Lauren Bailey of Markets Group takes a look inside the Halifax Port ILA/HEA Pension Plan’s ‘micro Maple 8’ strategy:

Markets Group Lifetime Achievement Award recipient Blair Richards reveals how a small Canadian pension plan quietly outperformed expectations for decades — and why the traditional playbook was never going to be enough.

In this wide-ranging conversation, the longtime CIO of the Halifax Port ILA/HEA Pension Plan shares how he transformed a conservative 70% fixed-income portfolio into a forward-thinking “mini Maple Model,” embracing private equity, private credit, and alternative assets long before it became mainstream.

Richards explains how disciplined long-term investing, diversification across vintages, and a relentless focus on member outcomes helped the plan achieve a remarkable 134% solvency ratio and inflation-beating pension increases, while many other sponsors were abandoning defined-benefit pension plans altogether.

He also opens up about one of the defining decisions of his career: securing a landmark buyout with Sun Life that guarantees retirees a 4% annual cost-of-living adjustment for life. Along the way, he discusses the risks of today’s geopolitical climate, why he’s cautious on artificial-intelligence investing, and the leadership philosophy that shaped his success: surround yourself with experts and trust them deeply.

This episode is a masterclass in pension investing, fiduciary leadership, and adapting institutional strategies for the real world — whether you manage billions or just want to understand how the smartest long-term investors think. 

A week ago, Lauren Bailey also reported Halifax Port ILA/HEA pension completes PRT deal with Sun Life, locks in 4% COLA:

The Halifax Port International Longshoremen’s Association/Halifax Employers Association Pension Plan has entered into a pension risk transfer deal for its defined-benefit pension plan with the Sun Life Assurance Co. of Canada that locks in guaranteed annual increases.

The move comes as the plan reported a 147% solvency ratio in 2025. The Halifax Port ILA/HEA, which dates back to the 1950s and serves roughly 600 active members and 300 retirees, completed the buyout transaction valued at approximately C$57M.

For years, the Halifax ILA/HEA has maintained a surplus, enabling it to provide ad-hoc pension increases that ultimately tripled pension payments over time, said Blair Richards, the plan’s chief investment officer.

“That was the reason we held onto the plan, continued to run it in the first place,” he said.  

During a panel discussion hosted by Sun Life, Richards noted that in 2024, the plan’s actuary determined the policy had exhausted its available room, preventing further increases despite the plan’s strong surplus position. The realization prompted trustees to explore 12 strategic alternatives before ultimately pursuing a buy-in and buyout structure.

“Once it was clear that we could not do any better on an ad-hoc basis with respect to pensioner raises than we could guarantee with a buyout, the decision was obvious,” Richards told Markets Group. “We locked in a 4% annual cost-of-living adjustment for our retirees.”

The transaction also required solving for illiquid real estate assets held within the pension portfolio. While most of the plan’s assets were invested in liquid funds, a portion earmarked for the annuity premium was tied to a real estate vehicle with limited redemption flexibility.

Mercer, which advised the plan on the pension risk transfer, worked with Sun Life to develop a deferred premium structure that allowed the illiquid assets to remain in place while transferring pension risk immediately.

“We agreed to divide the premium into two components,” said Emile Alarie, principal and PRT specialist at Mercer, during the panel discussion. “A cash premium that would be paid at the onset like a typical premium transfer, and a deferred premium that would cover the illiquid asset portion.”

The deferred portion was structured similarly to a loan, allowing repayment over time as the underlying real estate fund generated liquidity. The arrangement enabled the plan to lock in pricing and complete the transaction without waiting for the assets to fully liquidate.

Alarie said the structure could provide a template for other Canadian pension plans holding illiquid assets that are exploring de-risking efforts.

“In the end, what we wanted to do was find a way to get this deferred premium completed, and ultimately we got to the goal with this innovative feature,” he said.

The plan also placed significant emphasis on governance, data validation and communication throughout the process. Richards said trustees were repeatedly updated to ensure they fully understood the implications of the transaction before making a final decision.

Improving funded ratios and elevated interest rates have prompted more Canadian pension plans to evaluate pension risk transfer strategies and annuity purchases. Plan sponsors are increasingly exploring customized structures to address illiquid holdings, surplus management and inflation protection within defined-benefit plans.

A TELUS Health report citing Financial Services Regulatory Authority of Ontario data showed a median solvency ratio of 124% for Ontario plans in the third quarter of 2025, with stability maintained through the year. With many Canadian plan sponsors sitting on meaningful surplus, the focus, said the report, will likely be on both protecting and strategically utilizing these positions to derive value.

It noted that surplus can quickly evaporate with the changing environment, making it critical for plan sponsors to review their funding and investment strategies to protect their gains.

After decades helping oversee the Halifax Port ILA/HEA pension plan, Richards is now preparing to retire. He leaves the role with a strong sense of satisfaction, having realized outsized growth and, now, the plan’s de-risking transaction.

“I’m not sure it could be any more satisfying,” Richards said. “The results speak for themselves.”

Still, he acknowledged that he’s leaving as economic uncertainty remains a constant feature of the investment landscape.

