
As
you
are
well
aware,
the
first
two
quarters
of
this
fiscal
year
were
marked
by
significant
challenges
to
Global
markets,
and
this
is
the
first
quarter
with
positive
returns
for
the
22-23
fiscal
year.
H
The
third
quarter
performance
is
nearly
reversed
to
the
negative
impact
of
the
first
two
quarters,
but
here
to
date,
the
fund
is
still
down
by
approximately
244
million
dollars.
The
net
asset
value
of
the
fund
has
rebounded
to
18.6
billion
at
the
end
of
December,
which
is
almost
back
to
the
historic
eyes
of
18.7
billion
recorded
on
March
31st
2022..
H
H
The
asset
makes
the
end
of
the
third
quarter
was
slightly
underweight,
fixed
income
assets
at
19.3
percent
and
equities
at
45.9
when
compared
against
its
long-term
targets.
To
offset
this
inflation,
sensitive
and
alternative
assets
were
slightly
overweight
at
34.4
percent,
our
asset
manager,
aimco,
is
managed
mandated
to
manage
the
assets
of
the
portfolio
within
specified
ranges
around
the
long-term
targets
where
opportunities
exist
to
add
value.
Inflation,
sensitive
and
alternative
assets
currently
include
investments
in
real
estate
infrastructure
and
renewable
resources.
H
Fiscal
year.
To
date,
these
assets
have
returned
to
combine
7.7
percent
for
the
fund
in
comparison
over
the
same
time
frame,
fixed
income,
Investments
have
fallen
by
3.3
percent
and
Equity
Investments
are
5.1
percent.
Lower
alternative
assets
perform
well
in
an
inflationary
environment
when
compared
to
other
asset
classes,
as
they
produce
cash
flows
more
linked
to
that
economic
environment,
therefore,
being
overweight,
these
assets
has
benefited
the
fund
throughout
the
reporting
period.
H
The
volatility
and
rates
continues
to
impact
the
equity
and
fixed
income
market
and
losses
in
these
asset
classes
have
had
a
direct
impact
on
the
investment
income
earned
by
the
fund.
However,
the
investment
strategy
for
the
Heritage
fund
continues
to
be
a
focus
on
maximizing
long-term
returns
and
not
reacting
to
short-term
movements
and
valuations
and
markets.
H
H
H
H
Active
management
of
the
heritage
of
the
Heritage
fund
has
the
benefit
of
limiting
the
potential
losses
the
fund
could
incur
and
capitalizing
on
opportunities
that
are
not
available
through
a
passive
management
approach.
That
Target
is
that
actual
returns
should
be
at
least
one
percent
higher
than
the
returns
of
the
passively
managed
portfolio.
H
Over
five
years,
the
fund
has
returned
0.4
or
40
basis
points
more
than
if
it
had
been
invested
passively
for
the
third
quarter.
Investment
income
was
negative,
244
million,
as
I've
said,
which
includes
90
million
in
expenses.
The
main
detractor
from
investment
income
has
been
the
decline
in
global
Equity
markets.
H
Given
the
current
level
of
Alberta
CPI,
it
isn't.
It
is
estimated
that
the
fund
will
retain
at
least
600
million
dollars
for
inflation
proofing.
If
the
income
generated
by
the
fund
continues
to
be
less
than
that
amount,
no
transfers
from
the
fund
can
take
place
as
per
the
legislation.
Overall,
the
fund
remains
well
positioned
for
the
current
economic
landscape.
F
Morning,
yeah
good
good
morning,
all
it's
a
pleasure
to
be
here
to
Echo
Mr
chair.
It
is
indeed
a
somber
day
today,
and
so
we
acknowledge
acknowledge
that
I'll
spend
just
a
few
minutes,
giving
you
an
update
on
aimco
and
then
I'll
turn
it
over
to
miss
puffer.
To
speak
about.
To
give
you
an
update
on
the
Heritage
fund,
Mr
siddal
is
couldn't
join
us
this
morning.
He
sends
his
regrets.
F
F
We
are
also
very
pleased,
or
we
are
very
pleased
to
announce
that
Miss
Marlene
buffer
joined
us
as
as
Chief
investment
officer
last
month.
She
will
introduce
herself
momentarily
in
addition
to
providing
remarks
on
the
Heritage
fund
with
Miss
puffer
joining
us.
The
the
investment
excuse
me,
the
executive
team
at
Gameco
is
fully
in
place
now.
F
So
that's
that's
a
huge
positive
relative
to
the
transition
path
that
we've
been
on
over
the
last
year
year
and
a
half
a
couple
of
other
updates,
and
mostly
these
ones
are
directed
towards
building
capabilities
that
we
would
deliver
to
the
Heritage
fund,
our
dual
clients,
as
we
look
forward
the
next
10
10
plus
here.
