S&P Capital IQ reports Iberdrola Energía Internacional, S.A.U. reached an agreement to acquire 80% stake in Caruna Networks Oy from KKR & Co.and Ontario Teachers' Pension Plan Board for €2 billion:

Iberdrola Energía Internacional, S.A.U. reached an agreement to acquire 80% stake in Caruna Networks Oy from KKR & Co. Inc. (NYSE:KKR) and Ontario Teachers' Pension Plan Board for €2 billion on July 21, 2026. The valuation attributed to 100 % of the Caruna Group, in enterprise value terms, including net financial debt, is approximately €5 billion , and will entail a total approximate outlay by Iberdrola Energía Internacional for 80 % of its share capital of  €2.014 billion as the purchase price, comprising a payment of approximately €1.014 billion on the closing date of the Transaction and a deferred payment of approximately €1,000 billion, payable within the 30 months following closing, subject to the customary adjustments in transactions of this nature.

Under the transaction, KKR will divest its entire 40% ownership stake in Caruna, and Ontario Teachers' Pension Plan (OTPP) will also sell its shareholding (40%) in the company. Upon completion of the transaction, Iberdrola will become the majority owner of Caruna. The ownership stakes of pension insurance company Elo (7.5%) and AMF (12.5%) will remain unchanged. The ownership change will have no impact on Caruna's operations, customers, employees, partners, or ongoing investments. The company's business operations will continue as normal.

The transaction has been entered into on customary market terms and is subject to the conditions precedent typical of transactions of this nature, including, among others, obtaining third-party approvals and the relevant regulatory authorisations regarding foreign investments in Finland, foreign subsidies and merger control by the European Commission. The Transaction is expected to be completed by the end of 2026 or during the first quarter of 2027. The transaction is expected to be EPS-accretive on the first year.

On Tuesday, Ontario Teachers’ issued a press release stating it has reached an agreement to sell stake in Caruna to Iberdrola:

• Iberdrola has agreed to acquire majority ownership of Finland’s largest electricity distribution company Caruna, including the 40% shareholding of Ontario Teachers’

London, July 21, 2026: Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced that it has reached an agreement to sell its 40% shareholding in Caruna, as part of a broader transaction that will see Iberdrola become the new majority shareholder for the business. The transaction values Caruna at around €5 billion, including its financial debt.

Caruna is Finland’s largest energy distribution company delivering around 12,000 GWh of electricity to over 740k customers in 80 cities and municipalities across the country. During the period of Ontario Teachers’ ownership, the key focus has been to support Caruna’s growth and strengthen the network, to improve resilience, drive security of supply and help support Finland’s energy transition.

James Adam, Senior Managing Director, Infrastructure at Ontario Teachers’ said: “We are proud to have been part of Caruna’s growth and development for the past five years. We would like to thank Matti Ruotsala, Jyrki Tammivuori and the Caruna team for their continued hard work in ensuring it delivers secure, reliable energy to its customers. We are confident that together with Iberdrola, Caruna will continue its success in its next chapter.”

The investment is subject to regulatory approvals and customary closing conditions.

About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $279.4 billion as of December 31, 2025. Ontario Teachers’ is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 346,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn.  

It is also worth reading the press release Iberdrola issued on this deal: 

• Caruna serves one and a half million people –more than 20% of Finland’s population– and has 89,000 km of electricity distribution networks
• The transaction marks Iberdrola’s entry into Finland, a market with an AA+ credit rating, attractive regulation and strong growth prospects driven by electrification
• The deal, together with the recent divestment of thermal power plants in Mexico, reinforces the Group’s strategy of focusing its investments on electricity networks

Iberdrola has reached an agreement to acquire Caruna, Finland’s leading electricity distribution company, in a transaction valuing 100% of the company at around €5 billion, including its financial debt.

The transaction will involve a payment of €2 billion for 80% of the company’s equity, while Nordic pension funds AMF and Elo will retain their current 20% stake.

Caruna is the country’s largest electricity distribution operator and serves one and a half million people –more than 20% of the Finnish population–. The company has a network of approximately 89,000 kilometres, 67% of which is underground.

Caruna operates, through two distribution concessions, in the area surrounding central Helsinki and in the Joensuu region —with strong industrial activity and growing demand linked to new data centres, as well as residential developments— and in other areas of western and north-eastern Finland.

Network growth and new opportunities

The acquisition, together with the recent divestment of thermal power plants in Mexico, reinforces Iberdrola’s strategy of focusing its investments on the networks business in stable markets with attractive regulatory regimes: Finland has an AA+ credit rating and a regulatory framework in place until 2031 that offers a return on equity of around 8%.

The company is expected to increase its earnings and asset base by around 7% annually over the coming years, with annual investments of between €200 million and €300 million to reinforce and digitalise its electricity network in a context of strong growth in renewable capacity1.

These investments could increase in the future due to growing demand, the electrification of the economy, the expansion of data centres and the development of electricity transmission infrastructure, which Finnish regulation has allowed distribution companies to undertake since the beginning of 2026.

Completion of the acquisition is expected in the first quarter of 2027, subject to obtaining customary regulatory approvals for this type of transaction.

