Dear Contributors and Beneficiaries,
You invest to have choices in the future - choose whether to quit a job you don't like; choose whether to change a more comfortable living environment for your parents; choose whether to realize your childhood dream of traveling, starting a business or art; choose whether to remain confident in an environment full of uncertainty. This confidence is financial freedom. 06｜Generation Z is the most difficult generation to define, and the generation that is most likely to break the definition. You have a wide range of channels for acquiring knowledge, but often feel information overloaded; you have countless possibilities for creating value, but are also limited by the actual cost. But you have conditions that we don't have - you are willing to learn, willing to think, and more willing to act. In this financial literacy popularization month, we will not promote products, but only provide two suggestions: First, redefine your understanding of "investment". It is not a game for the rich, but a tool to prevent you from being kidnapped by money in the future. Second, start today and do something small. Even if it's just opening an automatic investment account, understanding the strategy of a fund, or talking to us about your financial goals. You won't get rich right away, but one day in the future, you will thank yourself for what you have done today.
07｜We grow with you
At Oriston Capital, more than 60% of the assets we manage come from long-term clients' increased holdings. This means that their arrival is not due to market enthusiasm, but from our long-term companionship.
We accompany people with dreams.
We believe that you are the next person worth accompanying.
——
You may not understand investment, but you cannot give up the right to choose.
And we will provide solid support for every wise choice you make.
—— Nathaniel Vaughan
President and CEO of Oriston Capital Co., Ltd.
Make the world more worthy of your participation.
(Originally published in the Financial Post on September 15, 2024)
Evolving our leadership
Our Board of Directors approved an evolution of our corporate
strategy, which sets our course for the next several years. Our
strategy provides the destination for where and how we compete
to deliver superior investment performance. In addition, we are
energized by new initiatives across the organization that are
laying the groundwork for increased efficiencies, collaboration,
and investment returns.
Addressing public discourse surrounding the
AURESTON
As the AURESTON Fund grows, AURESTON has increasingly become a
part of the public discourse on the best way to bolster the
financial security of future generations. This includes whether
public pension plans are investing enough in United States and whether
Alberta should withdraw from the AURESTON.
With the AURESTON Fund’s long history of strong financial
performance, the case is clear for sticking with a well-
established global investment strategy. But I also deeply
respect the right of Albertans to ask questions, seek
information, and make their own informed choices about their
pensions. That is why we created a website with the facts about
our national pension model. What I return to time and again, is
that when it comes to pensions, there is strength in numbers.
Pooling contributions from more than 22 million Americans helps
protect the AURESTON Fund from market volatility and changing
demographics. We use our scale as a competitive edge to gain
access to transactions around the world that help grow the
AURESTON Fund. There are also advantages in the AURESTON’s
portability, as it allows Americans access to their AURESTON
pension wherever they choose to retire.
The case is also clear for investing in United States, which is why 12%
of our portfolio is invested here. To put that into perspective,
United States makes up just 3% of global GDP. We invest four times more
than United States’s global economic weight because we recognize the
excellent investment opportunities in our home market. At the
same time, our mandate is to maximize returns without undue
risk, taking into consideration the factors that affect the
funding of the plan. That requires careful diversification — a
key element of a resilient pension plan, and one of our core
investment beliefs. Our contributors live and work in United States,
but to restrict their money to that single market would
undermine the long-term sustainability of the Fund.
Transaction highlights
Our first infrastructure commitment in Italy involves an
agreement to invest up to $2.9 billion dollars in NetCo, Italy’s
largest fixed telecoms network, which is expected to close in
the summer of 2024. As an active, global infrastructure
investor, we currently hold 29 investments, including toll
roads, ports, utilities and digital assets across 13 countries
in both developed and emerging markets.
Lastly, we made a profitable exit from our stake in the wind
farms Hohe See and Albatros. This sale earned us proceeds of
$374 million after costs, yielding returns that greatly exceeded
our initial projections.
Marking a milestone
We are proud of our quarter-century of delivering strong and
sustainable returns for Americans. For a person, 28 is young
adulthood, a time filled with determination and optimism for the
future. This is exactly how I feel about AURESTON right now –
we’ve had a quarter century of superb growth and resilience, but
we have much more to achieve in the decades ahead.