“There are always challenges,” he said. “Geopolitical risks can’t be ignored at the moment, but the plan is in very strong shape and in very capable hands, so I remain optimistic.” 

I met Blair Richards years ago at a conference and hit it off with him because he's a smart, no-nonsense type of guy who gets it.

I like this interview a lot, which is why I embedded below.

Let me provide some more background. 

Two years ago, Bryan McGovern of Benefits Canada reported on Halifax Port ILA/HEA assessing past, future of DB pension plans:

While Blair Richards understands why the industry is moving away from defined benefit pension plans, he worries about what may be lost in the process.

When Richards — the chief investment officer at the Halifax Port ILA/HEA pension plan — joined the institutional investor 40 years ago, DB plans were an attractive hiring and retention tool for private sector employers. Now, he says the risk associated with these plans has led to a widespread exit strategy.

The organization opted to keep its DB plan, which has been closed since 1984. “I have unfortunately lived through what I guess was the high point of DB plans and what will eventually be a complete loss. . . . I had hoped . . . [they’d] come back around. [They have] slightly, but [not] like . . . before.”

The Halifax Port ILA/HEA continues to manage the DB plan’s investments, but without further financial support from its employers, the investment team knew it had to take a conservative approach.

Due to its size, the breakeven point is low compared to most, which motivated the team to focus on alternative investments early on, says Richards, noting the plan has also reduced its allocations to fixed income over time.

“Now as the rates have come back up, the reason we got away from that high weighting is that if your breakeven is five per cent and your expected return around a 10-year bond is two per cent, you can’t sit on that position. You’re forced away from that very bond that has served you so well for decades.”

The development of advanced life deferred annuities and variable payment life annuities has helped the plan provide lifetime payments to members. Indeed, for more than 30 years, the plan has been providing raises to members, says Richards. “Not only did we increase pensions, we . . . increased those pensions by 155 per cent . . . above inflation over the period, so we’re sitting on a very successful plan here.”

While increasing pension benefits is a priority for the Halifax Port ILA/HEA, an internal policy on excess interest has prevented an increase over the last two years, during which the plan’s surplus grew to 134 per cent on a solvency basis as of the end of September 2023.

Read: Blair Richards moves to CIO of Halifax Port ILA/HEA pension plan

He says the plan has shifted away from this policy and increases are expected to begin again this year.

Employees enrolled in the Halifax Port ILA/HEA’s defined contribution plan can also purchase a pension from the DB plan. “At the point of retirement, they can take part of their balance, put it in the DB [plan] and create a floor between that and their government benefits — they can roll a portion into a registered retirement income fund or a life income fund to have the flexibility that a lot of people want.”

He credits much of the success of the DB plan with a long-term strategy, rigorous discipline and always asking questions from the perspective of members. “What we did was take that notion of fiduciary to heart. We wanted the best for the retirees in particular, but [for] pension members in general and we’ve proven that it is possible.” 

As you can read, the Halifax Port ILA/HEAisn't that "mini", it manages billions and Blair did a great job as CIO there, taking intelligent risks and diversifying the asset allocation to make the plan more resilient.

He's preparing for retirement, and in my opinion, he should write a book about his experience managing this plan.

Anyway, take the time to listen to Blair's interview below where he shares great insights with Lauren Bailey. Great guy in every respect, he deserves a nice retirement.

Matt Toledo of Chief Investment Officer reports Ontario Teachers’ Pension Appoints Intelligence Strategy Head:

The board of the Ontario Teachers’ Pension Plan announced last week the appointment of Feifei Wu to the newly established role of senior managing director of investment technology and applied intelligence.

Wu will lead the pension fund’s artificial intelligence strategy to strengthen governance and accelerate the adoption of the technology while partnering with investment leaders to ensure AI enables key business outcomes, according to the OTPP’s announcement. Wu will report to OTPP Chief Technology Officer Terry Hickey.

“I am pleased to welcome Feifei to Ontario Teachers’ in this important role at a pivotal time in our technology journey,” Hickey said in a statement. “She brings a strong combination of technical expertise and proven leadership across global financial institutions. Her experience building high-performing technology teams and her forward-looking approach to applied intelligence will help accelerate innovation, deepen investment insights, and deliver long-term value for our members.”

Wu joins from Macquarie Asset Management, where she was global head of engineering. Her previous roles include divisional chief information officer at Edward Jones and global chief information officer at Brown Brothers Harriman. She also served as an adjunct professor at New York University.

Wu earned a master of science degree and a Ph.D. in computer science with a focus on artificial intelligence from Rutgers University; a master of engineering degree in computer engineering from Zhejiang University in China; and a bachelor of engineering degree in computer engineering from Northeastern University, also in China.

OTPP manages C$279.4 billion ($204.29) billion in assets for 346,000 beneficiaries who are working and retired educators from the province of Ontario.