So
firstly,
in
that
category
and
as
as
described
in
a
copy
strategy,
we
will
be
opening
International
offices
in
New,
York
and
Singapore.
F
The
key
thrust
of
opening
International
offices,
similar
to
our
peers,
is
to
expand
the
investable
universe.
The
opportunity
set
that
that
the
Heritage
fund
and
the
clients
would
have
access
to
as
we
as
we
look
look
forward.
We'll
start
with
the
initial
Focus
will
be
on
infrastructure
on
private
debt
and
Loan
and
illiquid
assets
more
generally.
But
again,
the
thesis
is
to
be
able
to
access
the
best
opportunities
wherever
they
may
lie
along
the
same
dimensions.
F
G
Thanks
Summit:
well,
it
is
an
honor
to
be
here
and
to
serve
so
many
albertans
having
joined
aimco
all
of
eight
weeks
ago,
as
Chief
investment
officer
I'd
like
to,
in
addition
to
acknowledging
the
somber
nature
of
today
and
and
all
the
police
services
who
are
outside
the
door,
I'd
like
to
acknowledge
my
great
grandfather,
William
Franklin
puffer.
He
served
in
the
very
first
legislative
assembly
of
Alberta,
and
that
was
in
1905
and
he
was
re-elected
twice
in
the
district
of
Lacombe
and
he
served
until
1917..
G
G
G
The
organization
is
implementing
a
number
of
important
strategic
initiatives,
and
these
will
ensure
that
the
backbone
of
Systems
and
Technology
and
people
are
well
aligned
to
ensure
that
we
can
deliver
the
strong
risk-adjusted
returns
that
all
of
our
clients
need
well
into
the
future,
and
it's
really
critical
so
that
we
can
continue
to
be
Innovative
as
market
conditions
evolve
and
and
we're
making
progress
on
the
geographic
expansion,
as
mentioned
in
New,
York
and
Singapore,
to
facilitate
this.
Of
course,
our
investment
focus
is
on
the
long
term.
Mr
Thompson
gave
a
summary.
G
2022
was
a
challenging
year
in
the
markets.
I
am
pleased
to
note
that
the
Heritage
fund
returned
3.6
percent
for
the
the
last
quarter,
although
the
return
remains
slightly
negative
for
the
fiscal
year
through
the
end
of
2022.,
it
was
above
the
Benchmark
return
for
that
period,
which
was
minus
1.7
percent,
and,
of
course
this
is
in
the
context
of
healthy
long-term
returns.
10
years
of
eight
and
a
half
percent
for
the
Heritage
fund,
2023
has
started
off
with
a
lot
of
turmoil
in
the
banking
sector.
G
The
direct
exposure
of
aimco
client
portfolios
to
the
affected
financial
institutions
was
immaterial,
but
the
financial
Market
volatility
is
certainly
heightened
and
the
indirect
impacts
on
financial
markets
and
policy
leaders
are
are
continuing
to
unfold
liquidity.
Management
in
this
kind
of
environment
is
Paramount.
The
Heritage
fund
liquidity
needs
are
very
well
covered.
In
fact,
we've
recently
completed
a
thorough
review
of
how
we
Define
and
manage
liquidity
across
all
of
our
clients,
and
one
key
change
was
to
make
the
stressed
scenario.
G
That's
our
focus
of
analysis
and
planning
to
be
more
conservative,
so
we
can
be
quite
comfortable
that
that
we're
covering
that
off
very
well.
The
recent
market
conditions
certainly
highlight
the
importance
of
diversification,
careful
oversight,
risk
management
and
the
benefits
of
the
private
asset
classes.
That
Ahmed
referred
to
the
diversification,
benefits
and
inflation
hedging
characteristics
of
investments
in
the
Heritage
funds.
35
percent
allocation
to
real
estate
infrastructure
and
renewable
resources
have
really
been
evident.
These
asset
classes
have
outperformed
public
markets
in
recent
periods
fiscal
year.
G
These
alternative
asset
classes
will
continue
to
be
important
contributors,
given
that
the
remedies
for
high
inflation
are
for
inflation
to
drop
the
hard
way
through
aggressive,
fed,
tightening
or
the
easier
way
through
below
Trend
growth.
We
need
all
the
tools
in
the
toolkit
to
get
through
this.
So
that
concludes
my
opening
remarks.
Elementary
and
I
look
forward
to
responding
to
your
questions,
wonderful.
B
L
L
So
thank
you
for
your
opening
comments.
My
question
to
start
us
off
is
around
Note
7
in
the
third
quarter
report,
just
around
investment
expenses,
and
because
I
was
comparing
the
investment
expenses
in
this
third
quarter
report
to
the
ones
from
2021
and
2020,
and
it
appears
that
we've
got
our
first
significant
increase
in
investment
expenses,
now
understanding
that
they
are
charged
on
a
cost
recovery
basis,
and
but
can
you
please
speak
to
why
we
are
seeing
an
increase
in
the
investment
expenses.
