Costs Overview

The following AIMCo expense summary should be read in conjunction with the audited financial statements and accompanying notes for the year ended March 31, 2024. The financial statements have been prepared in accordance with Canadian Public Sector Accounting Standards (PSAS).

Certain financial measures in the table below are not based on PSAS. These measures do not have any standardized meaning and may not be comparable with similar measures used by other institutional investment managers, investors or pension plans. They should not be viewed as an alternative to measures of financial performance determined in accordance with PSAS.

Total Costs

For the year ended March 31, 2024 (fiscal 2024), total costs were $1,085 million compared to the budget of $1,047 million and $993 million for the year-ended March 31, 2023 (fiscal 2023). The overall increase was driven by strong investment performance generated by several third-party managers partially offset by lower third-party management fees, and costs incurred on AIMCo’s Business Transformation program. In addition to the Business Transformation program, the increase from the prior year was driven by higher headcount, growth in assets under management (AUM) and strong third-party manager performance.

Third-Party Costs Before Performance

Third-party costs before performance were $99 million lower than budget and approximated fiscal 2023 results. Included in these costs are third-party management fees whose costs are based on invested or committed AUM depending on the nature and maturity of the fund. Lower commitments than budgeted to some third-party fund managers and the internalization of externally managed AUM resulted in costs under budget. The increase in third-party management fees compared to the prior year is driven by growth in external AUM.

Third-party pursuit costs are non-recurring in nature and are driven by the amount of capital deployed, number of investment pursuits and complexity of each investment activity resulting in cost fluctuations in any given period.

AIMCo Costs Before Performance

AIMCo costs before performance were $256 million in fiscal 2024 compared to $240 million in budgeted costs and $222 million incurred in fiscal 2023. The increase from budget is primarily driven by AIMCo’s Business Transformation program which commenced in April 2023 and was not sufficiently advanced at the time of budget preparation. The increase over fiscal 2023 is primarily driven by AIMCo’s Business Transformation program and an increase in headcount to support the execution of AIMCo’s Corporate Strategy.

Performance Costs

Performance costs are difficult to budget as they largely depend on future investment performance. Third-party performance costs of $273 million in fiscal 2024 were driven by strong performance from third-party fund managers that delivered returns in excess of benchmarks. Higher AIMCo performance costs than budget was due to strong corporate objective and team results realized for calendar 2023 and strong investment performance over the four-year period ended December 31, 2023. Higher year-over-year headcount drove the increase in AIMCo performance costs from fiscal 2023.