Last week, Ontario Teachers’ announced the appointment of Feifei Wu as Senior Managing Director, Investment Technology & Applied Intelligence:

TORONTO, May 4th, 2026 – Ontario Teachers’ Pension Plan Board (“Ontario Teachers’”) today announced the appointment of Feifei Wu as Senior Managing Director, Investment Technology & Applied Intelligence, effective immediately.  In this newly established role, Ms. Wu will partner closely with investment leaders to ensure technology enables key business outcomes, while leading Ontario Teachers’ AI strategy to strengthen governance, accelerate adoption, and unlock new opportunities. She will report to Chief Technology Officer Terry Hickey.

Ms. Wu has over 25 years of global experience at leading investment and wealth management firms, with deep expertise in technology, artificial intelligence, machine learning, and cloud transformation.

“I am pleased to welcome Feifei to Ontario Teachers’ in this important role at a pivotal time in our technology journey,” said Mr. Hickey. “She brings a strong combination of technical expertise and proven leadership across global financial institutions. Her experience building high-performing technology teams and her forward-looking approach to applied intelligence will help accelerate innovation, deepen investment insights, and deliver long-term value for our members.”

Ms. Wu joins Ontario Teachers’ from Macquarie Group in New York, where she most recently served as Managing Director, Global Head of Engineering of Macquarie Asset Management. Previously, she held senior leadership roles including General Partner, Digital & Technology at Edward Jones, Global Chief Information Officer at Brown Brothers Harriman, and Managing Director at RBC Capital Markets and BNY.

She has an MS and PhD in Computer Science (with a focus on artificial intelligence and machine learning) from Rutgers University, in addition to an ME in Computer Engineering from Zhejiang University and a BE in Computer Engineering from Northeastern University in China.

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.

 So what is this all about and why is it a big deal?

Two reasons. If OTPP and other large pension funds want to better understand the risks and opportunities of AI, they need experts who can help them better understand the AI landscape to figure this out.

The second reason, and it's equally important, OTPP wants to improve its total portfolio approach and AI will be help them standardize data, improve decision-making and be better prepared to pounce on market opportunities across the spectrum.

In short, Ms. Wu will be working with investment heads to understand their approach and needs and see how she can leverage AI at an organizational level to produce better outcomes over the long run. 

For OTPP to go ahead and attract Ms. Wu to their organization, it means they are getting serious about AI on a much deeper level.

In fact, on LinkedIn yesterday, PSP Investments' former CIO  and founder of Brave Foresight, Eduard van Gelderen, posted this:

Matt Toledo ( https://www.ai-cio.com/ ) reported: 'Ontario Teachers’ Pension Appoints Intelligence Strategy Head. Feifei Wu will serve in the newly established role of senior managing director for investment technology and applied intelligence.

When I interviewed the C-suite of the larger Canadian pension plans 18 months ago as part of my PhD research, it was clear that an 'AI Northstar' was not in place. Yes, experiments to come to productivity gains were initiated, but there was no clear AI vision. I am delighted that since then some of the funds have taken serious steps to figure out what a system solution (in contrast to a point solution) could look like. Congratulations to Terry Hickey and OTPP's C-suite for taking the lead. 

Indeed, congratulations to Terry Hickey, OTPP's CTO, for taking the lead here.  

There is actually a lot of work ahead; people mistakenly think that because they use AI in their daily activities, it's easy to implement it properly in a pension fund.

Like all other quantitative initiatives, I can tell you that if you do it properly, it will add value but if you don't, it's garbage in, garbage out.

Below, Feifei Wu, former Managing Director & Technology Head at Macquarie Group, shares how modern enterprises are building end-to-end AI architecture to support business-wide use cases (March, 2026).

From trading and research to operations and fund management, the foundation starts with strong data and memory layers enabling not just storage, but reasoning and inference. On top of that sits an orchestration layer, where agents, workflows, and AI applications are built and deployed.

With advancements in cloud platforms, vector search, and agent frameworks, what once took over a year to build can now be done in days or weeks. Integration, APIs, and MLOps capabilities ensure these systems are scalable, monitored, and production-ready.

Key takeaway: Modern AI architecture is about connecting data, models, and workflows, enabling faster, scalable, and enterprise-wide impact.

Smart lady, she obviously knows what she's talking about and will be an invaluable resource at OTPP. 

Monte Stewart of Connect Canada CRE reports Kingsett, UPP Partnering on Canadian Industrial RE Investments:

KingSett Capital and University Pension Plan Ontario are partnering to invest in income-generating industrial real estate assets in major Canadian urban markets, the institutional investors announced.

The partnership will focus on acquiring multi-tenant, light-industrial buildings in supply-constrained markets, with an emphasis on assets where active management can support long-term value creation. The partners said Canada’s industrial sector continues to benefit from evolving supply chains, population growth and limited availability, supporting demand and rental growth in key markets.

The initiative marks the first partnership of its kind for KingSett and expands UPP’s exposure to industrial real estate as the pension plan seeks to diversify its holdings and increase allocations to income-generating assets.

“We are thrilled to partner with KingSett to establish a dedicated Canadian industrial strategy aligned with our goal of building a resilient real estate portfolio focused on value creation over the long term,” said Peter Martin Larsen, senior managing director and head of private markets at UPP.

“This investment is designed to provide exposure to industrial assets, such as warehousing and light manufacturing facilities in close proximity to urban centres, underpinned by strong domestic demand and attractive inflation protection,” said Peter Martin Larsen, senior managing director and head of private markets at UPP.