Iberdrola’s executive chairman, Ignacio Galán, said: “This transaction reinforces our strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness. Finland offers high credit quality and a predictable and attractive regulatory framework, while Caruna has strong growth prospects due to the need for networks linked to new renewable generation, rising demand from the industrial and residential sectors and the electrification of the economy”. 

I discussed OTPP's investment in Caruna, Finland’s largest electricity distribution company, back in March 2021. You can read that comment here. 

Caruna is an excellent asset that was previously owned by OMERS Infrastructure prior to being sold to KKR and OTPP.

Now Iberdrola has acquired a controlling stake and KKR and OTPP couldn't have found a better strategic to acquire their 80% interest in Caruna (40% each).

Just read Iberdrola's press release and you'll understand why it acquired this asset and how it fits in its "strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness."

OTPP and KKR are big investors in the grid and this asset fits well in their respective portfolios.

They sold their interest, realized a gain, and will now move on to their next investment. 

It demonstrates that you do not need to keep an infrastructure investment on your books forever. If the right buyer comes along, you sell it at the right price. 

Below, Iberdrola has given a new boost to its strategy to grow in the electricity networks business and has reached an agreement to acquire Caruna, Finland's main electricity distribution company, in a transaction that values 100% of the company at approximately €5 billion, including its financial debt, and allows the group to enter this business in the Nordic country, the energy company reported.

The second clip shows you why this Spanish giant was the best company to acquire Caruna. Well done. 

Barbara Shecter of the National Post reports Brookfield and CPPIB team up to buy US$5.2 billion industrial REIT:

Two of Canada’s largest institutional investors are paying US$5.2 billion to acquire LXP Industrial Trust, a New York-based company with expertise in buying and developing premium industrial real estate in key logistics markets in the United States. 

Brookfield Asset Management and the Canada Pension Plan Investment Board are paying a 19.8 per cent premium to the 90-day volume-weighted average price for the publicly traded real estate investment trust, which focuses on Class A warehouse and distribution investments in 12 markets across the Sunbelt and U.S. Midwest.

LXP went public in 1993 as Lexington Realty Trust and trades on the New York Stock Exchange. It began as a diversified net-lease real estate investment trust and transitioned into what is now primarily a single-tenant industrial REIT focused on high-quality warehouse and distribution assets in a dozen U.S. logistics markets.

The company now owns one of the largest portfolios of modern warehouse and logistics facilities in the United States, with about 53 million square feet across 108 properties.

“The portfolio is characterized by modern assets, strong occupancy and long-duration leases that generate durable cash flows and is well positioned to benefit from the demand for high-quality, well-located logistics properties,” the trio said in a statement announcing the all-cash transaction.

The current business produces a combination of income and growth, which proved attractive to the Canadian institutional investors.

“The acquisition aligns with our strategy of investing in high-quality real estate with durable cash flows and opportunities to create value through active asset management,” said Lowell Baron, chief executive officer of Brookfield Real Estate.

Sophie van Oosterom, head of real estate at CPP Investments, said the investment portfolio alongside operating expertise in the partnership would generate sustainable investment returns for the CPP Fund.

“The industrial sector, particularly in the U.S., continues to offer attractive long-term investment opportunities,” she said, adding that demand drivers include domestic manufacturing, evolving global supply chains and population growth across key Sunbelt markets.

Under the terms of the definitive agreement, LXP shareholders will receive $61.20 per share in cash. The transaction is not subject to a financing condition.

Thomas W. Eglin, Jr., chairman and chief executive of LXP, said the company’s board of trustees unanimously determined that the Brookfield and CPP transaction fully maximizes value for shareholders.

“This transaction is the culmination of the LXP team’s successful execution of our strategic plan to transform … into a pure play industrial REIT, curate a best-in-class portfolio, and implement our development program,” he said.

Tania Theriault of Real Estate News Exchange also reports Brookfield, CPP to acquire LXP Industrial for US$5.2 billion:

Brookfield Asset Management (BAM-T) and CPP Investments will acquire LXP Industrial (LXP-N) in all-cash deal valued at  US$5.2 billion (all figures in U.S. unless indicated), including debt and preferred equity.

The pension fund and companies announced this morning that a definitive merger agreement has been agreed.

West Palm Beach, Fla.-based LXP is one the largest warehouse and logistics facilities owners in the U.S. Its portfolio comprises 53 million square feet across 108 properties.

“LXP has assembled a high-quality industrial portfolio with modern logistics assets in attractive markets,” said Brookfield Real Estate CEO Lowell Baron.

"The acquisition aligns with our strategy of investing in high-quality real estate with durable cash flows and opportunities to create value through active asset management. We’re excited to partner with CPP Investments and build on LXP’s strong foundation.”

The announcement, released Monday morning by LXP, said the transaction has been unanimously approved by its board of trustees and is expected to close in Q4, subject to approval by LXP’s shareholders and satisfaction of other customary closing conditions. It is not subject to a financing condition.

LXP's portfolio

"The portfolio is characterized by modern assets, strong occupancy and long-duration leases that generate durable cash flows and is well positioned to benefit from the demand for high-quality, well-located logistics properties," the release said.

