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(March 22, 2007) A new survey by MFC Global Investment Management, a subsidiary of Manulife, suggests that a significant percentage of Canadian defined benefit pension plan sponsors expect to make substantial shifts, particularly to foreign equity allocations, within their portfolios over the next two years.

MFC said that on an asset-weighted basis, 53% of defined benefit plans are expected to change their Canadian equity allocations, with a variety of new approaches to be implemented.

The survey seeks to assess the appetite for foreign investment among DB plan sponsors with assets in the $75 million to $10 billion range. Telephone interviews were conducted with senior representatives from 148 defined benefit plan sponsors across Canada.

The most noteworthy planned increases, the MFC said, were with the allocations of international equities. One-third of respondents intend to hike their non-U.S. international equity allocation over the next two years.

MFC adds that 18% of plans intend to hike their allocation to U.S. equities, while 13% intend to decrease it.

This trend extends to fixed-income securities, as well. MFC found that more than one in four expect to decrease their Canadian fixed-income holdings in favour of fixed-income investments in the U.S. and international markets.

“The elimination of the 30% foreign content limit has created an unprecedented investment opportunity for Canadian pension plans to generate enhanced returns and greater diversification potential by making larger allocations to global capital markets,” said Keith Walter, MFC Global’s senior vice-president of sales and marketing. “It appears now that Canadian plan sponsors are moving toward taking greater advantage of those investment opportunities both in equity and fixed income.”

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AIC to outsource fund accounting services to Citi

(March 22, 2007) AIC Limited and Copernican Capital Corp. announced today that they have selected Citi to provide fund accounting services that include custody and securities lending for their investment funds. AIC said delegating services to Citi allows the companies to concentrate on their “core competencies.”

As part of the agreement, approximately 40 AIC professionals will become employees of Citigroup Fund Services Canada, a division of Citi’s Global Transaction Services business. In addition, Citi will lease space in AIC’s office complex in Burlington to accommodate growth for its fund services in Canada.

“By outsourcing the fund accounting function to Citi, we can now concentrate on what we do best: delivering tax-efficient, above-average returns over the long run to investors who choose our funds,” said Jonathan Wellum, CEO of AIC Limited and chairman of Copernican. “At the same time, this agreement will reduce costs for investors and provide our fund accounting staff with a remarkable career opportunity to join a global leader in fund services.”

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Connor, Clark & Lunn complete offering

(March 22, 2007) Connor, Clark & Lunn Capital Markets announced Thursday that Connor, Clark & Lunn Global Financials Fund II has completed its initial public offering of 10,500,000 common units and over 300,000 F-class units at a price of $10.00 per share for aggregate gross proceeds of over $108 million.

Now that it has raised the capital, CC&L said that New Star Asset Management Limited, the fund’s investment manager, will invest the net proceeds of the initial public offering, together with any borrowings under the fund’s loan facility, in an actively managed portfolio consisting of securities of global financial services businesses to meet the fund’s objectives.

Those objectives include providing holders of the units with a stable stream of monthly cash distributions, initially targeted to be $0.05 per unit, and attempting to simultaneously preserve and enhance the net asset value per unit of the fund.

Connor, Clark & Lunn Capital Markets will act as manager of the fund and is responsible for providing the provision of administrative management services that it requires.

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(03/22/07)