“Through this partnership, we are selectively deepening our position in a sector supported by strong fundamentals, enhancing our ability to deliver secure, stable pensions for our members. KingSett brings deep expertise across market cycles, a long-standing presence in Canada’s major industrial hubs, and a proven track record of creating value through active asset management.”

KingSett said its industrial real estate transaction volume has exceeded $13 billion over the past 24 years, giving the firm insight into asset performance and trends across the sector.

“We are delighted to begin a long-term strategic partnership with UPP and grateful for their support,” said Rob Kumer, CEO of KingSett Capital.

“The Canadian industrial sector is at an inflection point: Investors, developers and tenants are adjusting to an evolving trade relationship with the U.S., new supply chains, and the need to improve efficiencies to remain competitive in this environment,” said Rob Kumer, Kingsett’s CEO.

“KingSett is well-positioned to leverage our relationships, scale and platform to navigate this environment and build a portfolio of industrial properties designed to deliver sustainable premium risk-weighted returns for UPP.”

Kumer said the partnership complements KingSett’s existing fund strategies and represents “an important milestone” for the company.

“We are introducing a highly customized investment solution that is designed to meet the specific needs and objectives of an institutional investor like UPP,” he said. “We are aiming to expand on this type of program as an important differentiator for our investor-partners and as a driver of growth for KingSett in the years to come.”

Kingsett and UPP have yet to announce announced any acquisitions under the new partnership. 

Last week, UPP announced it and KingSett Capital have formed a strategic partnership to invest in Canadian industrial real estate:

New partnership focused on the acquisition and active management of light industrial assets in Canada’s major urban markets.

KingSett Capital (“KingSett”) and University Pension Plan Ontario (“UPP”) today announced a strategic partnership to invest in income-generating industrial real estate assets across Canada’s major urban markets. The partnership will focus on acquiring multi-tenant, light industrial buildings in supply-constrained markets, taking a selective approach to assets where active management can enhance long-term value creation.

Canada’s industrial sector continues to benefit from structural tailwinds, including evolving supply chains, population growth, and limited availability. These factors support resilient demand and rental growth across key markets. Industrial assets also play a critical role in enabling efficient distribution and logistics networks across Canada.

This partnership is the first of its kind for KingSett and builds on UPP’s targeted exposure to industrial real estate, further diversifying its portfolio while increasing allocation to income-generating assets. As UPP continues to evolve its real estate portfolio, it remains focused on investments that enhance diversification, manage risk, and deliver durable returns to support the delivery of pensions over the long term.

“We are thrilled to partner with KingSett to establish a dedicated Canadian industrial strategy aligned with our goal of building a resilient real estate portfolio focused on value creation over the long term,” said Peter Martin Larsen, Senior Managing Director, Head of Private Markets at UPP. “This investment is designed to provide exposure to industrial assets, such as warehousing and light manufacturing facilities in close proximity to urban centres, underpinned by strong domestic demand and attractive inflation protection. Through this partnership, we are selectively deepening our position in a sector supported by strong fundamentals, enhancing our ability to deliver secure, stable pensions for our members. KingSett brings deep expertise across market cycles, a long-standing presence in Canada’s major industrial hubs, and a proven track record of creating value through active asset management.”

Over the past 24 years, KingSett’s total transaction volume involving industrial assets exceeds $13 billion. By acquiring and owning individual properties over this period, KingSett has gained direct and specific insight into asset performance and evolving trends in industrial real estate.

“We are delighted to begin a long-term strategic partnership with UPP and grateful for their support,” said Rob Kumer, CEO of KingSett Capital. “The Canadian industrial sector is at an inflection point: Investors, developers and tenants are adjusting to an evolving trade relationship with the US, new supply chains, and the need to improve efficiencies to remain competitive in this environment. KingSett is well positioned to leverage our relationships, scale and platform to navigate this environment and build a portfolio of industrial properties designed to deliver sustainable premium risk-weighted returns for UPP.” 

“This partnership, which complements the balance of our existing fund strategies, marks an important milestone for KingSett. We are introducing a highly customized investment solution that is designed to meet the specific needs and objectives of an institutional investor like UPP. We are aiming to expand on this type of program as an important differentiator for our investor-partners and as a driver of growth for KingSett in the years to come,” added Mr. Kumer.

About UPP 

University Pension Plan Ontario (“UPP”) is a jointly sponsored defined benefit pension open to all Ontario university sector employers and employees. UPP manages $12.8 billion in pension assets as of December 31, 2024 and proudly serves over 46,000 members across six universities and 21 sector organizations. The plan invests to deliver secure, stable pension benefits for members today and for generations to come. For more information, please visit myupp.ca and follow UPP on LinkedIn.

For more information, please contact:

Kelly Conlon
Managing Director, Strategic Communications and External Relations
media@universitypensionplan.ca

About KingSett Capital

KingSett Capital (“KingSett”) is Canada’s leading private equity real estate investment firm with over $19 billion of assets under management. Founded in 2002, KingSett creates value through a broad portfolio of custom real estate investments, financing solutions and asset classes backed by strong core values, an entrepreneurial approach and a Canada-first platform. Today, the firm has over 170 employees in Toronto, Montreal and Vancouver. 