F
One
of
the
things
we
do
to
ensure
that
there
is
there
is
discipline
around
this
process
is
that
we
compare
ourselves
with
peers
across
across
the
industry,
but
but
particularly
within
within
the
pension
management
industry
and
within
that,
historically,
it
goes
at
the
lower
end
of
the
of
the
spectrum.
So
the
first.
So
the
first
first
aspect
is
that
many
of
the
things
we
described
in
terms
of
opening
offices
internationally,
looking
at
the
technology
platform
Etc,
is
simply
making
investments
into
the
future
strength
of
the
platform.
F
So
that's
that's
number,
two
and,
and
then
thirdly,
within
the
overall
overall
bucket
of
of
expenses,
the
third
category
tends
to
be
performance
expenses,
and
that
of
course,
goes
up
and
down
depending
on
the
performance
of
the
external
managers.
So
that's
that's
sort
of
a
broad
brush
description
of
the
changes
in
the
expenses.
L
Very
much
for
that
and
understanding
kind
of
the
three
factors
you've
you've
described.
I
think
it
was
it's
a
good
thing
if
compared
to
peers
aimco
is
is
at
the
lower
end.
Do
these
increases
in
our
investment
expenses
now
put
us
more
at
parity?
Are
we
still
at
the
lower
end
when
looking
at
this?
Do
you
anticipate
these
expenses
to
continue
to
increase
when
it
comes
to
the
opening
of
international
offices
and
some
of
that
expansion?
F
So
we
do
so,
we
are
still
relatively
relatively
below,
which
reflects
which
reflects
equally
the
under
investment.
The
fact
that,
amongst
our
peers,
we
are
one
of
the
ones
with
the
least
amount
of
international
presence,
for
example,
and
the
other
other
bit
fair
to
say
more
philosophically
is
Shifting
the
focus
to
deliver
the
best
risk,
adjusted
returns
net
worth
net
of
cost
risk
adjusted
returns
to
clients,
rather
than
simply
focusing
on
a
component,
which
is
the
cost
to
the
extent
that
you
know.
F
Opening
an
office,
for
example
in
Singapore,
gives
us
better
opportunities
to
access
infrastructure
transactions
in
in
in
Asia
the
ability
to
impact
the
overall
overall
net
return.
That
of
cost
is
the
focus
and
that
we
believe
serves
our
clients
collectively
and
the
Heritage
fan
well
and
is
consistent
with
the
Mandate
for
the
Heritage
fund
as
well.
C
And
good
morning,
every
with
the
somberness
of
the
day,
thinking
of
the
two
fallen
officers
and
their
families
this
morning
and
turning
to
the
fund
I
just
I,
think
I
may
know
the
answer
to
this
question,
but
I
want
to
ask
it
anyway.
Last
week
the
legislature
passed
a
bill
that
would
allow
the
fund
to
retain
all
of
its
net
investment
income
and
I
just
wanted
to
know
your
best
guess.
C
Had
this
rule
been
introduced
since
the
start
of
the
fund
in
1976,
could
you
provide
an
estimate
on
how
much
the
expected
net
worth
of
the
fund
would
be
today
and
further
to
that?
If
you
can
estimate
for
us
what
would
the
expected
annual
investment
income
off
of
this
larger
fund
look
like?
Had
we
done
that
from
the
beginning.
H
I'm
happy
to
answer
that
one
and
in
we
actually
have
done
a
bit
of
work
in
anticipation
of
that
kind
of
question
on
the
back
of
the
changes
to
the
to
the
Heritage
fund
act.
So
we
do
have
a
number,
but
there's
a
few
caveats
that
I'd
like
to
give
before
I,
actually
throw
a
number
at
you
to
come
to
the
value
of
the
fund.
H
H
You
would
you
will
invest
a
much
larger
Fund
in
a
very
different
way
than
you
would
the
current
fund,
for
example,
but
assuming
that
the
fund
had
earned
the
returns
it
has
earned
over
the
past
few
years
and
all
of
the
investment
income
that
had
been
drawn
out
had
been
left
in.
We
also
have
to
assume
that
between
1976
and
1995
we
actually
spent
money
on
capital
projects
out
of
the
Heritage
fund.
So
there
was
hospitals,
built
and
Parks
I
believe
we
assumed
that
those
monies
were
still
spent
on
in
that
fashion.
H
So,
with
all
of
those
assumptions
made,
we
come
to
a
value
at
the
end
of
2022
March
31st
2022
of
approximately
270
billion
dollars
would
be
the
value
of
the
fund
if
we
want
to
project
earnings
and
again
these.