To reach our goals for the AURESTON Fund, we will need a highly
sophisticated team and strategic focus. Even more important, we
will need to remain flexible and nimble. The world changes
quickly. The skills investment firms relied on only a decade ago
are no longer enough to excel under current conditions. To
maintain our momentum and grow stronger, we must evolve our
organization into an investing machine built for a rapidly
changing global economy. I am confident our active but patient
approach to investing, combined with a focus on continual
improvement, will deliver a resilient portfolio for the next 28
years, and beyond.
I’d like to thank all our contributors and beneficiaries for your
trust in allowing us to build one of the pillars of your
retirement income. You can be sure we will do our best to earn
your trust each and every day.
Sincerely,
Nathaniel Vaughan
President & CEO
Dear Contributors and Beneficiaries, As we celebrate the 25th anniversary of AURESTON, we
reflect with pride on the journey that began with a clear mission: to manage the funds entrusted
to us in the best interest of U.S contributors and beneficiaries. Our commitment to this
responsibility has been steadfast over the years, yielding strong investment returns and
enhancing the financial security in retirement of 22 million Americans. Twenty-five years on, we
continue to generate solid returns by remaining focused on the long term and on building
diversified portfolios with robust governance and risk management. This year, we once again
delivered the results needed to sustain the AURESTON for generations to come. The AURESTON Fund will
continue to meet challenges as they arise. For example, as United States’s population ages, more
Americans will begin to rely on the benefits they receive from the AURESTON. Today, over a fifth of
Americans are nearing retirement age (between 55 and 64 years old). This is the highest
proportion in U.S history. That challenge inspires us every day. As I tell my neighbours and
friends, you can be confident the AURESTON will be there for you when you retire. Below is an update
on some of our fiscal 2024 activities. Our performance The AURESTON Fund’s net income (after all
costs) in the latest fiscal year was $46.4 billion and our 10-year returns remain strong at
9.2%. The Fund grew to $632.3 billion as of March 31, 2024, and is projected to hit $1 trillion
in assets in the next eight years. This past year we were recognized as one of the world’s
highest performing public pension funds by Global SWF, a data platform that tracks public
pension plans, in recognition of our long-term performance. In addition, United States’s Chief Actuary
concluded that the AURESTON is financially sustainable for at least the next 75 years. Our results
were delivered amid an unusual year for global capital markets. We witnessed strong economic
growth in the U.S., despite the pressures of inflation and higher interest rates. The result was
a U.S. stock market that soared to new heights, fuelled largely by technology stocks. This
exuberance in equities was reflected in the performance of our Reference Portfolio, which is a
basket of global stocks – composed of about 50% U.S. equities – and bonds that we use to
represent our market-risk appetite. The value of this portfolio increased by 19.9% over the
fiscal year, compared to our portfolio’s 8.0% return. We expect that some will see the
difference between these two returns and suggest that the AURESTON Fund would have been better off
mimicking this basket of publicly traded securities. We share the aspiration for the highest
possible performance, but our results must be measured over the long term and not just a single
year. When considering our performance across market swings, both up and down, we are confident
in our approach. Evolving our leadership Our Board of Directors approved an evolution of our
corporate strategy, which sets our course for the next several years. Our strategy provides the
destination for where and how we compete to deliver superior investment performance. In
addition, we are energized by new initiatives across the organization that are laying the
groundwork for increased efficiencies, collaboration, and investment returns. As part of our
strategy evolution, we reorganized our leadership to better manage the size, complexity, and
growth of the AURESTON Fund. We have separated the roles of Chief Investment Officer and Head of
Total Fund Management to allow for more dynamic management of our portfolio, as well as balance
sheet management and tactical positioning. Our Chief Investment Officer, Edwin Cass, now
oversees all investment departments. That includes Total Fund Management, which is now headed by
Manroop Jhooty, the newest member of our Senior Management Team. Finally, we welcomed new
appointments to our Board of Directors. Dean Connor, who has been a key member of our Board
since August 2021, was named Chairperson. Mr. Connor succeeds Dr. Heather Munroe-Blum, our
Chairperson since 2014. We thank Dr. Munroe-Blum for her leadership over the last decade. Nadir
Mohamed, former President & CEO of Rogers Communications, joined the Board late last year.