CPP Investments managing director and head of real estate Sophie van Oosterom said the acquisition reflected the strong fundamentals in U.S. industrial.

“The industrial sector, particularly in the U.S., continues to offer attractive long-term investment opportunities, supported by structural demand drivers including domestic manufacturing, evolving global supply chains and population growth across key Sunbelt markets,” she said in the announcement.

“We look forward to partnering with Brookfield and combining their operating expertise with a well-positioned portfolio to generate sustainable investment returns for the CPP Fund in the interests of CPP contributors and beneficiaries.”

Terms and go-shop period

Under the terms of the definitive merger agreement, LXP shareholders will receive US$61.20 per share in cash, which represents a 12.3 per cent premium to LXP’s 30-day volume weighted average price (VWAP) and 19.8 per cent premium to LXP’s 90-day VWAP, in each case for the period ended July 17.

The definitive agreement includes a 40-day "go-shop" period expiring at 11:59 p.m. New York City time on August 28, during which time LXP may actively solicit and consider alternative acquisition proposals and engage in discussions with third parties. Subject to the terms and conditions of the definitive agreement, including notice and negotiation rights in favour of the buyers, LXP may terminate the transaction and the definitive agreement to enter into a transaction that constitutes a superior proposal, subject to the payment of a termination fee.

“This transaction is the culmination of the LXP team’s successful execution of our strategic plan to transform LXP into a pure-play industrial REIT, curate a best-in-class portfolio, and implement our development program," Thomas W. Eglin, Jr., chairman and CEO of LXP, said. "The LXP Board unanimously determined that this transaction with Brookfield and CPP Investments fully maximizes value for our shareholders."

Under the terms, LXP has agreed to suspend payment of common share dividends until the earlier of the closing of the transaction or the termination of the definitive agreement.

Subject to and upon completion of the transaction, LXP’s shares will no longer trade on the New York Stock Exchange and LXP will become a privately held company.

In light of the pending transaction, LXP announced it does not intend to host a conference call for its Q2 financial results, scheduled for release on July 29.

According to the release, BofA Securities, Inc. is acting as lead financial advisor, J.P. Morgan Securities LLC is acting as co-financial advisor and Hogan Lovells Cadwalader US LLP is serving as legal advisor to LXP.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLP are serving as financial advisors, Gibson, Dunn & Crutcher LLP and Thompson Hine LLP are serving as legal advisors to Brookfield and CPP Investments, with DLA Piper LLP serving as legal advisor to CPP Investments in connection with certain aspects of the transaction. Dechert LLP is acting as legal advisor to Citigroup Global Markets Inc. and Morgan Stanley & Co LLP.

About the parties

Brookfield Asset Management Ltd. is a leading global alternative asset manager formerly based in Toronto, now headquartered in New York, with over US$1 trillion of assets under management across infrastructure, energy, private equity, real estate and credit.

CPP Investments manages the Canada Pension Plan Fund in the interests of more than 22 million contributors and beneficiaries. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan at arm’s length from governments. At March 31, the fund totalled C$793.3 billion. 

LXP Industrial Trust is a publicly traded real estate investment trust focused on class-A warehouse and distribution investments in 12 target markets across the Sunbelt and Midwest. 

On Monday, CPP Investments issued a press release stating it has teamed up with Brookfield to acquire LXP in an all-cash transaction valued at approximately $5.2 billion:

NEW YORK, TORONTOandWEST PALM BEACH, Fla. – July 20, 2026 – Brookfield Asset Management (NYSE: BAM, TSX: BAM) (“Brookfield”), together with Canada Pension Plan Investment Board (“CPP Investments”), and LXP Industrial Trust (NYSE: LXP) (“LXP” or the “Company”), today announced that they have entered into a definitive merger agreement under which Brookfield and CPP Investments (collectively, “Buyer”) will acquire LXP in an all-cash transaction valued at approximately $5.2 billion, including outstanding debt.

LXP owns one of the largest portfolios of modern warehouse and logistics facilities in the United States, comprising approximately 53 million square feet across 108 properties in attractive industrial markets in the Sunbelt and Midwest. The portfolio is characterized by modern assets, strong occupancy and long-duration leases that generate durable cash flows and is well positioned to benefit from the demand for high-quality, well-located logistics properties.

Thomas W. Eglin, Jr., Chairman and Chief Executive Officer of LXP, said “This transaction is the culmination of the LXP team’s successful execution of our strategic plan to transform LXP into a pure play industrial REIT, curate a best-in-class portfolio, and implement our development program. The LXP Board unanimously determined that this transaction with Brookfield and CPP Investments fully maximizes value for our shareholders.”

“LXP has assembled a high-quality industrial portfolio with modern logistics assets in attractive markets,” said Lowell Baron, Chief Executive Officer of Brookfield Real Estate. “The acquisition aligns with our strategy of investing in high-quality real estate with durable cash flows and opportunities to create value through active asset management. We’re excited to partner with CPP Investments and build on LXP’s strong foundation.”