These
are
subjects
to
many
caveats
and
many
assumptions,
but
it
the
simplest
estimate
that
I
could
give
would
be
to
say
if
we
look
at
our
tenure,
our
10-year
return
on
investment,
so
our
eight
and
a
half
percent
over
ten
years
is
what
we've
expected
to
earn.
C
I
tried
to
Noodle
through
that
myself
and
figure
out
what
I,
what
my
estimation
would
be
I'm
just
wondering
further
to
that.
Given
your
comment
around
the
fact
that
you
know
it's
hard
to
know
if
we'd
had
a
larger
fund
and
we've
been
investing
in
it
all
along,
we
would
have
invested
differently
and
and
likely
had
in
theory,
economies
of
scale
and
a
higher
outcome.
C
H
Trying
to
predict
the
future
is,
has
ruined
many
Financial
careers,
so
I
would
be
cautious
in
in
that
answer.
I
think
the
simplest
way
to
Envision.
It
is
to
Simply
look
at
the
income
that
has
been
drawn
out
over
the
years
and
assume
that
it's
not
so
the
fund
will
grow
because
money's
not
being
drawn
out
of
it
in
terms
of
higher
rates
of
return.
H
H
So
we
will
see
growth
through
that
in
terms
of
additional
income
yeah,
there
will
be
higher
returns
based
on
the
higher
principal
value.
But
it's
important
to
remember
also
that
in
years
when
there
are
losses,
there
will
be
higher
losses.
So,
for
example,
if
if
we
were
at
270
billion
at
the
moment,
our
loss
today
would
be
somewhere
in
the
range
of
two
and
a
half
to
three
billion
dollars
today.
B
M
Thank
you,
Mr,
chair
I,
just
a
quick
question
for
finance
years
ago,
we
heard
I
think
it
was
in
either
late
19
or
early
20..
We
heard
that
there
was
a
review
of
the
investment
mandate
for
the
Heritage
fund,
including
exploring
you
know,
moving
from
some
active
management
into
more
passive
management.
We
heard
at
that
time.
H
Certainly
I'm
happy
to
answer
that
and
you're
correct.
That
was
a
commitment
made
in
1920
I
think
fiscal
year
that
work
is
underway.
We
have
done
an
internal
review
of
the
investment
policy.
We
have
worked
with
aimco
to
look
at
the
asset
mix
and
and
trying
to
find
a
new
assamix
going
forward
or
see
if
the
asset
mix
is
appropriate.
H
None
of
that
work
is
is
available
to
share.
At
the
moment.
We
have
just
we're
just
in
the
closing
phases
of
a
request
for
proposal
to
hire
an
external
consultant
to
lead
us
through
another
asset,
mixed
study,
and
that
will
include
considerations
of
the
changes
to
the
fund
through
the
the
changes
to
the
Heritage
fund
act.
M
Yeah
sure
so
at
that
time,
of
course,
there
was
a
time
when
our
passively
managed
Investments
were
doing
pretty
well,
because
Equity
markets
were
kind
of
on
a
terror
at
that
time,
and
so
I
was
I
think
maybe
increasingly
fashionable
to
talk
about
oh
well.
Maybe
we
can
do
some
more
passive
management.
M
H
Certainly
on
on
the
you
know,
as
asset
owners,
we
love
the
performance
and
you're
correct.
There
was
there
was
quite
a
drive
to
consider
passive
management
as
part
of
the
mix,
and
those
are
discussions
that
are
always
ongoing.
You
know
the
the
funds
stated
beliefs
or
that
active
management,
active
management
adds
value.
H
Those
beliefs
are
still
in
place
and
they're
still
within
the
policy
with
a
fund
where
we
will
not
be
drawing
income
out
as
much
unless
in
times
of
stress,
perhaps,
but
we
would
think
that
active
management
would
would
still
benefit
the
fund
and
we've
seen
40
basis
points
about
performance
over
the
over
the
term
of
the
over
the
five-year
term.
Thank
you.
H
C
C
My
husband
will
tell
you
he
manages
our
portfolio
and
he
will
tell
you
it's
been
a
very
stressful
time
to
be
an
investor
and
I'm
sure.
You
can
appreciate
that
I'm.
Just
wondering
all
of
this
considered.
All
of
this
volatility
I
was
impressed
to
see
that,
given
that
volatility,
the
fund,
how
the
fund
had
performed
and
on
page
one
of
the
report,
you
mentioned
that
you
earned
a
3.6
return,
despite
all
of
those
factors
in
the
quarter,
ending
December
31
of
22.
C
G
G
These
inflation,
sensitive
assets
are
are
positively
exposed
to
an
inflationary
environment,
and
many
of
them
have
characteristics
where
they
can
directly
pass
on
higher
inflation
to
their
customers.
Think
about
you
know
in
real
estate,
tenants
pay
more
as
inflation
goes
up
as
they
renew
their
leases
as
an
example.
