Equicapita Update – Canadian Pension Plan Solvency Ratio Declines

Calgary, Canada, November 04, 2014 --(PR.com)-- 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. That represents a decline of 4.9 percentage points since the end of June.”

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.

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