“The industrial sector, particularly in the U.S., continues to offer attractive long-term investment opportunities, supported by structural demand drivers including domestic manufacturing, evolving global supply chains and population growth across key Sunbelt markets,” said Sophie van Oosterom, Managing Director, Head of Real Estate at CPP Investments. “We look forward to partnering with Brookfield and combining their operating expertise with a well-positioned portfolio to generate sustainable investment returns for the CPP Fund in the interests of CPP contributors and beneficiaries.”

Under the terms of the definitive merger agreement, LXP shareholders will receive $61.20 per share in cash, which represents a 12.3% premium to LXP’s 30-day volume weighted average price (“VWAP”) and 19.8% premium to LXP’s 90-day VWAP, in each case for the period ended July 17, 2026.

Transaction Details

The transaction has been unanimously approved by LXP’s Board of Trustees and is expected to close in the fourth quarter of 2026, subject to approval by LXP’s shareholders and satisfaction of other customary closing conditions.  The transaction is not subject to a financing condition.

The definitive agreement includes a 40-day “go-shop” period expiring at 11:59 p.m. New York City time on August 28, 2026, during which time LXP, with the assistance of its advisors, may actively solicit and consider alternative acquisition proposals and engage in discussions with third parties. Subject to the terms and conditions of the definitive agreement, including notice and negotiation rights in favor of Buyer, LXP may terminate the transaction and the definitive agreement to enter into a transaction that constitutes a superior proposal, subject to the payment of a termination fee.

There can be no assurance that the solicitation process will result in a superior proposal or that any other transaction will be approved or completed. LXP does not intend to disclose developments with respect to this solicitation process unless and until its Board determines such disclosure is appropriate or otherwise required.

Under the terms of the definitive merger agreement, LXP has agreed to suspend payment of common share dividends until the earlier of the closing of the transaction or the termination of the definitive agreement.

Subject to and upon completion of the transaction, LXP’s shares will no longer trade on the New York Stock Exchange and LXP will become a privately-held company.

LXP’s Second Quarter 2026 Results

LXP intends to release its second quarter 2026 financial results as scheduled on July 29, 2026. In light of the pending transaction, LXP does not intend to continue hosting conference calls or webcasts to discuss its quarterly financial results.

Advisors

BofA Securities, Inc. is acting as lead financial advisor, J.P. Morgan Securities LLC is acting as co-financial advisor and Hogan Lovells Cadwalader US LLP is serving as legal advisor to LXP.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLP are serving as financial advisors and Gibson, Dunn & Crutcher LLP and Thompson Hine LLP are serving as legal advisor to Brookfield and CPP Investments, with DLA Piper LLP serving as legal advisor to CPP Investments in connection with certain aspects of the transaction.  Dechert LLP is acting as legal advisor to Citigroup Global Markets Inc. and Morgan Stanley & Co.

About Brookfield Asset Management

Brookfield Asset Management Ltd. (NYSE, TSX: BAM) is a leading global alternative asset manager, headquartered in New York, with over $1 trillion of assets under management across infrastructure, energy, private equity, real estate, and credit. We invest client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy. We offer a range of alternative investment products to investors around the world — including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. We draw on Brookfield’s heritage as an owner and operator to invest for value and generate strong returns for our clients, across economic cycles.

For more information, please visit our website at www.bam.brookfield.com.

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Canada Pension Plan Fund in the best interests of the more than 22million contributors and beneficiaries. In order to build diversified portfolios of assets, we make investments around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan at arm’s length from governments. At March 31, 2026, the Fund totaled $793.3 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Instagram or on X @CPPInvestments.

About LXP Industrial Trust

LXP Industrial Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) focused on Class A warehouse and distribution investments in 12 target markets across the Sunbelt and Midwest.

This is a massive deal where two giant Canadian funds -- Brookfield and CPP Investments -- are taking LXP Industrial Trust private.

I do not have statistics but this might be the largest take private deal in REITs this year.

What is the attraction here? In my opinion, high-quality industrial properties in the Sunbelt and Midwest are where smart investors are focusing right now because of favourable demographic and economic trends. 

Cities like Phoenix and Cincinnati, to name a couple, are booming and industrial warehouses there will continue doing well.

This is why they paid a slight premium to obtain these assets. 

Partnering up with Brookfield, which was the lead investor here, is also a smart move for many reasons.

It demonstrates how CPP Investments uses its size and reputation to its advantage and has become the investor of choice for large co-investments. 

Below, Jonathan Petersen, managing director at Jefferies, joins BNN Bloomberg to discuss Brookfield's purchase of LXP for $5 billion.

Also, Will Eglin, chairman and CEO of LXP Industrial Trust (NYSE: LXP), sat down for a video interview at Nareit's REITweek: 2026 Investor Conference in New York, June 1-4.

Industrial real estate fundamentals remain healthy even as the sector settles into a more normalized operating environment, he said. Eglin added that LXP continues to benefit from its focus on logistics facilities in high-growth markets, where tenants are making long-term investments in automation and supply chain efficiency. 

Listen to his comments, great investment by Brookfield and CPP Investments. 

James Bradshaw of the Globe and Mail reports CAAT governance review leads to changes at the pension plan:

The CAAT Pension Plan is making changes to improve its governance over executive compensation, workplace relationships and succession planning after failures in the plan’s oversight spurred an abrupt overhaul of its senior leadership earlier this year.

