Canada pension funds take closer look at energy, but still wary

Wed Mar 2, 2016 3:59pm EST
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* Pension funds look at stepping in as rival investors flee

* Calgary bars filled with bankers eyeing up deals

* AIMCo sees "great values" in energy sector

* Caisse says remains wary of "exogenous risk"

By Matt Scuffham

CALGARY, Alberta, March 2 (Reuters) - Executives at some of Canada's biggest pension funds say they are looking more closely at the oil and gas sector, attracted by low valuations, but will take a scrupulous approach to deals given the uncertain oil price outlook.

The funds say they are prepared to overlook depressed oil prices in the short term if it means they can directly invest in assets at knock-down prices, especially as rival investors retreat and lenders get tough with struggling firms.

Pension funds are under less pressure than other investors, such as private equity, to hit short-term targets and may be able to cherry-pick assets.

"We see some great values because, unfortunately, there is capital that is leaving Alberta as the oil price sinks. So we see excellent opportunities for long-term investors," said Kevin Uebelein, chief executive of Alberta Investment Management Corporation, which manages C$90 billion ($67 billion).   Continued...