IM-Kaufman_2023_0811.pub

Local governments recognize the importance of effective asset management, as it is crucial for making timely investments that minimize costs and optimize the repair and rehabilitation of capital assets. [...] Compared to pensions that may hold assets with long maturities, LGIPs allow local governments and public agencies to combine their funds to invest in highly liquid financial instruments such as money-market funds and short-duration government bonds that allow quick access to cash. [...] As an added benefit, LGIPs enable local governments and public agencies to consolidate their resources and invest in a broader range of assets, potentially yielding increased returns and providing greater investment portfolio stability. [...] One potential solution is improving the coordination between local governments and Ontario’s public-asset management institutions such as ONE Investment and the Investment Management Corporation of Ontario (IMCO). [...] To implement better pooling and higher-return investments for municipal government, the Ontario government should consider legislative changes to remove limits on investment durations and improve clarity on investment pooling.