Alberta fund manager fills gap left by gov't crises

Pav Jordan, REUTERS

, Last Updated: 10:59 AM ET

Leo De Bever, head of the Albera Investment Management Corp, likes the kind of assets that most investors wouldn’t touch, like a broken forestry program in Australia, owned by an army of investors and facing legal problems that would take a decade to unwind.

“So we walked into the receiver and said, ‘Look, we have the cash and we have the patience to do this, and nobody else can’,” De Bever told Reuters in an interview about AimCo, which manages the pension assets of workers in Canada’s energy heartland of Alberta.

De Bever said that under the $415 million deal for Great Southern Plantations, the fund snapped up all 640 parcels of forestry land - 2,500 square kilometres.

“And we bought it very cheaply because these assets went at a discount given that no one had the patience to work this out.”

That type of deal-making - a joint venture with the Australia New Zealand Forest Fund in January 2011 - may soon be typical as Canadian pension funds bail out government projects around the world.

AimCo, with C$70 billion in assets under management, is one of a clutch of Canadian pension funds with the patience to take advantage of problem investments that take equal doses of creativity and expertise to resolve.

“On the infrastructure side, a lot of governments are running out of cash,” said De Bever, who came to AimCo in 2008 after serving in roles as varied as chief forecaster for the Bank of Canada, chief economist for Crown Life Insurance and executive vice-president at Manulife Financial.

“They are running big deficits and they are looking for private sources of finance to build power plants and sewers and water and roads and all that sort of thing.”

De Bever, who as a high school student in Holland planned to become a politician, sees business opportunity in California, where AimCo was at one point close to investing in water treatment plants.

He’s also keeping an eye on the electrical transmission network in the United States, which needs several hundred billion dollars to revamp infrastructure that dates back to the 1970s.

In emerging markets, said De Bever, deals are bubbling to the surface as struggling European banks back away from non-core projects.

He is now less keen, though, on Latin America, where AimCo struck a couple of big deals in the last couple of years, in power lines and toll highways.

“We are coming to the conclusion that the tide may be shifting,” De Bever said. “There was a period of about five years when Canadian pension funds were tripping over each other in Latin America but my sense is that some of that may, in the next two or four years, be shifting back to North America.”

(Reporting By Pav Jordan)