Equicapita Update – Canadian Pension Plan Solvency Ratio Declines
A recent Benefits Canada article highlighted the return of a disturbing trend in the Canadian pension plan market – declining solvency ratios. According to the article “Lower long-term interest rates drove down the solvency of Canadian DB plans from July to September. It was the first decline in two years. According to the latest pension plan solvency ratio survey by Aon Hewitt, the market value of plan assets over plan liabilities stood at 91.1% at Sept. 26..."
Stephen Johnston, a Director of Equicapita, stated “The current interest rate conditions create very challenging conditions for pension plans to match long term liabilities with long term assets. Risk management and the ability to produce stable cash-flow are pushed to the forefront as investment filters in such a market. Plans cannot afford to suffer unexpected losses given their precarious and growing liability positions.”
Director Mike Cook continued “Part of the appeal of Equicapita to institutional investors is that we are a long-term, custodial investor. We seek to acquire stable, cash-generative businesses with solid operating track records and once we have found an attractive businesses we typically want to hold it indefinitely.”
Equicapita is a private equity buyout fund based in Calgary, Alberta. The fund is focused on acquiring private, western Canadian businesses with enterprise values ranging from $5 million to $20 million. The fund is an RRSP eligible investment vehicle that streams the cash flow from private operating companies to its investors on a priority basis.
This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," "expect," "may," "should" "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by Equicapita, if any, reflect Equicapita's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of businesses, including fluctuations in interest rates; general economic conditions; supply and demand for businesses; competition for available businesses; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. Equicapita undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.
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