Rossitsa Stoyanova Q&A with Rossitsa Stoyanova, Chief Investment Officer, IMCO

In 2024, IMCO completed its fifth year of investment performance – a key milestone in institutional asset management. We asked Rossitsa to reflect on the journey.


In your view, what do you think the biggest highlights over the past five years are?

It's been an incredible journey. Over the past five years, we've patiently and thoughtfully moved our client assets into IMCO strategies. We introduced the IMCO World View, a thematic analysis of global markets used by our portfolio managers in their investment decisions. We moved on multiple fronts to meet our goal of investment excellence under our five-year strategy. And this year, we became strategic asset allocation ("SAA") advisor for our clients.

My biggest highlights for this year include:

  • Reaching our milestone fifth year of investing. We now have a five-year track record, and absolute returns are strong across nearly all asset classes, led by private equity at 17.1 per cent and public equities at 10.3 per cent. I’m especially encouraged by the early strength of this performance, given that we had to ramp up and reposition nearly all these strategies over the same period.
  • We continued our drive to internalize asset management both to save on fees and extract higher potential returns through the influence that comes with direct ownership.
  • We also implemented a more focused Sustainable Investing Strategy that will better position us to create value on this front. The global policy environment may have shifted on sustainability trends like the clean energy transition, but the fundamentals remain compelling, and we remain committed to this opportunity.


Tell us about IMCO's investment performance in 2024.

We had our best year ever in 2024 as IMCO strategies saw positive absolute returns across the board with the exception of real estate. We also made progress in migrating clients to new strategic asset mixes that will help them better meet their financial obligations and adopt IMCO’s strategies at the asset class level.

Public markets tested our core investing principles of active management and patient, long-term value creation. The public market benchmarks that we use for both our public and private market strategies reached all-time highs and concentration levels. Market beta becomes attractive at such times, tempting investors to throw prudent portfolio management to the wind. There is risk in the lofty valuations and concentration that benchmarks saw in 2024. We are actively analyzing the implications of benchmark concentration and took steps this year to mitigate associated total portfolio risk.

Our negative net value add was predominantly because of underexposure to the highly concentrated benchmarks and because private asset valuations tend to be less impacted by short-term public market fluctuations. We remain disciplined in executing our long-term investment strategies, because they reliably deliver the stable returns our clients need.

We still believe a diversified portfolio will outperform in the long term even with periods of underperformance as seen in 2024. We also continue to believe in diversifying across public and private assets and expect that valuations will converge over the long term, with private markets outperforming public markets, as they have in the past.

Our long-term results are encouraging. Our private equity strategy has added 808 basis points ("bps") in net value since inception. Infrastructure and global credit have added 211 and 219 bps, respectively. Apart from fixed income and real estate, importantly, our inception-to-date annualized returns are also positive across the board. Our clients rely on these returns to meet their financial obligations and we remain singularly focused on that.


2024 was another year of market volatility, geopolitical uncertainty, and a softening consensus around big themes like a commitment to net zero. How did your team navigate these headwinds?

We always monitor such developments closely and act as necessary to protect our portfolios against any short-term shocks. Still, to manage portfolios in line with our clients’ investment horizons, our main responsibility is patient value creation over the long term.

One key tool in that effort – and in responding to this year’s developments – is the IMCO World View. Much of 2024’s volatility can be understood through the themes and implications discussed in that document, such as the inflection in global monetary and fiscal policies, and heightened volatility and greater dispersion. Geopolitical uncertainty can also be understood through the World View’s lenses of deglobalization and addressing inequality.

This broad investment perspective helps us assess how to position portfolios for the events of any one year. It also informs broader approaches, such as a preference for investing in developed markets, with a more targeted approach to emerging markets.

When it comes to net zero, after careful study, IMCO committed to a competitively differentiated investment focus on climate change and the energy transition. It is clear to us from our research that rising global incomes and digitalization are driving surging energy demand just as climate change means a growing share of that energy must be clean.


Why is it important that IMCO became strategic asset allocation advisor to its clients?

The SAA decision is one of the most important determinants of total portfolio returns for an institutional investor. By entrusting us with this decision, our clients benefit from our holistic view of their assets and our portfolio construction and risk management expertise. It also enables them to focus on the long-term goals that SAA is meant to serve, such as paying pensions and insurance benefits.

Our dedicated portfolio construction team invested a great deal of time designing SAAs that will be the best possible fit for our clients’ risk tolerances and investment objectives. As we implement SAA recommendations and build out enhanced capabilities and investment strategies, we expect to continue to see this flow through to improved investment performance both at the IMCO total portfolio and asset class strategy level.


What's the key differentiator for IMCO's investment team?

We’ve attracted people who want to do good work and collaborate. We have been able to develop a culture where our investment professionals care about total portfolio return (not just about net value add). That means everyone is committed to how well each individual strategy is performing.

Our collaborative culture bodes well for our new role as SAA advisor to our clients.