This is another great strategic partnership for UPP, partnering up with KingSett Capital, Canada's leading private equity real estate firm, with over $19B AUM, $55B transactions to date and more than $27B loan commitments to date.

UPP and KingSett are establishing a dedicated Canadian industrial strategy to take advantage of favourable trends in this evolving sector.

This partnership builds on UPP’s targeted exposure to industrial real estate, further diversifying its portfolio while increasing allocation to income-generating / inflation-sensitive assets.   

To my surprise, this partnership is the first of its kind for KingSett Capital, and that shows me how smart UPP is to engage in such a partnership with a top real estate firm right in its own backyard.

[Note: Photo above is KingSett CEO Rob Kumer with Jon Love, Executive Chair & Founder, taken from here when Kumer was appointed CEO]. 

UPP manages $12.8 billion in pension assets as of December 31, 2024 so it's the perfect size to engage with partners like KingSett to initiate a strategic partnership of this kind.

Why not just invest in KingSett's funds? The biggest reason is to mitigate fee drag, co-invest alongside KingSett in this partnership, have them operate and add value to assets, and scale up their industrial platform in Canada. 

There are other advantages. Responsible investing is part of UPP's core values and you can bet they will engage with KingSettt on this front. 

From my vantage point, UPP is taking the right approach, identifying best-in-class partners all over the world and partnering up with them to reduce fee drag and scale up their operations in private markets.

You need a dedicated legal, finance and investment staff to perform due diligence and monitor the partnership but the approach allows you to diversify globally and also domestically. 

And for its part, KingSett gets a great institutional partner with steady long-term streams of capital, so they can grow together and form other partnerships in warranted. 

Alright, going to wrap it up there but suffice it to say, I like this deal and trust this will be a long and fruitful partnership for UPP and KingSett. 

Below, Bodhi's Founder and CEO, Ranjan Bhaduri, is joined by Aaron Bennett, Chief Investment Officer of UPP. Alongside discussing fiduciary duty, inflation risk, and responsible investing, Aaron shares stories of how the organization built its culture remotely and constructed the blueprint for a durable portfolio designed to support members for decades to come. Great discussion, listen to Aaron's insights.

Next, in this episode of Real Estate Development Insights, Payam Noursalehi interviews Jeff Thomas, Group Head of Development at KingSett Capital, who explains how the Canadian private equity firm invests in Canadian commercial real estate through development, joint ventures, and lending. 

He describes transitioning from brokerage (co-founding and selling Ashler Urban to Cushman & Wakefield) to development, emphasizing that long-term relationships, trust, transparency, and early delivery of bad news are critical to managing risk across KingSett’s roughly 55 projects with a small internal team. 

Thomas discusses “premium risk-weighted returns” as achieving strong returns relative to managed, less volatile risk. He details Toronto’s 50 Wilson Heights affordable-housing project (about 750 units in phase one, half affordable) on a prepaid ground lease, involving over 50 initial agreements, CMHC financing, and geothermal sustainability, and notes construction is in early structural work. He says Toronto condos are “dead” due to a large gap between resale and new-launch pricing, with development charges and HST seen as key barriers. 

He advises smaller builders to get close to customers and highlights modular/precast delivery at West Square as a path to speed, standardization, and affordability, while wishing policymakers would truly prioritize housing.

Lastly, Dennis Mitchell, CEO and CIO of Starlight Capital, joins BNN Bloomberg to discuss the recent acquisition deal between KingSett and Choice to acquire First Capital. Smart man, he covers a lot here including industrials.

Samantha Subin of CNBC reports Wall Street sees ‘changing of the guard in AI’ as Intel, AMD shares soar while Nvidia lags: 

Since the launch of ChatGPT in late 2022 and the start of the generative AI craze, one name has dominated the infrastructure boom: Nvidia.

While the chipmaker — and the world’s most valuable company — continues to prosper and is expected to show revenue growth of 70% this fiscal year, Wall Street has moved elsewhere, piling into businesses that were hardly visible in the initial years of the artificial intelligence buildout.

This week offered the starkest illustration yet of what Mizuho analyst Jordan Klein said could be a “changing of the guard in AI.” Chipmakers Advanced Micro Devices and Intel notched gains of about 25%, while memory maker Micron jumped more than 37% and fiber-optic cable maker Corning climbed about 18%.

All four of those companies have more than doubled in value this year, with Intel leading the way, up well over 200%. Nvidia, meanwhile, is only slightly ahead of the Nasdaq in 2026, gaining 15% for the year, aided by an 8% rally this week.

In spreading the wealth to a wider swath of hardware companies, investors are clearly betting that the bull market in AI has long legs and that data centers are going to need a wider array of advanced components for years to come. Memory has been the biggest theme of late due to a global shortage that’s driven up prices and turned Micron, a 47-year-old company tucked in a sleepy corner of the semiconductor market, into one of the hottest trades over the past 12 months.