In a letter to members and employers published on Friday, the board of trustees for the $25.4-billion pension plan said it made “enhancements” to its governance procedures after a third-party review, which began last December and concluded earlier this year.

CAAT did not release the full results of that review, which was led by Carol Hansell, the founder and senior partner of Hansell LLP. And the letter to members provides only a broad outline of the governance changes that have been implemented.

CAAT hired Ms. Hansell after some of the plan’s most senior executives, in a letter sent to trustees in November, 2025, urged the board to investigate instances where they felt governance controls had broken down.

Their concerns focused on the conduct of then-chief executive officer Derek Dobson. He had received a $1.6-million vacation payout as compensation for unused time off that was at odds with internal policies. He was also having a personal relationship with a staff member for more than a year, with the board’s approval.

After CAAT’s board initially stood by Mr. Dobson, three of the plan’s top executives left in January, with little explanation. After The Globe and Mail reported on internal tensions at CAAT, its board chair was ousted, its vice-chair resigned and Mr. Dobson left the plan as part of a settlement that required him to repay the $1.6-million payout.

CAAT is a multiemployer pension plan serving Ontario’s colleges and more than 800 public- and private-sector employers with about 125,000 members. The Globe has been a participating employer since 2022.

Friday’s letter to CAAT members and employers says the board took steps to “strengthen its oversight” of executive compensation, with improved transparency. CAAT’s 2025 annual report includes a table that discloses total pay to the plan’s senior executive team. But it does not reveal individual compensation levels as most other major Canadian pension plans have for years.

The letter refers to “planned compensation disclosure” for future years, without elaborating. In 2025, CAAT’s top leaders were paid a combined $9.73-million, including the $1.6-million vacation payment that was later repaid in 2026. That compared with $7.65-million in 2024.

CAAT’s board also said it has “updated its workplace relationship policy” to prohibit internal relationships involving the CEO or senior executives, regardless of whether there is a direct reporting line between the employees.

Earlier this year, CAAT initially said that Mr. Dobson’s relationship with an employee was in “full compliance” with policies that had been reviewed by external legal counsel. The board had planned to allow Mr. Dobson and the employee to stay in their roles, with measures in place that were intended to prevent conflicts of interest or the perception of favouritism.

On Friday, the board said it has “affirmed” that CAAT’s human-resources policies apply to all employees, regardless of their title or role, including those that relate to carrying over vacation days or claiming pay for unused days.

Mr. Dobson received reimbursements for accumulated vacation days despite internal company guidelines that stated vacation time must be used within one year after the year when it was earned, and capped payouts at five vacation days. Earlier this year, CAAT said the CEO had an employment contract that governed his pay and benefits.

“We believe clear, consistently applied policies will enhance accountability and fairness across the organization,” trustees wrote in Friday’s letter to members.

CAAT’s board is also “strengthening succession planning” for board and committee leaders, the CEO and senior executives, the letter said. In June, CAAT started a search for a permanent CEO, led by executive consulting firm Egon Zehnder.

The plan is currently led by interim CEO and chief investment officer Kevin Fahey, who oversees a revamped leadership team. A new board chair and vice-chair were chosen from the existing group of trustees earlier this year.

Finally, CAAT’s board said it will “continue to regularly review the skills and experiences of trustees to ensure the board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT’s size and complexity.”

The board is divided between trustees appointed by the union that represents many college employees in Ontario, the Ontario Public Service Employees Union (OPSEU), and the College Employer Council, which advocates on behalf of educational institutions.

“Of course, good governance only gets stronger through ongoing improvement,” the board’s letter said. 

On Friday, CAAT Pension Plan's Board released this letter to members and employers:

To Members and Employers,

We want to highlight several enhancements the Board has made to build on how the Plan is governed in its members’ best interests. These actions follow the conclusion of an independent governance review of the Plan, led by Carol Hansell (Senior Partner, Hansell LPP). Importantly, the matters examined did not relate to the Plan’s financial health and funded status. Your pension is secure.

Recently, we initiated the search for a permanent CEO. Our focus will be on a new leader who can combine strategic vision with operational discipline, inspire confidence across stakeholders and build on CAAT’s strong culture and performance. The Board is strengthening succession planning for Board and committee leaders, the CEO, and senior executives to maintain strong leadership over time.

The Board took additional steps to strengthen its oversight of CEO and senior executive compensation. At the Board’s direction, CAAT has also made executive compensation more transparent through its 2025 Annual Report and planned compensation disclosure. Together, these initiatives reinforce Board oversight, enhance transparency, and support sound governance of executive compensation.

CAAT has updated its workplace relationship policy. It now prohibits internal relationships involving the CEO or senior executives, regardless of reporting relationships. The Board has also affirmed that CAAT’s Human Resources policies apply to all employees, regardless of level, title or role. This includes policies related to vacation carry-over and vacation pay. We believe clear, consistently applied policies will enhance accountability and fairness across the organization.