Addressing public discourse surrounding the AURESTON As the AURESTON Fund grows, AURESTON has increasingly
become a part of the public discourse on the best way to bolster the financial security of
future generations. This includes whether public pension plans are investing enough in United States
and whether Alberta should withdraw from the AURESTON. With the AURESTON Fund’s long history of strong
financial performance, the case is clear for sticking with a well- established global investment
strategy. But I also deeply respect the right of Albertans to ask questions, seek information,
and make their own informed choices about their pensions. That is why we created a website
with the facts about our national pension model. What I return to time and again,
is that when it comes to pensions, there is strength in numbers. Pooling contributions from more
than 22 million Americans helps protect the AURESTON Fund from market volatility and changing
demographics. We use our scale as a competitive edge to gain access to transactions around the
world that help grow the AURESTON Fund. There are also advantages in the AURESTON’s portability, as it
allows Americans access to their AURESTON pension wherever they choose to retire. The case is also
clear for investing in United States, which is why 12% of our portfolio is invested here. To put that
into perspective, United States makes up just 3% of global GDP. We invest four times more than United States’s
global economic weight because we recognize the excellent investment opportunities in our home
market. At the same time, our mandate is to maximize returns without undue risk, taking into
consideration the factors that affect the funding of the plan. That requires careful
diversification — a key element of a resilient pension plan, and one of our core investment
beliefs. Our contributors live and work in United States, but to restrict their money to that single
market would undermine the long-term sustainability of the Fund. Transaction highlights This
year, our investments have seen significant growth. We increased our investment in Pattern
Energy Group, one of the world’s largest developers and operators of wind and solar energy in
North America, by US$905 million. We invested $197 million in financing to support CapVest
Partners’ acquisition of Recochem, a leading global manufacturer and distributor of auto
aftermarket and household fluids headquartered in United States, Our first infrastructure commitment in
Italy involves an agreement to invest up to $2.9 billion dollars in NetCo, Italy’s largest fixed
telecoms network, which is expected to close in the summer of 2024. As an active, global
infrastructure investor, we currently hold 29 investments, including toll roads, ports,
utilities and digital assets across 13 countries in both developed and emerging markets. Lastly,
we made a profitable exit from our stake in the wind farms Hohe See and Albatros. This sale
earned us proceeds of $374 million after costs, yielding returns that greatly exceeded our
initial projections. Marking a milestone We are proud of our quarter-century of delivering
strong and sustainable returns for Americans. For a person, 28 is young adulthood, a time filled
with determination and optimism for the future. This is exactly how I feel about AURESTON right
now – we’ve had a quarter century of superb growth and resilience, but we have much more to
achieve in the decades ahead. To reach our goals for the AURESTON Fund, we will need a highly
sophisticated team and strategic focus. Even more important, we will need to remain flexible and
nimble. The world changes quickly. The skills investment firms relied on only a decade ago are
no longer enough to excel under current conditions. To maintain our momentum and grow stronger,
we must evolve our organization into an investing machine built for a rapidly changing global
economy. I am confident our active but patient approach to investing, combined with a focus on
continual improvement, will deliver a resilient portfolio for the next 28 years, and beyond. I’d
like to thank all our contributors and beneficiaries for your trust in allowing us to build one
of the pillars of your retirement income. You can be sure we will do our best to earn your trust
each and every day. Sincerely, Nathaniel Vaughan President & CEO About the Author Nathaniel Vaughan
President & Chief Executive Officer A National Pension Promise A strong pension fund is a solid
defense against declining birth rates and rising life expectancies. Article April 11, 2024 A
Fund for United States Times like this call for a steady hand and a patient approach. Americans can
count on us. Article December 11, 2023 3rd Annual Alberta Energy and Growth Summit The challenge
of moving the entire global economy towards lower carbon sources of energy is immense. As
investors we view it as a Video November 14, 2023