G
So
over
the
last
18
months,
aimco
has
undertaken
initiatives
alongside
the
Heritage
fund
that
include
a
review
of
the
private
debt
and
Loan
allocations.
Public
Equity,
optimization,
which
is
partly
about
coming
back
to
the
previous
question,
about
active
and
passive
and
really
making
it
a
a
a
a
conscious
choice
in
the
current
market
environment,
about
where
we
think
there's
value
to
be
added
actively
versus
areas
where,
for
example,
the
US
S,
P,
500,
big
large
cap
equities
in
the
U.S
as
an
example,
are
a
place
where
it's
tougher
to
add
value.
G
So
we're
being
very
thoughtful
about
that
review
to
optimize
the
public
Equity
portfolio
and
we're
looking
at
at-risk
target
analysis
to
to
determine
the
right
levels
of
risk
appetite
and
how
to
implement
that.
So
these
initiatives
combined
are
really
aimed
at
ensuring
that
the
fund
is
positioned
to
provide
diverse
sources
of
return
to
aim
to
be
sustainable
in
a
variety
of
Market
environments.
K
G
G
C
G
L
Thank
you
very
much
and
thank
you
for
those
answers.
Those
were
really
helpful
and
welcome
to
miss
puffer
is
incoming
CIO.
You
said
you've
been
on
the
job
for
about
eight
weeks
now,
and
I
was
just
wondering
if
you
could
talk
about
joining
Co
and
with
the
change
of
CIO.
How
does
that
potentially
change,
Direction
and
aimco,
or
what
kind
of
influence
are
you
hoping
to
provide.
G
Question
well:
I've,
come
in
at
a
time
when
there's
already
been
a
well-articulated
corporate
strategy
for
the
next
five
years
and
a
well-articulated
overarching
investment
strategy
for
the
next
five
years
and
Ahmed
referenced
the
components
of
that
that
relate
to
Global
expansion
of
the
team
and
the
investment
strategies,
various
aspects
of
talent
and
so
on.
So
the
I
I
did
have
a
little
bit
of
say
in
that
strategy
as
it
was
being
developed.
It
was
approved
at
the
board
in
December
and
I
was
already
in
deep
discussions.
So
we
had
some
conversations
there.
G
We're
optimizing,
as
we
say,
on
the
equity
side
and
making
some
changes
to
to
be
even
more
focused
on
where
we
want
to
be
active,
where
we
want
to
be
passive
and
in
fixed
income,
we're
being
more
deliberate
about
where
active
and
passive
management
makes
sense.
That
includes
separating
out
credit
and
government
or
interest
rate
exposure
a
little
bit
more
clearly.
So
all
of
those
areas
are
well
underway
and
they're.
All
the
areas
that
I
will
be
focused
on
I
have
a
very
broad
background,
very,
very
broad
experience.
G
I
kind
of
grew
up
through
the
fixed
income,
part
of
the
business
and
then
increasingly
derivatives
and
then
increasingly
all
the
alternative
asset
areas
and
so
I've
kind
of
touched.
All
of
these
areas
and
I'll
be
focused
across
the
board,
but
particularly
focused
on
on
areas
of
activity
that
relate
to
tying
it
all
together.
As
a
total
fund
strategy,.
L
L
This
is
maybe
not
quite
a
follow-up
follow-up,
but
risk
management
has
been
something
that
we've
talked
about
quite
a
bit
at
this
committee
across
the
years
and
certainly
in
the
quarter
three
report
there's
a
great
deal
of
information
about
the
the
various
risks
that
are
currently
being
managed.
I
suppose
my
my
question
is
just
from
your
perspective,
which
risks
do
you
think
need
to
be
top
of
Mind,
as
we
continue
in
through
this
2023
volatility
and
turmoil
that
we've
seen
so
far.
G
So
we
look
at
overall
total
fund
risk,
obviously
just
absolute
return.
How
much
is
that
going
to
vary
over
time
and
in
future
we
look
at
tracking
her
or
active
risk
relative
to
what
the
policy
Benchmark
is
for
the
fund
and
make
a
determined
effort
to
Target
where
that
level
is.
We
look,
of
course,
at
our
exposures
to
countries
and
sectors
to
ensure
that
we
are.
You
know
targeted
about
that.
G
So
liquidity
management,
as
I
mentioned
in
my
opening
remarks,
is,
is
really
top
of
mind
and
I've
been
very
impressed
as
a
newbie
in
this
particular
organization,
with
how
liquidity
is
being
defined
because
there's
many
ways
to
Define
what
really
constitutes
liquid
assets,
things
that
we
can
sell
very
quickly
or
easily
things
that
we
can
use
to
pledge
as
collateral
and
borrow
money
against,
there's
many
ways
of
defining
what
constitutes
liquidity,
in
addition
to
the
obvious
cash
in
the
bank.
