BCI Gains 10% in Fiscal 2025
British Columbia Investment Management Corp. earned an average return of 10 per cent for clients last fiscal year, missing its internal benchmark but showing its ability to make deals in a volatile market.
The 10-per-cent return combines the performance of Victoria-based BCI’s six largest pension-plan clients for the year that ended March 31.
In a “heck of a year” marked by upheaval in investing markets, “we had a good year,” Ramy Rayes, the fund’s executive vice-president of investment strategy and risk, said in an interview. BCI added $21.9-billion of investment income after fees.
The internal benchmark BCI uses to measure its performance gained 12.3 per cent. BCI is one of several large Canadian pension funds with broad portfolios of public and private assets that have struggled to keep pace with benchmarks focused on public equities, most notably large U.S. technology companies that have surged in value.
Over 10 years, BCI has earned an average annual return of 7.4 per cent, ahead of its benchmark of 7.1 per cent.
BCI now manages $295-billion of gross assets, compared with $250-billion a year earlier. After subtracting real estate debt and other liabilities, BCI’s net assets are $251.6-billion.
Many large investors have lamented the uncertainty plaguing markets, which has dampened deal-making and made it a hard year to put money to work.
By contrast, “we had quite a year in terms of deployment” of capital, Mr. Rayes said.
“People think the market is kind of jammed and low deal activity. We’re not seeing that,” he added.
BCI’s private-equity group, which earned a 13.4-per-cent return, made $2.2-billion of new investments and sold two of the largest assets in its portfolio: a stake in internet provider Ziply Fiber, which sold for $5-billion to Bell Canada parent BCE Inc.(BCE-T), and a 60-per-cent stake in European alternative asset manager Hayfin Capital Management.
The fund’s infrastructure and renewable-resources portfolio, which gained 8.3 per cent last year, made $5.1-billion of new investments, including taking BBGI Global Infrastructure SA private for $1.9-billion.
“We stayed active,” Mr. Rayes said. “We’re seeing so many opportunities right now, good opportunities, I would say at good value.”
The lone portfolio that lost money for BCI was its equity investments in real estate, which fell 1.8 per cent as assets were marked down in value. The real estate debt arm earned a 6.1-per-cent return.
Fewer of BCI’s new investments have been in the United States, where 39 per cent of the pension fund’s assets are invested, as uncertainty over tariffs and potential tax changes shifts the balance of risk and return.
“In some cases it’s been challenging to deploy in the U.S. and we’ve been prudent, and we’ve put things on pause at BCI,” Mr. Rayes said.
That is partly because of potential U.S. tax changes that would significantly raise tax bills for foreign investors. Senators have pushed to delay the implementation of the tax until 2027, but Canadian pension funds eyeing new, long-term investments have started to factor the tax into their decisions anyway.
“We price it in,” Mr. Rayes said, echoing recent comments by Canada Pension Plan Investment Board CEO John Graham.
“It doesn’t mean that we’re stopping investing [in the U.S.] but we’re certainly intentionally creating new partnerships in Europe and Asia,” Mr. Rayes added. “We want to make sure that we have a good, diversified portfolio.”
Even though BCI missed its fiscal-year benchmark, Mr. Rayes said he trusts that the pension-fund manager’s allocations to private-equity investments and other private assets will match up over the longer term.
“I don’t believe public equity will do 30-per-cent returns over 10 years. I really don’t,” he said, referring to outsized stock market gains driven by shares in major U.S. tech companies.
“I feel comfortable with it, but it does create that noise on a shorter-term period.”
Layan Odeh of Bloomberg also reports B.C. pension giant taps uncertainty in market to ink 45 deals in six months:
British Columbia Investment Management Corp. (BCI) signed 45 deals during the past six months as the pension fund manager exploits the uncertainty in the market.
The public pension manager began its new fiscal year in April with ample liquidity after a series of asset sales, giving it dry powder to invest across a number of asset classes, according to a senior investment strategist.
“We have room to deploy,” Ramy Rayes, executive vice-president of investment strategy and risk, said. “While others might be stalling, we see good opportunities and good value, too.”
BCI announced this week the closing of a £1 billion take-private deal for Luxembourg-based BBGI Global Infrastructure SA — the first time it has done a privatization as the sole investor. The fund also bought Maple Leaf Self Storage, a chain based in western Canada.
Overall, the pension fund manager returned 10 per cent in the fiscal year, missing its benchmark of 12.3 per cent and bringing net assets to $251.6 billion, according to a statement Wednesday.
