Investors are considering income, the return from cash flow, re-rating duration exposures, inflation protection, diversification, liquidity and the role of alpha in this environment, he added. “We need growth from both public and private asset classes as we’d normally expect from the building blocks of a portfolio.”
Read: Making cross-asset trading a reality at the AIMCo
The AIMCo manages the assets of 16 Alberta-based pension funds, overseeing approximately $195 billion in assets under management. For alternatives assets, it has exposure to infrastructure, real estate, renewable resources and private equity, he said.
“We have a higher base rate, higher dispersion, higher volatility, in general, across asset classes and this is a good environment for isolating excess return in a number of these strategies.”
In its role as investment manager, the AIMCo’s absolute return strategies are focused on generating carry and convexity, noted Lord, not compounding downside in an adverse credit or equity beta environment.
Read: AIMCo surpasses $200 billion in assets, balanced fund returns 7.2% in first half of 2026
After a decade of falling rates, asset owners paid through price and duration, he added, and are now seeing meaningful income contribution from private credit, real assets and public fixed income compared to inflation. Indeed, allocations to private debt and loans are allowing investors to capture floating rate exposure instead of relying on duration, while real assets offer income, inflation leakage and structural growth.
“Inflation protection is likely one of the more relevant roles that our asset class structure is seeking today. Duration did the job of inflation linkage previously or carried more of the weight. . . . Today, real assets with contractual pricing power are performing more of that role.”
At the AIMCo, the team ensures liquidity is available by deliberately holding it as an option, which is a key tenet of the organization’s overall investment strategy, said Lord. “We need to have liquidity when others don’t have liquidity and that allows for the most flexibility in designing and constructing a portfolio and generating excess returns on their behalf.”
Read: AIMCo appointing Justin Lord as CIO
The necessity for liquidity helps when points of stress show up, he added, and spreads or risk premiums widen across asset classes in public and private sectors. “We have the ability to deploy, to really buy what others are selling, to seek their own liquidity and then realize, reset and continue.”
In a world where global equity managers have a hard time keeping up with benchmarks, private equity has become a destination for investors looking for alpha, he said. “There are liquidity-related situations in private equity, . . . where being a buyer or a seller, depending on price, are likely some of the most attractive forms of excess return-generating capacity in that space over the next couple of years.”
Private asset classes are also offering innovative investment approaches, noted Lord, with hybrid solutions that have equity-like rates of return, a degree of complexity and illiquidity alongside what he described as high-yield, bond-like risk or downside.
Read more coverage of the 2026 Alternative Investment Conference.