So
to
speak,
and
it's
a
very
sophisticated
approach
to
the
definition.
E
Thank
you,
Mr,
chair
and
I
also
want
to
express
my
profound
sadness
to
the
family
for
the
families
that
are
dealing
with
the
slang
of
the
two
officers
in
our
society.
It's
unacceptable
and
it's
such
a
sad
day,
but
I
want
to
first
of
all,
welcome
Marlene
for
the
new
office
that
you're
you're
holding
I
want
to
actually
ask
a
follow-up
question
to
miss
Gray's
question
or
first
question
that
she
asked
you
had
said
I'm
just
looking
for
Clarity
on
this,
you
talked
about
on
a
Note
7.
E
F
E
I'm,
just
wondering
is
that
something
that
would
be
we
would
be
able
to
have
as
a
as
a
standing,
comparable
metric
that
we
could.
We
could
have
it
at
our
meetings
so
that
we
can
I
mean
when
you,
when
you
present
it
after
the
fact.
It's
it's
good.
We
get
that,
but
it
would
be
I
think
it
would
be
helpful
in
a
public
forum
to
be
able
to
get
that
because
I
know
you
guys
do
that
I
mean
your.
F
It's
the
if
I
may,
just
the
only
caution
with
that.
So
we
we
look
at
the
data.
We
certainly
do
the
comparisons
part
of
the
part
of
the
the
art.
If
you
will,
and
that
is
across
the
plans,
the
port,
the
asset
allocation,
you
know
the
mix
is,
is
quite
different
and
benchmarks
are
different
Etc.
So
at
at
what
level
it
is
helpful
to
compare
it
at
the
headline
level.
As
you
get
into
the
details,
it
is,
you
know,
similar
to
Mr
Thompson's
earlier
response.
G
E
I
know
these
last
few
years
that
I've
been
on
this
board
and
taking
a
look
at
or
this
committee
story,
taking
a
look
at
what
you've
done.
It's
I
take
my
hat
off
to
the
work
that
you
guys
have
done.
It's
it's
monumental,
I'll
I'll,
just
leave
it
with
that.
I
do
have
some
other
questions,
but
maybe
I
can
turn
it
over
someone
else.
It's
a
supplemental.
J
I
will
thank
you,
chair
and
I
also
want
to
express
condolences
to
the
family
of
Travis,
Jordan
and
Brett
Ryan,
colleagues
and
friends
and
family
on
the
occasion
of
the
funeral
service
that
will
take
place
later
today.
I
just
wanted
to
ask
the
about
inflation
and
interest
rates.
I
mean
we're
all
feeling
the
effects
of
inflationary
pressures
I'm
just
curious
to
know
how
the
Heritage
fund
and
aimco
has
positioned
themselves
to
perhaps
take
advantage
of
these
higher
interest
rates
and
what
part
of
the
fund
is
most
able
to
take
advantage
of.
G
G
Infrastructure
and
and
renewable
resources,
in
addition,
there's
a
an
allocation
to
the
private
debt
and
Loan
book
and
that
private
debt
and
Loan
book
is
one
that
is,
is
geared
off
of
floating
interest
rates.
So
as
interest
rates,
move
up,
the
rate
of
return
directly
goes
up
to
earn
that
higher
level
of
return,
plus
a
credit
spread.
That
is
compensation
for
the
exposure
to
underlying
corporate
risk.
That's
that's
undertaken.
That
area
is
one
that
is
important
for
in
our
Geographic
expansion.
G
It's
been
primarily
focused
in
in
Europe
in
the
past
and
we're
in
the
process
of
adding
additional
exposure
to
that,
primarily
in
larger,
larger
capitalized
companies
in
the
United
States.
That
areas
is
a
an
area
where
it's
resilient
to
the
economic
Outlook.
So,
although
we
think
that
there's
risk
of
inflation
staying
elevated
and
economic
growth
being
lackluster
at
best,
this
area
is
one
where
we
really
look
carefully
at
what
kind
of
companies
we
invest
in
and
their
credit
quality
is
very
high.
So
it's
quite
a
resilient
part
of
the
portfolio.
J
Okay,
okay,
good
and
Sam,
my
follow-up
to
that
is
is
perhaps
from
a
position
of
ignorance,
but
I
think
also
something
that
people
are
often
curious
about,
and
always
you
know
keeping
to
to
the
idea
of
ethical
and
responsible
Investments
that
do
you
know
making
choices
to
take
full
advantage
of
inflationary
pressures
in
an
economy
I'm
just
hoping
that
there's
an
analysis
and
Care
taken
to
not
make
an
investment
or
Investments
of
that
type.
That
would
only
exacerbate
the
the
problem.