The fund’s infrastructure holdings notched an 8.3 per cent gain in the fiscal year ended March 31, while investments in private equity and private debt earned 13.4 per cent and 10.2 per cent, respectively.
The private equity unit made two sales in the secondary market, fetching $1.6 billion in proceeds. BCI also was an investor in Ziply Fiber, the United States broadband internet company that’s being acquired by BCE Inc. for $5 billion.
BCI cut its U.S. exposure to about 39 per cent last year from 43 per cent the previous year as it sold part of its equity portfolio, which is heavily tilted toward the country, Rayes said. The pension fund manager is also allocating capital to regions such as Europe and Asia amid U.S. President Donald Trump’s erratic trade policies.
Rayes said uncertainty about the world’s largest economy means investors will either bid lower for assets or require higher growth to compensate. “We might start underwriting a transaction in the beginning of the year — things change, the uncertainty increases and you get out,” he said. “Pens down on the transaction.”
While Trump’s proposed so-called revenge tax has been delayed and revised by the U.S. Senate, it adds another layer of complexity. Known as Section 899, the provision has non-U.S. investors worried that it could make investing in the country more expensive.
BCI has done its own scenario analysis on the so-called revenge tax. “For our total portfolio at BCI, we could have an impact of 15 basis points as it stands today,” Rayes said, but it’s unclear and the number would vary depending on the structure of the investment.
BCI, which invests the retirement savings of British Columbia’s public sector workers, increased its exposure to Canada by seven percentage points to 37.8 per cent during the year. That was driven by an increased allocation to government bonds, private debt and real estate. Rayes said BCI would be interested in investing in Canadian infrastructure, such as airports.
BCI decided to “start moving within the capital stack,” investing more in infrastructure debt, convertible preferred shares within private equity and asset-backed loans, he said.
“Right now being just in the equity sleeve or just purely in the debt sleeve may not get you the perfect risk-adjusted return,” Rayes said. Hybrid assets offer the chance to maximize returns and create downside protection, he said.
Earlier today BCI released its results stating it achieved 10% annual return in fiscal 2025:
Marks 25th anniversary by delivering $9.3 billion in added value since inception
VICTORIA, BC — June 25, 2025 — British Columbia Investment Management Corporation (BCI) today announced an annual combined pension plan return¹ of 10 per cent for the fiscal year ended March 31, 2025. The combined pension plan return represents the performance of BCI’s six largest pension clients by assets under management (AUM).
Gross AUM² grew to $295 billion with net AUM totalling $251.6 billion. Investment income contributed $21.9 billion net of all fees to AUM growth, demonstrating the strength of BCI’s diversified investment approach.
“Despite the severe market turbulence leading up to our March 31 year-end, we did an excellent job in fiscal 2025 rolling out a resilient, defensive-leaning investment strategy closely aligned with our clients’ long-term investment needs,” said Gordon J. Fyfe, BCI’s Chief Executive Officer and Chief Investment Officer.
BCI continues to deliver annualized long-term returns that exceed clients’ actuarial discount rates. Over the five-year period, BCI returned 8.9 per cent and 8.6 per cent over 15 years. Since inception, BCI has delivered $9.3 billion in cumulative value add, demonstrating the strength and resilience of its well-diversified investment strategy. BCI repeatedly delivers sustainable value for its clients, regardless of market volatility or economic uncertainty.
“BCI’s long-term performance has enabled our pension clients to remain in surplus positions, with funding ratios ranging from 103 to 133 per cent,” added Fyfe. “As we continue to face market uncertainty, we are actively modelling client portfolios against a range of risk scenarios. In all market conditions, great deals can still be found, and we continue to leverage our strong liquidity position to transact across asset classes globally.”
Strong Performance Across Asset Classes
All asset classes generated positive returns except for Real Estate Equity, which faced continued market headwinds despite modest interest rate cuts. Public Equities, Fixed Income, and Private Equity were the largest contributors to total performance during the fiscal year.
Within Public Equities, absolute return strategies generated strong results during a period when active equity managers faced headwinds. These strategies aim to provide consistent positive returns regardless of market conditions. Since inception in fiscal 2020, they have achieved a 16.1 per cent annualized return.
