Joining Trend, SWFs Push into Shareholder Activism to Boost Returns

January 16, 2015 by Nate Hardcastle and Rachel Monroe

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Sovereign wealth funds are wading into the contentious arena of activist investing, campaigning for better corporate governance and launching hostile takeovers while pouring money into the coffers of hedge funds that ply the controversial strategy. Leo de Bever, CEO of Alberta Investment Management Corp. (AIMCo), smelled opportunity in April 2009. Precision Drilling Corp., a Calgary-based oil field services company, had taken on an unsecured bridge loan the previous year to finance its purchase of a rival driller the previous. With credit markets frozen, Precision couldn't replace the loan, which carried a 17 percent interest rate, with cheaper debt. The company turned to de Bever, who oversees more than C$75 billion ($63 billion) for 28 pensions and endowments, including the Alberta Heritage Savings Trust Fund, a sovereign wealth vehicle. AIMCo invested C$380 million in the driller, including notes, equity and warrants. The Alberta fund took a seat on Precision's…

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