J
G
We
have
a
lot
of
Thunder
management,
but
we're
are
not
that
big
to
influence
the
overall
economy
is,
is
the
first
thing:
I
will
say
you.
You
did
also
mention
sustainable
investment
and-
and
so
perhaps
you're
alluding
there
to
the
idea
that
that
we
may
be
investing
in
areas
where
there's
there's
decisions
to
be
made.
G
That
may
not
be
just
for
investment
purposes
and
I'll
assure
you
that,
as
we
take
into
consideration
all
the
aspects
of
any
any
investment
decision,
it
is
really
about
maximizing
the
long-term
risk-adjusted
expected
return.
That
is
the
goal
and
in
an
environment
that
is
more
inflationary
than
we've
seen
in
the
past,
we're
also
particularly
focused
on
income
generating
assets.
E
Thank
you
and
I
just
want
to
first.
First
of
all,
say
thank
you
for
focusing
on
the
return
on
investment,
as
this
is
our
savings
fund
for
future
generations
to
be
able
to
buy
the
hospitals
and
the
schools
and
the
roads
that
we
need.
So
that's
extremely
important
in
in
my
mind,
but
I
do
want
to
talk
about
or
ask
you
some
questions
about
the
derivatives
on
page
15.
You
talk
about
that.
G
Certainly,
you
like
to
ask
the
tricky
questions
so
the
first
of
all
the
the
universe,
Bond
product
description,
notes
that
we
have
an
active
duration
risk
control
of
plus
or
minus
one
year.
So
what
that
basically
means
is
there's
a
certain
sensitivity
of
the
assets,
two
interest
rate
movements
and
we
have
a
range
within
which
we
operate.
Okay,
so
the
investment
team
manages
that
portfolio
within
this
risk
control
and
within
broader
active
risk
thresholds.
G
So
lots
of
things
are
taken
into
consideration,
in
other
words,
and
the
the
main
use
of
derivatives
is
to
is
to
manage
to
make
sure
we're
within
that
range.
So,
primarily,
it's
used
to
be
able
to
react
to
Market
movements
and
adjust
kind
of
at
the
edges.
These
are
vanilla,
so
quite
simple
interest
rate
derivatives
and
they
swap
fixed
rates
for
floating
rates,
and
it's
an
agreement,
that's
quite
straightforward
and
and
used
very,
very
widely
in
the
marketplace.
G
These
combine
with
the
underlying
exposures
to
adjust
the
duration
of
the
overall
portfolio
or
that
sensitivity
to
interest
rates
to
where
we
want
it
and
interest
rate
swap
that
shortens
duration
exchanges,
fixed
rates
for
floating
rates.
That
kind
of
an
interest
rate
swap
gains
in
a
rising
interest
rate
environment
and
and
serves
to
offset
some
losses
in
the
portfolio.
G
Then
the
the
assets
held
underneath
will
decline
in
value,
so
the
underlying
exposure
is
is:
is
that
way,
so
that
consists
of
multiple
components?
There's
the
cash
fixed,
Income,
Holdings,
plus
the
derivatives
contracts.
So
that
combination
depends
on
how
much
we
have
in
place
of
derivatives
at
that
time.
So
the
derivatives
contracts
are
used
primarily
to
manage
the
exposure.
Against
The
Benchmark
across
the
whole
yield
curve,
or
in
other
words
at
various
maturities.
They
will
either
gain
or
lose
value
relative
to
interest
rates,
depending
on
how
much
is
in
place
at
any
given
time.
D
You
very
much
I'd
like
to
talk
about
the
ways
you
measure
risk
on
the
equality
on
the
equity
Assets
in
the
portfolio.
What
is
the
average
beta
of
the
equity
Assets
in
your
portfolio?
Do
you
have
any
Targets
on
an
acceptable
range
for
this
metric?
Are
there
any
other
metrics
that
you
use
to
determine
risk?
G
So
currently,
the
average
beta
of
the
assets,
public
equity,
Equity
close
to
one
so
in
other
words
the
broad
market
index
and
the
portfolio
will
behave
approximately
the
same
way
when
the
broad
market
index
moves
and
it's
within
a
tight
range.
We
tend
to
manage
it
quite
quite
close
to
that
and
and
the
reason
being,
that
it's
it's
to
ensure
that
there's
a
an
agreed
to
exposure
to
markets.
If
we
manage
that
wildly
differently,
that
would
be
a
big
active
decision.
G
G
0.98
has
been
where
we've
been
positioned,
the
limit
on
active
beta
or
that
difference
between
the
portfolio
and
a
beta
of
one
is
agreed
to
with
clients
on
the
public
Equity
tart
products
that
agreed
limit
is
10,
so
between
0.9
and
1.1
is
the
full
range.
If
we
wanted
to
use
it,
but
we
tend
to
stay
fairly
close
to
home
in
terms
of
our
exposure
to
the
equity
Market,
measured
by
Beta.