Micron blew past an $800 billion market capitalization for the first time this week, and the stock is now up over 750% in the past year. CEO Sanjay Mehrotra told CNBC in March that key customers are only getting “50% to two-thirds of their requirements” because of supply issues. 

The memory market is largely dominated by Micron, along with Korea-based Samsung and SK Hynix, which are also both in the midst of historic rallies.

“That is what happens when a market quickly enters a material shortage condition and pricing surges higher” while expenses “rise only modestly,” Mizuho’s Klein wrote in a note to clients early in the week. “You make a lot of money being overweight historic memory upturns when new capacity cannot be added fast enough. That simple.”

Agents drive ‘tremendous demand’

Beyond memory is insatiable demand for central processing units (CPUs), which underpin everyday computers and smartphones. They had mostly become an afterthought as model developers like OpenAI and Anthropic and cloud giants Google, Microsoft and Amazon were gobbling up Nvidia’s GPUs.

Now CPUs are back in the spotlight as momentum shifts from chatbots to AI agents. Bank of America estimates the data center CPU market could more than double from $27 billion in 2025 to $60 billion in 2030.

AMD’s quarterly results this week underscored the emerging trend, as earnings, revenue and guidance sailed past estimates on strong data center growth. The company has long led the CPU charge, and CEO Lisa Su said on the earnings call that AMD now expects 35% growth over the next three to five years in the server CPU market, up from a forecast of 18% growth that the company provided in November.

“Agents are really driving tremendous demand in the overall AI adoption cycle, and we’re very excited to be in the middle of it,” Su told CNBC’s “Squawk on the Street” on Wednesday, following the company’s earnings report.

Analysts at Goldman Sachs and Bernstein upgraded the stock to buy ratings, citing CPU tailwinds. And JPMorgan Chase analysts said the report “crystallizes the structural inflection underway across both server CPU and [datacenter] accelerator growth trajectories.”

Intel, which for many years towered over AMD in the CPU market before missing out on numerous major transitions, most notably AI, is in the midst of a revival sparked by a major investment from the U.S. government last year.

Intel’s stock had its best month on record in April, more than doubling, and has continued notching massive gains, rising 33% in the early days of May. The shares surged 13% on Tuesday following a Bloomberg report that Apple is in talks with Intel and Samsung to produce the main processors for its U.S. devices. They climbed another 14% on Friday after the Wall Street Journal reported that Intel and Apple have come to an agreement for the chipmaker to manufacture some processors for Apple devices.

Representatives from Intel and Apple declined to comment.

Elsewhere in the new AI stack, some companies are directly benefiting from partnerships with Nvidia.

Glass maker Corning, which celebrated its 175th anniversary this week, signed a massive deal with Nvidia on Wednesday that involves the development of three new U.S. factories dedicated entirely to optical technologies for the chip giant.

The deal gives Nvidia the right to invest up to $3.2 billion in Corning, and is likely a major step in Nvidia’s move away from copper cables and towards fiber-optic cables as it builds out its rack-scale systems. Earlier this year, Corning inked a $6 billion deal with Meta through 2030 to provide fiber-optic cables in the social media company’s AI data centers. 

“We’re going to scale up optical at a scale that, quite frankly, no optical companies have ever enjoyed,” Nvidia CEO Jensen Huang told CNBC’s Jim Cramer on Thursday. He said the economy is going through the “single largest infrastructure buildout in human history.” 

Corning’s recent boom on Wall Street pushed its stock to a record in February, when it finally passed its prior high from the dot-com era in 2000. It’s continued to soar in the months since.

Analysts are seeing plenty of other comparisons to the internet boom of the late 1990s, which preceded an extended market bust.

Jonathan Krinksy, an analyst at BTIG, said in a recent note that the magnitude of the markup in the semiconductor space resembles 1999. He warned of a 25% to 30% correction for the PHLX Semiconductor Index, a significant benchmark for the sector, which is up 66% so far this year.

“We have written ad nauseam about how extreme the move in semis has been — in many cases not seen since the dot-com bubble,” he said. “In some ways, however, this move is actually more extreme.”

Last week, I discussed how stocks knocked it out of the park in April, led by red-hot chip stocks.

This week, semis are melting up again led by Micron, AMD, Intel and Qualcomm:

The melt-up in some chip stocks is staggering, even more so than 1999-2000.

They're way overbought but continue to melt up in a parabolic fashion.

For example, Micron shares are up 38% this week, 84% over the past month and 777% over the past year.

So what? Sandisk shares are up 4,162% over the past year, trouncing every other stock. 

 Gamma hedging and one-day options are undoubtedly fuelling these explosive moves but it's more than this; clearly, CTAs/ large quant funds are running the show, increasing their positions in chip stocks with every new high.  

How much higher can chip stocks fly? Nobody has a clue but Sandisk's 4,000%+ return over this past year after it IPOed sends a chill down the spine of short sellers.

Things are way overheated but this May melt-up can continue. 

Still, semis are due for a pause and pullback so chase them at your own risk here.

Below, the CNBC Investment Committee debate whether AI stocks can carry the market and how you should position your portfolio in this environment.