The Board remains committed to continuously enhancing its governance practices. As part of this commitment, it will continue to regularly review the skills and experiences of Trustees to ensure the Board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT's size and complexity. Over the past year, seven new Trustees have joined the Board, further strengthening and complementing the existing mix of skills, experience, and perspectives required to provide effective oversight of the Plan.

In addition to the enhancements outlined above, in 2026, the Board appointed a new Chair and Vice-Chair as well as an Acting CEO, who has deep knowledge of the organization, sound judgment, and the steady leadership needed to maintain stability in our operations and continuity at CAAT. And the Plan announced a new leadership team to execute on the Plan’s strategy, maintain stakeholder trust and continue to deliver on CAAT’s pension promise to its members.

Taken together, these actions help provide CAAT with the leadership and governance practices needed to maintain the prudent and responsible management of the Plan. Of course, good governance only gets stronger through ongoing improvement. The Board will continue to act in the members’ best interests, so the Plan can help support the retirement they want and deserve. 

CAAT Board of Trustees

Let me briefly go over this.

First, CAAT Pension Plan's Board chose the right person to conduct a thorough governance review.

Carol Hansell of Hansell McLaughling Advisory is one of the foremost experts in Canada on corporate governance.

She has written many articles and a comprehensive book on the subject and has received awards for her accomplishments. 

She has served on the boards of the Bank of Canada, the Public Sector Pension Investment Board, Toronto East General Hospital and SickKids Foundation, among others. 

I trust her knowledge and judgment and think highly of her, so her handling of the governance review at CAAT Pension Plan gives this report huge credibility.

The report has not been made public, nor does it need to be made public, but we see the Board is already moving fast to enhance oversight and implement much-needed changes.

The Board has made executive compensation more transparent, but has yet to commit to doing what all the other large and medium-sized pension plans I track closely do. It should publish the compensation of the top senior officers every year when it releases the annual report.

This is just basic good governance and is much better than releasing the aggregate compensation of senior officers  (if most of that goes to the CEO, members have a right to know why).

Updating the workplace relationship policy to now prohibit internal relationships involving the CEO or senior executives, regardless of reporting relationships, is just basic common sense.

I don't know who former CEO Derek Dobson had a relationship with at CAAT (I suspect I now know who), but it wasn't one of his best decisions in terms of showing good judgment (the world is a big place; my advice to all employees, no matter their rank, is to avoid workplace relationships at all costs; they rarely end well).

The Board also said it will continue to regularly review the skills and experiences of Trustees to ensure the Board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT's size and complexity."

This, too, is Governance 101. You need a competent board of directors that understands complex subject matters to properly oversee activities at large pension plans.

Anyway, I doubt CAAT Pension Plan will release Carol Hansell's full governance review, but the Board is doing the right thing by communicating key findings effectively. 

I personally wouldn't release it, no need to, as they are taking the right course of action to act on key recommendations. 

I'll end it there, not much to add here, nor was I going to cover this in detail but wanted my audience to be aware that the governance review is completed, and it was done by a real corporate governance expert who knows what she's talking about. 

Below, strong Canadian corporate governance is the backbone of board accountability and long-term value creation. Yet boards today operate under intensifying regulatory scrutiny, with over 120 enforcement actions initiated by Canadian securities regulators in 2023 alone. Directors must navigate overlapping federal and provincial regimes, while facing growing personal liability risks. Nearly 1 in 4 companies in Canada have disclosed material governance deficiencies in recent filings, underscoring the increasing complexity boards must manage. 

This certified program will provide you with a comprehensive understanding of Canada’s corporate governance framework, equipping you with practical tools to lead boards effectively, manage liability risks, and ensure regulatory compliance. You will gain applied knowledge of the Canada Business Corporations Act (CBCA), provincial corporate statutes, and securities regulations, while mastering key concepts such as fiduciary duties, duty of care, duty of loyalty, and the business judgment rule to support sound board decisions.

All I can share with you is that governance is a work in progress, courses provide basics, the real test is when it hits the fan. That's when governance is critically important.

Grace O'Donnell , Jake Conley and Ines Ferré of Yahoo Finance report the Dow, S&P 500, Nasdaq post weekly losses as semiconductors get smoked:

US stocks declined on Friday, with the major indexes posting weekly losses led by declines in the semiconductor sector.

The Dow Jones Industrial Average fell by about 0.7%, while the S&P 500 declined by 1%. The Nasdaq Composite shed 1.4% following a downbeat day on Wall Street and the release of the world's most powerful open AI model.

The S&P 500 dropped more than 1.5% for the week while the Nasdaq declined 2.9%. The Dow lost nearly 1% over the past five sessions. 

A sell-off in chip stocks dampened sentiment on Friday as the PHLX Semiconductor Index (^SOX) entered a bear market. However, the sector closed off its session lows as investors bought the dip.

"Magnificent Seven" stocks closed out the Friday session and week mixed, with Apple (AAPL) gaining 6% for the week, while Alphabet (GOOG, GOOGL), Meta (META), and Tesla (TSLA) were all lower over the past five trading days.

The market's tech-driven rally from March lows has been put to the test as companies' massive spending on artificial intelligence clouded optimism for the AI trade. Adding to AI jitters on Friday, Chinese AI startup Moonshot on Friday unveiled Kimi K3, a powerful open AI model that it says is the world's largest, rivaling Anthropic's frontier Fable model. 

