Canadian pension assets broke through half a trillion dollars in 2002

(November 14, 2002) Canadian pension assets under external management exceeded the $500-billion level for the first time ever in 2002. As of June 30, the 163 firms surveyed for the “The Top 40 Money Managers of 2002” by Benefits Canada magazine managed $516.4 billion in aggregate — a 3.8% increase over the 2001 total.

Equity markets were struggling as of June 30, following the twin shocks of the terrorist attacks of September 11 and the corporate governance scandals in the United States. On top of this, the U.S. economy had slipped into recession, and growth in much of the global economy had slowed. These market conditions raised fears about the solvency of pension funds in Canada.

The Benefits Canada survey found that 19 of Canada’s top 40 pension managers reported a decrease in Canadian pension assets under management this year. The large global money managers still hold significant advantages in the pension industry, and many of the big firms got bigger.

“Growth among the 10 largest pension asset managers increased 5.7%, almost doubling the Top 40’s year-over-year growth rate of 3%,” said the report, published in this month’s issue of Benefits Canada.

The top 10 firms managed a total of $267.2 billion — just over half the total pension assets under external management in the industry. Four of the 10 biggest managers reported a decrease in asset growth.

“Fixed income was the success story of the year, as far as asset classes went,” said the report. Equities have struggled for two years now.

Here are the top 10 money managers with their total pensions assets for 2002 and 2001 (as of June 30, 2002):

• CDP Capital ($91.7 billion/ $89.2 billion in 2001)

• TD Asset Management Inc. ($33.6 billion/ $28.6 billion in 2001)

• Barclay’s Global Investors Canada ($27.9 billion/ $23.4 billion in 2001)

• Philips, Hager & North Investment Management ($19.1 billion/ $21.9 billion)

• Jarislowsky, Fraser Ltd. ($18.6 billion/ $14.5 billion in 2001)

• UBS Global Asset Management (Canada) ($18.2 billion/ $18.9 billion in 2001)

• State Street Global Advisors ($17.1 billion/ $15.3 billion in 2001)

• McLean Budden Ltd. ($14.6 billion/ $13.2 billion in 2001)

• TAL Global Asset Management ($13.6 billion/ $15.3 billion in 2001)

• Bimcor ($12.5 billion/ $13.2 billion in 2001)

Bimcor is the only newcomer to the top 10, bumping Perigee Investment Counsel. The top four firms all held their positions from 2001.

The Top 40 increased their Canadian pension assets under management by 3% to $438.6 billion as of June 30, 2002.

Canada’s biggest pension funds lost money in 2001 for the first time in more than two decades. The top 100 pension funds reported assets of $490 billion for 2001, down 4%, or nearly $21 billion from the previous year.

Benefits Canada and Advisor.ca are properties of Rogers Media.

Filed by Jim MacDonald, Advisor.ca, jmacdonald@advisor.ca.

(11/14/02)