The Fixed Income portfolio delivered robust returns through active interest rate positioning and strong credit selection. The Corporate Bond Fund grew to $18.5 billion in net AUM, while the Principal Credit Fund expanded to $19.4 billion in net AUM. The Fund broadened its offerings by introducing asset-backed lending (ABL) through three new strategic partnerships, providing enhanced downside protection and attractive risk-adjusted returns. With shorter loan durations and increased flexibility, ABL strengthens portfolio resilience and offers stability and opportunity during periods of market volatility.
BCI Private Equity delivered strong results despite challenging market conditions. The team executed $2.2 billion in new investments and announced significant exits, Hayfin Capital and Ziply Fiber3, two of its five largest assets. It also generated $1.6 billion in proceeds from the completion of two secondary sales.
BCI Infrastructure & Renewable Resources experienced 18 per cent net AUM growth for the calendar year. In fiscal 2025, the group originated and executed $5.1 billion in new investments. The asset class delivered excellent total returns despite turbulent markets and geopolitical stress. Notable transactions included the take-private of BBGI Global Infrastructure S.A. and two key investments which support the energy transition economy, Renewi PLC, a recycling company, and Shepherds Flat wind project, one of the world’s largest windfarms.4
BCI’s Real Estate investments demonstrated resilience and strategic positioning in tough market conditions. The Real Estate Debt portfolio delivered a positive return due to strong asset selection and active management. Real Estate Equity produced the lone negative result, due to market-driven valuation adjustments coming from higher interest rates rather than realized losses. Strong portfolio fundamentals and positive income supported overall performance, with stable occupancy rates and rent growth experienced by industrial, alternative, and residential sectors.
Committed to Responsible Investing
During the fiscal year, BCI continued making strong progress in responsible investing. Highlights for the year included surpassing $6 billion in cumulative sustainable bond participation, exceeding BCI’s 2025 expectation of $5 billion, hosting BCI Private Equity’s inaugural ESG Value Creation Conference, and achieving a 100 per cent score from the Global Sovereign Wealth Fund’s Governance, Sustainability and Resilience Scoreboard.
BCI’s Ecosystem5
The effects of BCI’s operations extend far beyond investment returns. In 2024, the organization’s ecosystem contributed $24.4 billion to British Columbia’s provincial GDP, representing 5.9 per cent of the province’s economy. This impacted 1 in 10 British Columbia households and supported the creation of 225,800 jobs provincially and an additional 8,000 jobs nationally, generating $12.2 billion in wages for workers across all age groups.
For more corporate highlights, including BCI’s focus on sustainable growth, innovation, and operating on a global scale, read the 2024-2025 Corporate Annual Report released today.
Please refer to our Annual Report for additional details, which may supplement or supersede the information provided herein.
All figures are in Canadian dollars unless otherwise stated.
¹ The combined pension plan clients reflect the investments of BCI’s six largest pension clients: BC Hydro Pension Plan, College Pension Plan, Municipal Pension Plan, Public Service Pension Plan, Teachers’ Pension Plan, and WorkSafeBC Pension Plan.
² Gross assets under management include all investment assets, before deducting Real Estate Debt and Equity recourse debt directly issued by QuadReal Property Group, BCI and QuadReal Property Group Real Estate Debt and Equity uncollateralized derivative liabilities, and BCI’s Funding Program liabilities.
3 Transaction has been announced but not yet closed; remains subject to satisfaction of closing conditions, including regulatory approvals.
4 Transactions were signed before BCI’s March 31 year-end but closed during the first quarter of the subsequent fiscal year.
5 These figures come from a 2024 Canadian Centre for Economic Analysis study and show the economic activity supported by BCI’s payments, its clients, operations, and investments during its fiscal year ending March 31, 2024. The study focused on BCI’s economic contributions and does not compare different retirement or insurance plan options.
Alright, BCI is the last of the Maple Eight pension funds to report its results.
The results were in line with what others reported with gains primarily coming from Global Public Equity (mainly US, 14.3%), Private Equity (13.4%), Private Debt (10.2%) and Infrastructure & Renewable Resources (8.3%).
I would have liked to discuss the results with CEO/CIO Gordon Fyfe but he's never around when results are released (goes on vacation) and BCI's Comms team didn't contact me to set up an interview with Ramy Rayes, Executive Vice President, Investment Strategy & Risk, with whom I've spoken within the past (very nice guy featured above).
Communications was never BCI's strong suit so I was glad Ramy spoke to a couple of reporters today to give some tidbits into their thinking and strategy.
Still, this blog is the best platform in the pension investment world and in my opinion, those who do not partake and support it show great disrespect to their members, not to me (I couldn't care less, I'll continue covering their activities).