And Paul Tudor Jones, Tudor Investment Corporation founder and CIO and Robin Hood Foundation founder and board member, joins 'Squawk Box' to discuss the promise and perils of AI, future of AI regulation, state of the AI boom, latest market trends, the Fed's interest rate outlook, NY's wealth tax proposal, and more.

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 115,000 jobs added in April. Read the full thread here. 

Today’s jobs report came in stronger than expected as payrolls increased by 115,000 in April. As a result, average monthly growth the last three months was 48,000 jobs. The unemployment rate held steady as both labor force participation and the employment level dropped slightly.
#NumbersDay #EconSKy

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:37 AM

Overall job gains were 115k in April. Job gains were strongest in health care. transportation and warehousing, and retail trade. Losses continue in information, financial activities, and the federal government.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:50 AM

The federal workforce continues to suffer down another 9,000 jobs in April. Federal employment has shrunk an alarming 345k jobs since Jan 2025. The vital services federal employees provide cannot be done without these essential workers.

Note: Federal employees on furlough are counted as employed.

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:56 AM

After finally seeing some reversal of grave losses in recent months, manufacturing employment ticked down again in April. Since January 2025 when Trump took office, the manufacturing sector has lost 77,000 jobs.

#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:59 AM

Nominal wage growth continued to slow in April. Over the last three months, wages have growth only 2.8% (annualized). The one-month change was even slower (1.9%).

As inflation rises, real wages fall as workers and their families find it increasingly difficult to make ends meet.
#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:12 AM

Overall unemployment masks important differences by race and ethnicity. The Black unemployment rate ticked up slightly to 7.3% in April. Even given volatility due to smaller sample sizes, it’s clear that the Black unemployment rate remains elevated, particularly much higher than any other group.

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:33 AM

With a depressed hires rate, I’ve been concerned about young people having opportunities to break into the labor market. The unemployment rate of young workers—16-24 years old—ticked up again in April, once again hitting 9.5%
#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:37 AM

Bill Curry and James Bradsaw of the Globe and Mail report pension funds should invest more in Canada, Senate finance committee chair says:

The federal government should force the investment arms of the Canada Pension Plan and public-sector pensions to invest additional funds in this country rather than launching a sovereign wealth fund, says the Conservative chair of the Senate finance committee.

In an interview with The Globe and Mail Wednesday, Senator Claude Carignan said the model – known as a dual mandate – has worked well in Quebec with the Caisse de dépôt et placement du Québec.

“My position is that I think that the pension funds need to invest more in Canada,” the Quebec-based senator said.

While the federal government has frequently said it wants to help create conditions that encourage such funds to invest more domestically, Mr. Carignan said urging voluntary action hasn’t worked and legislative changes should be considered. 

“We could change their mandate and put a note that they have to invest more in the Canadian economy, like we have with Caisse de dépôt,” he said. “The other pension plans don’t have this objective, but I think that they have to be more involved in our economies.”

Mr. Carignan said a dual mandate would eliminate the need for the $25-billion Canada Strong Fund that Prime Minister Mark Carney announced last month tied to the government’s spring economic update.

The Conservative senator said he was expressing a personal view and acknowledged his comments place him at odds with his own party.

The CPP is jointly managed by Ottawa and the provinces, except Quebec. Changing the CPP investment rules would require the support of Ottawa and at least two-thirds of participating provinces, representing two-thirds of the population of those provinces.

The Public Sector Pension Investment Board (PSP Investments) invest funds for the pension plans of the public service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force.

The CPPIB and PSP Investments have virtually identical mandates to invest assets with a view to achieving maximum rates of returns without undue risk. Neither fund is subject to minimum amounts with respect to domestic investments.

The CPPIB held net assets worth $780.7-billion as of Dec. 31, 2025, while PSP Investments held $299.7-billion as of March 31, 2025.

Under pressure to put more money to work in Canada, the chief executives of Canada’s largest pension funds have argued that the plans have thrived on an independent governance model that keeps them free from political meddling.

Some pension-sector experts have suggested that the dual mandate that governs the Caisse has been a drag on its returns over the past decade. But comparisons with peers are hard to make given the different mix of clients the funds serve.

Provincial law in Quebec requires the Caisse to pursue “optimal returns” for its six million depositors “while contributing to Quebec’s economic development.” The fund now manages $517-billion in assets, and its former CEO, Michael Sabia, is Clerk of the Privy Council in Mr. Carney’s government. Its Quebec investments include infrastructure projects such as Montreal’s REM light-rail line.

Conservative MPs stressed the need for CPP independence in an exchange last month with Canada Pension Plan Investment Board senior managing director Michel Leduc.

During a recent finance committee meeting in the House of Commons, Conservative MP Pat Kelly criticized calls for the CPP to have a domestic investment mandate.

“We hear voices, from time to time, saying things like, ‘Why doesn’t the CPPIB invest in Canada?’ ‘Shouldn’t they invest more in Canada?’ or more chillingly: ‘Should they be compelled to invest more in Canada?’ ” he said, before asking Mr. Leduc to comment on the importance of the fund’s independence.

Mr. Leduc responded by saying that the CPPIB does invest considerably in Canada, which he pegged at more than $115-billion.