G
G
So
we
just
hedge
the
piece
that's
different
from
what
the
underlying
Benchmark
exposure
is
in
equities
for
currency,
and
it
depends
on
the
team's
views
of
of
relative
value
and
currency
and
then,
of
course,
the
currency,
exposures,
feed
our
country,
risk
analysis
and
I
mentioned
earlier.
In
response
to
the
previous
question
that
country
exposure
sector
exposure
are
risks
that
we
monitor
carefully
within
our
Equity
portfolio
as
well.
G
We
Monitor
and
and
manage
we
also
watch
and
and
manage
the
macroeconomic
exposure
to
variables
like
inflation
and
interest
rate
risk
within
the
equity
portfolio,
because
there
is
exposure
to
interest
rate
risk
there,
and
these
are
are
are
managed
with
respect
to
the
the
the
difference
to
the
overall
Benchmark
and
when
we
manage
the
risk
profile.
We
also
often
will
use
derivatives
within
the
public
Equity
portfolio
to
stay
within
ranges
that
we
think
are
appropriate.
B
Further
questions
for
any
committee
members,
seeing
none
I
want
to
thank
our
guests
for
joining
us
today.
Appreciate
your
effort
to
get
here
and
your
responses
and
your
contribution
and
you're
welcome
to
leave
now
or
remain,
as
you
choose,
we'll
give
you
a
few
moments
and
then
we'll
get
back
to
our
business.
B
A
B
K
B
Yeah,
so
the
the
standing
committee
must
make
a
report
to
the
legislature,
correct
yeah
yeah.
So
the
next
item
on
the
the
agenda
is
that
committees
report
to
the
legislature
as
discussed
at
the
last
meeting,
the
committee
is
reverting
to
report
to
his
reporting
period
from
the
calendar
year
to
the
fiscal
year.
We
talked
about
that
last
meeting
and,
of
course,
the
fiscal
year
is
from
April
1
to
March
31st,
in
accordance
with
section
64c
of
the
Alberta
Heritage
savings
trust
fund
Act.
B
A
draft
for
that
report
was
posted
on
the
committee's
internal
website.
For
you,
this
draft
included
information
on
all
of
the
committee's
activities
during
the
reporting
period.
Up
until
today's
meeting,
the
committee
clerk
will
distribute
a
new
draft
of
the
report
that
will
include
the
Motions
passed
at
today's
meeting
for
members
to
review.
Are
there
any
questions
or
comments
with
regard
to
the
report
as
it
was
made
available
to
you.
B
Seeing
none
there
is
a
process
followed
by
some
other
committees
to
approve
committee
reports
that
has
been
authorized
that
has
authorized
the
chair
to
approve
the
final
report
after
it
has
been
distributed
to
community
members
for
their
review.
I'll
open
the
roof
floor
for
discussion
or
a
possible
motion
on
that
regard.
So
basically,
because
we're
not
meeting
again
to
allow
me
to
approve
the
final
report,
including
today's
meeting
after
has
been
made
available
to
you
for
a
while
question.
Mr.
L
B
So,
thank
you.
Member
gray
has
moved
that
motion
for
us,
so
I'll
just
read
out
a
proposed
motion.
The
standing
committee
on
the
Alberta
Heritage
savings
trust
fund
authorizes
the
chair
to
approve
the
standing
committee
report
to
the
legislature
on
the
Alberta
Heritage
savings
trust
fund
annual
report
2223
after
it
has
been
circulated
to
committee
members
for
review.
So
any
questions
the
motion's
been
made,
seeing
none
in
the
room
all
in
favor
any
opposed
online,
all
in
favor
bye.
B
A
B
B
So
referring
now
just
to
the
meeting
the
minutes
of
today's
meeting,
as
this
may
be
the
final
meeting
of
the
committee
prior
to
dissolution
of
the
30th
legislature,
the
committee
should
consider
how
it
will
approve
the
minutes
of
today's
meeting,
similar
to
the
approval
of
the
annual
report.
The
committee
could
choose
to
authorize
the
chair
to
approve
the
minutes
of
this
meeting
after
they
have
been
circulated
or
distributed
to
committee
members
for
their
review.
So
I'll
open
the
floor
for
a
discussion
and
question
a
possible
motion
on
that
particular
piece.
B
No
questions
member
Hunter
has
made
the
motion.
I'll
suggest
some
wording
that
the
standing
committee
on
Alberta,
Heritage
saving
trust
fund
authorized
the
chair
to
approve
the
minutes
of
the
March
27
23
meeting
of
the
committee
after
they
have
been
circulated
to
committee
members
for
review.
Any
discussion
comments,
questions
on
that,
seeing
none
in
the
room
all
in
favor
any
opposed
online,
all
in
favor,
aye
and
any
post.