Let me jump into it. Take the time to read BCI's annual report here (click on the PDF icon next to the question mark at the top to read the PDF file, much easier and faster to jump within and between sections).
The annual report is well written and easy to read.
Let me go over the main things starting with BCI's asset mix:
As you can see, Fixed Income (34%) and Public Equities (24%) make up 58% of the total assets.
Here, it's worth noting that even though BCI has shifted assets into private markets over the last ten years since Gordon Fyfe arrived as CEO (in June 2014), the bulk of the assets remain in public markets because BCI manages assets of mature plans relative to its Maple Eight peers and needs liquidity (which they manage carefully) to pay out pension benefits.
Next, let's look at geographic exposure:
Not surprisingly, the bulk of BCI's assets are in the US (39%) and Canada (38%), with Europe (13%), Emerging Markets (8%) and Asia Pacific (3%) making up the rest.
BCI's higher weighting in domestic assets relative to its large Canadian peers is due to legacy issues (they used to have all their real estate assets in Canada before diversifying outside of Canada through a deal with RBC Asset Management) and they have a lot of Canadian bonds (again, they manage assets of mature pension plans and need that liquidity to pay benefits).
Next, read Chair Peter Milburn's letter:
I note the following:
Over the years, BCI has built a resilient investment program designed not just to withstand volatility, but to adapt to it. While the current macroeconomic environment has been volatile and increasingly uncertain, BCIs long-term approach and experienced leadership provide a steady hand. Those guiding the organization today have led through past market disruptions and continue to be focused on long-term, sustainable growth and value creation.
As I reflect on fiscal 2025, the BCI Board continued to focus on enabling BCI’s success in the increasingly complex environment we faced. Regulatory expectations for pension funds are evolving, and strong governance remains central to our oversight role. This year the BCI Board undertook an external effectiveness review, reaffirming our commitment to strong governance and continuous improvement. We also continued to strengthen our environmental, social, and governance (ESG) frameworks to better align with global standards and growing client expectations, and refined our approach to risk and strategy. These activities prepare the organization to successfully navigate future challenges and opportunities as we have in the past.
People are at the heart of BCI’s success, and the BCI Board supported ongoing investment in talent development and the organization’s commitment to equity, diversity, and inclusion, ensuring it remains a place where top talent can excel as we deliver on our purpose.
I can't speak to BCI's commitment to equity, diversity and inclusion but judging from all their posts on LinkedIn, it seems they do take it seriously (a bit overkill on LinkedIn, everyone needs to give it a break).
Next, let's go over CEO/CIO Gordon Fyfe's letter:
I note the following:
Nearly all asset classes delivered strong results, in both absolute and relative terms. Our Private Debt and Infrastructure & Renewable Resources assets were noteworthy performers. Over the course of the fiscal year, these programs increased their focus on high-growth Asian markets with Private Debt seeking investment opportunities with attractive yields and diversification benefits, while Infrastructure & Renewable Resources made its first direct investment in Japan.
Private Equity and Real Estate Equity underperformed their respective benchmarks. Although Private Equity delivered a robust 13.4 per cent return, it missed its 30.1 per cent benchmark which was driven by strong public equity returns and the Magnificent Seven AI-related companies. BCI’s Real Estate portfolio, managed by QuadReal, also underperformed its 6.8 per cent absolute return benchmark by 8.5 per cent, though it remained impressive compared to Maple 8 peers in these difficult market conditions.
From a longer-term perspective, BCI continues exceeding actuarial discount rates, with client funding ratios ranging from 103 to 133 per cent. However, given the lingering uncertainty around global trade and the investment environment, we may face several tough years ahead. We are closely monitoring developments, actively modelling client portfolios against potential scenarios, and briefing clients on risk-reduction strategies designed to help mitigate geopolitical and trade uncertainty impacts.
All of BCI's clients are fully funded, some more than others, but as Gordon warns, given the lingering uncertainty, tougher years may lie ahead.
He notes Private Equity underperformed its benchmark last year by a wide margin because of the Mag-7 dynamics dominating the S&P 500 and Real Estate managed by QuadReal also underperformed its absolute return benchmark by 8.5% but was still impressive compared to Maple Eight peers (I'd say some peers performed better than others).
Anyways, I'm not going to get into private equity and real estate benchmark issues, I know too much on the subject and suffice it to say there's no perfect benchmark so best to judge absolute and relative performance over a longer time period (5,10, 20 years if data is available).