Netflix stock (NFLX), meanwhile, declined by 7% after the company's third quarter revenue forecast disappointed the Street as the streaming giant battles a "dynamic and competitive" entertainment landscape.

A few smaller banks, including Truist Financial Corporation (TFC) and Fifth Third Bancorp (FITB), rounded out the week's earnings docket, while the University of Michigan's preliminary consumer sentiment reading showed Americans started to feel better about the economy as gas prices eased. 

Sean Conlon, Chloe Taylor, Justina Lee and Fred Imbert of CNBC also report the S&P 500 closes lower, Nasdaq falls more than 1% as chip stocks suffer:

Stocks fell again on Friday, with Wall Street posting a weekly decline, as traders weighed the latest moves in semiconductor names along with recent quarterly reports.

The broad market index lost 1.01% to end at 7,457.69, while the Nasdaq Composite dropped 1.4% to 25,520.24 as tech stocks came under scrutiny. The Dow Jones Industrial Average fell 406.55 points, or 0.77%, to close at 52,146.42.

The major stock benchmarks notched weekly losses, with the S&P 500 off 1.6%, while the Nasdaq slid 2.9%. The Dow fell 0.9% on the week.

The VanEck Semiconductor ETF (SMH) posted its third weekly decline in four weeks, dropping almost 9% in the period. Semiconductors were hit especially hard earlier in the session after Chinese startup Moonshot AI unveiled a new model that it said narrows the gap with the top offerings in the U.S.

“The latest development is competition from open-source models in China, which are reportedly rivaling the performance of leading offerings from Anthropic and OpenAI, raising fresh concerns about the heavy pace of technology spending,” said Angelo Kourkafas, senior investment strategist at Edward Jones.

“We are seeing signs of fatigue, with end-user demand for AI becoming more price sensitive and the market starting to penalize companies that are ramping spending too aggressively,” he continued. “We view this volatility as a signal that the AI theme is likely maturing rather than breaking, which is a healthy part of how transformative investment cycles evolve.”

Alongside chips, shares of Netflix were a major laggard Friday, falling more than 7% as the company’s forecast failed to ease investor concerns that growth is slowing.

Further escalations in the U.S.-Iran war also remained in focus, with oil prices rising in their wake. U.S. West Texas Intermediate crude futures rose 4.5% to settle at $82.49 per barrel, while international benchmark Brent crude futures advanced 4.6% to close at $88.10.

Kuwait said on Friday that Iran attacked a power and water desalination plant, and U.S. Central Command said overnight that it had completed its sixth consecutive evening of strikes against Iran, hitting dozens of military targets, including logistics infrastructure and maritime capabilities.

Iranian officials also claimed on Friday to have targeted U.S. military forces in Syria and Bahrain, widening Tehran’s attacks further across the Middle East.

This comes as the fragile truce reached last month has fractured, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world’s oil traffic.

The latest move in oil is “going to freak people out, but we still remain right in the ballpark of average,” said David Wagner, head of equities at Aptus Capital Advisors. Wagner added he’s optimistic on the broader market even with elevated oil prices, saying, “I’m still bullish, but there might be more volatility moving forward.” 

I haven't written a market comment in some time, not because I'm not trading and looking at everything that moves in the stock market, but because it's summer and most people are away on vacation and don't really care about the stock market. 

But there's no denying the red-hot momentum trade fed by chip stocks has taken a beating thus far in Q3:

 

I say thus far because the last two big dips were bought hard and the same can happen next week, momentum can/ should bounce big, but will it hold its gains and make new highs?

I'm not so sure about making new highs. There is a lot of technical damage here and keep in mind, many of the red-hot stocks in memory chips (Micron, Western Digital Corp, Sandisk, etc) all had parabolic moves up going into Q3, so we shouldn't be surprised that rebalancing/ profit-taking took place.

The thing people forget about momentum is that it's great on the way up, algos go crazy driving shares higher and higher, but these momo traders are fickle and exit fast at the first sign of trouble.

In my 30 years of trading markets, I have found that parabolic charts always end badly, regardless of the sector being examined.

And stocks do not go up or down in a straight line, unless it's a biotech stock that shoots up on buyout rumours and gets annihilated if the company's drug fails a major trial (then you can see a 75-90% wipe-out in one day).

But stocks move, and sometimes they move very abruptly.

Earlier this week, IBM shares slid 25%, posting its worst trading day in history:

It's IBM, a major Dow stock, and it got clobbered after the software giant posted preliminary results for the second quarter that disappointed.

Why is this relevant? Because it shows you how in this market, any disappointment is met with ferocious selling.

And sometimes, even when stocks do well and don't disappoint, they still get clobbered.

All the major US banks (JPM, Goldman, Citigroup, Bank of America, etc) posted solid results early this week but sold off in the latter half of the week.

Too soon to tell if there is a major change in trend there but for me, Q2 was as good as it gets for big US banks and the potential for lower returns going into the latter half of the year is elevated here:

Still, don't get me wrong, the charts look great, they definitely scream bullish from a technical perspective but be careful.