I did note this on BCI's Private Equity performance last fiscal year from their press release:
BCI Private Equity delivered strong results despite challenging market conditions. The team executed $2.2 billion in new investments and announced significant exits, Hayfin Capital and Ziply Fiber3, two of its five largest assets. It also generated $1.6 billion in proceeds from the completion of two secondary sales.
So timely distributions realizing nice gains and two secondary sales made up the bulk of the returns there.
In Infrastructure and Renewable Resources, I note this from the press release:
BCI Infrastructure & Renewable Resources experienced 18 per cent net AUM growth for the calendar year. In fiscal 2025, the group originated and executed $5.1 billion in new investments. The asset class delivered excellent total returns despite turbulent markets and geopolitical stress. Notable transactions included the take-private of BBGI Global Infrastructure S.A. and two key investments which support the energy transition economy, Renewi PLC, a recycling company, and Shepherds Flat wind project, one of the world’s largest windfarms.4
This group was extremely busy last fiscal year and Gordon noted this in his letter:
This year, we released a new three-year business plan, focused on three ambitions: Driving Sustainable Growth, Accelerating Innovation, and Operating on a Global Scale. In pursuit of the latter ambition, we continue to expand our footprint globally. In fiscal 2025, we established a new European Private Equity hub in London, which will strengthen access to deals and help attract talent, while equipping us to operate in closer proximity to our already sizeable holdings in the region. About $11.5 billion of BCI’s $33.6 billion Private Equity portfolio is currently invested in Europe, while more than 50 per cent of our Infrastructure and Renewable Resources assets are outside North America.
In an era of great volatility and restructuring of international trade relations, diversification and adaptability become crucial for long-term portfolio resilience. Beyond our growing New York and London offices, we now maintain a small Mumbai team overseeing investments in India, the Philippines and Middle East, while scouting out ASEAN opportunities.
Let me wrap it up there, take the time to read BCI's annual report here.
I would have appreciated a long and detailed discussion with Ramy but it didn't happen (BCI's members lose out, not me).
Below, BCI's Head of Global Private Equity, Jim Pittman, discussed trends he sees in the industry at the Milken Conference a month ago:
Pittman highlighted that while 2021 saw a record US$1.2 trillion in deals sold, 2024’s figure plummeted to just US$250 billion, pointing to a confluence of factors including inflation, geopolitical risk, and supply chain disruptions. All panelists agreed: “Nothing kills M&A activity more than uncertainty.”
After several years marked by sluggish distributions and a backlog of aging portfolio companies, 2025 is showing signs of renewed activity. Panelists expressed cautious optimism that, as volatility decreases, the IPO market could see significant improvement. Strategic corporate buyers are also showing early signs of renewed M&A interest. This optimism is supported by industry data, with global exit values rising 34% year-over-year and exit counts up 22%, according to a recent Bain report, signaling that pent-up demand is beginning to translate into real deal flow.
Pittman’s commentary reflected a broader industry push to unlock liquidity for limited partners (LPs) after several lean years. He pointed to the growing relevance of the secondary market and continuation funds as alternative paths for exits. GPs are also looking at other ways of unlocking liquidity through “componentized sales” – selling off portions of their holdings to unlock liquidity. One GP emphasized the importance of considering multiple exit strategies: “Less than 20 per cent of [their] realisations now come from IPOs. Over 50 per cent come from some type of strategic sale, such as large corporate buyers.”
The panel also highlighted a healthy pipeline of investments at attractive valuations. “I’m super excited about the buyer’s market. We’re buying things 50% off or more-pricing we haven’t seen since the global financial crisis,” remarked one panelist.
Pittman reinforced that BCI is actively seeking opportunities in sectors with strong fundamentals and operational value creation potential. He noted that BCI remains active, having sold three companies and acquired three others in the past eight months. In the past year, BCI Private Equity unlocked C$2.8 billion of capital through asset sales, successfully generating liquidity and securing strong realized returns as a result of the program’s focus on active portfolio management. The sale of BCI’s majority stake in Hayfin Capital and the announced sale of our investment in Ziply Fiber are two recent examples, in addition to secondary fund sales.
Watch the panel discussion below which is also available here along with more key takeaways.
Great discussion, all the panellists are smart and experienced and offer unique insights. KKR's Alisa Amarosa Wood is particularly impressive and she really nails it on a few points, including dispersion of returns in the private equity industry and getting the right alignment to drive value creation at their portfolio companies.
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