Anyway, here are this week's top-performing US large-cap stocks and the worst performers:

 

It summarizes what I explained above: hot momentum stocks got smoked again this week.

Next week, some of the big tech companies report earnings so let's see what they report.

I actually like some of the Mag-7 stocks here, think some of them are really cheap.

The top-performer there remains Apple, which hit another record high this week.

 

Apple shares tend to do well when the high-flying tech names get clobbered, which explains why they are on a tear early in Q3.

Alright, that's a wrap.

Below, in this CNBC appearance, Tom Lee, Head of Research at Fundstrat, breaks down why the recent volatility in semiconductor and memory names is a healthy reset rather than the end of the trade.

Also, Warren Pies, 3Fourteen Ventures, joins 'Closing Bell' to talk his take on the tech trade as the market sinks into the close.

Third, 'Fast Money' traders talk SpaceX's negative trading week. I can shw you many IPOs getting smoked in Q3.

Last but not least, Liz Ann Sonders, Charles Schwab chief investment strategist, joins 'The Exchange' to discuss how to think about semiconductor stocks, market rotations and much more. She's always worth listening to.

Today, the Ontario Teachers' Pension Plan announced that Cathy Cranston was appointed Board Chair, starting next year:

July 16, 2026 – Ontario Teachers’ Pension Plan is pleased to announce that Cathy Cranston will be appointed Board Chair, effective January 1, 2027. She has been an esteemed member of the board since 2019 and currently serves as the Chair of the People & Compensation Committee and as a Member of the Investment and Enterprise Risk Committees. 

Ms. Cranston’s appointment was made by the Ontario Government and the Ontario Teachers’ Federation, who are the plan’s co-sponsors. She will succeed current Board Chair Steve McGirr when he retires from the board at the end of 2026 after successfully serving his full term.

Ms. Cranston built a 32-year career in progressive roles at BMO Financial Group, most recently as Treasurer. She previously held senior roles including Head of Financial Strategy, Capital and Funding, and Chief Financial Officer, Private Client Group. Over the course of her career, she held executive roles in investor relations, wealth management, risk management, capital markets and corporate banking.

“Cathy’s history of senior leadership and deep experience in financial services makes her an excellent choice to step into the role of Board Chair for Ontario Teachers’ Pension Plan,” said Mr. McGirr. “I would like to thank the Ontario Teachers’ Federation and Ontario Government for their engagement and collaboration in appointing the next Board Chair and for their longstanding commitment to sustaining good governance at the plan.” 

“I am deeply honoured to assume the role of Board Chair at the end of the year and to build on Steve’s tremendous leadership and the legacy of those who came before him,” said Ms. Cranston. “Steve leads the Board with integrity, steadiness and a clear commitment to Ontario’s teachers. I look forward to working closely with him and the rest of the board in the coming months as I transition into the new role, as well as Jo Taylor and the entire executive team as they continue working to deliver the pension promise to Ontario’s teachers.”

In addition to her role at Ontario Teachers’ Pension Plan, Ms. Cranston is currently an independent board Director for Toromont Industries Ltd., Canadian Tire Corporation Limited, and Canadian Tire Bank. She holds a Master of Business Administration and Bachelor (Honours) of Commerce from the University of Manitoba and holds the ICD.D designation from the Institute of Corporate Directors.

About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $279.4 billion as at December 31, 2025. Ontario Teachers’ is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 346,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn.  

I normally do not cover board appointments, but OTPP's board has a legacy of having very strong chairs.

From appointing a respected former governor of the Bank of Canada, Gerald Bouey, as the founding chair, to Eileen Mercier, who was appointed back in 2007, to Jean Turmel, who replaced her in 2015, to Steve McGirr, who replaced him in 2018, the chairs at OTPP have always been highly respected, very accomplished professionals.

Ms. Cranston is no exception; her resume speaks for itself, which is why she was chosen for this venerable position. 

People do not realize the amount of work required from board members, but I've seen it firsthand; they need to review an insane amount of material and oversee the activities at these pension plans.

No doubt, it's a prestigious honour to sit on these boards, but don't kid yourself, a lot of work goes into it.

The Chair has to orchestrate all this and lead the Board, have a firm understanding of all the critical strategic initiatives taking place, and ensure that the organization is fulfilling all its objectives.

The position carries huge responsibility, but Ms. Cranston has strong board members to help her in this role (see their bios here).

She will also work with a strong management team that knows its mission and is clearly aligned with its members.

Let me end by congratulating Cathy Cranston on this important nomination and wish her much success.

Below are a couple of excellent recent discussions featuring OTPP's CEO Jo Taylor. First, in this episode of School of Thought, Jo sits down with C.S. Venkatakrishnan (Venkat), CEO of Barclays.

Second, in another episode of School of Thought, Ontario Teachers’ President & CEO Jo Taylor sits down with Katie Martin, Financial Times Markets Columnist and co-host of the Unhedged podcast. Drawing on more than two decades covering global markets, Martin shares what she has learned from speaking with investors, business leaders, and policymakers through periods of change and uncertainty. 

Great discussions, take the time to listen to them (I learned that Jo studied Russian history, fascinating).