“The point about independence is critical on multiple fronts, including our ability to access global markets,” he said. “If we were seen to have different non-commercial objectives – perhaps national-interest objectives – it would make our life a lot more difficult regarding accessing prized assets around the world.”

Mr. Leduc told The Globe Wednesday that the CPPIB is one of the best performing pension funds in the world and Canada should not be adding barriers.

“We have heard many voices about this in recent years and while everyone is entitled to their opinions, that respectfully doesn’t extend to their own facts,” he said.

In April, Ontario Municipal Employees Retirement System was the first major Canadian pension fund to set a target to boost its exposure to Canada. CEO Blake Hutcheson said OMERS plans to add at least $10-billion of new investment in Canada over five years, which would increase the part of its portfolio in Canadian assets to 25 per cent from 18 per cent.

John Fragos, a spokesperson for Finance Minister François-Philippe Champagne, said the OMERS move shows the government’s “carrot” approach is working.

“We don’t need a stick,” he said. 

Alright, let me cover this since it's starting to really irritate me how many articles are coming out stating an opinion that Canada's large pension funds should invest more in Canada, and adopt a dual mandate like La Caisse.

With all due respect to Senator Claude Carignan (featured above), he doesn't know what he's talking about and I suspect I know who put him up to this (two fellas in Montreal).

Canada's large pension funds already invest billions in Canada across public and private assets and if the Carney Liberals start privatizing airports and other assets, they'll invest more.

They don't need or want a dual mandate, they want to have the freedom to invest in the best assets that meet their long-dated liabilities. 

We don't need to transform our pension funds into sovereign wealth funds and we don't need politicians telling our pension funds where to invest.

I have a serious problem with all these articles, people need to remind politicians that pension fund assets don't come from taxes, they come from members who contribute a percentage of their earnings.

The minute politicians insert themselves into the equation, it's game over, our pension funds will not be managed in an optimal sense.

Alright, not going to expand on this topic, if there are opportunities to invest in infrastructure assets in Canada, great, if not, leave our pension funds alone.

Below, Prime Minister Mark Carney has called Canada's pension funds "among the world's largest and most sophisticated investors." How large are they? By the end of 2024, they managed assets totalling nearly two and a half trillion dollars. 

But a lot of that money isn't being invested in Canada. As the government tries to boost the economy through nation-building projects, should Canadian pension funds be investing more right here at home? And what could we do to make that happen? 

TVO today discusses with Matthew Mendelsohn, the CEO of Social Capital Partners; and Keith Ambachtsheer, the co-founder of KPA Advisory Services and director emeritus of the International Centre for Pension Management at the University of Toronto.

Key takeaways:

• The unemployment rates for young college graduates and young noncollege workers have risen slightly faster than the overall unemployment rate.
• But the rise in young college graduate unemployment in particular was mostly due to higher labor force participation: The employment-to-population ratio for young college graduates has held steady since 2024.
• Certain demographic groups, such as Black and Hispanic workers, face higher unemployment and lower hourly wages, even for young people with limited work experience.
• In the long run, the college degree is losing its edge: Unemployment for young college graduates has risen in historical terms, and the college wage premium has been flat or falling in recent years.

Over the last couple of years, the overall labor market has slowly weakened—with many arguing that the weakening is most pronounced for young college graduates (whom we define as young workers ages 22–27 with only a college degree).1 The evidence is actually pretty mixed—by some measures the young college graduate labor market is notably weaker, but their outcomes are largely no worse than those of noncollege young people or the labor market writ large.

In this first blog post of our series on young college graduates, we examine the labor market the college graduates of the Class of 2026 are entering. We look at unemployment rates and employment-to-population (EPOP) ratios for young workers with and without a college degree and examine wages for young college graduates by demographic characteristics. We also explore longer-term trends in unemployment driven by rising educational attainment, as well as changes in the college wage premium—the pay advantage college graduates earn over their high school graduate peers. In the next post, we will analyze trends in the industries and occupations young college graduates tend to work in, and take a closer look at the tech sector and any fingerprints of AI on labor market outcomes.

Unemployment on the rise for young college graduates—but mostly because of higher labor force participation

Over the last couple of years, the labor market has shown some signs of weakening, though some often reported measures are overstating it. For example, payroll employment growth has slowed significantly, but this is largely driven by much slower population growth over the past year and a half as net immigration has collapsed. The unemployment rate has slowly increased, though the share of the prime-age population—those 25 to 54 years old—with a job has remained high. Of most concern is the hires rate—the number of hires as a share of total employment—which has been steadily falling over the last three years. The hires rate is now at the same levels seen in 2013 and 2014, a period during the prolonged recovery from the Great Recession that saw unemployment rates 3.0 percentage points higher than they are today. Focusing just on unemployment rates, the softening of the overall labor market appears to be hitting young college graduates more acutely.

Figure A shows the overall unemployment rate, as well as the unemployment rate for young college graduates and young workers without a four-year college degree. Since 2023, the overall unemployment rate has risen from 3.6% to 4.3%, a slow and measured increase of 0.7 percentage points. The unemployment rate for young college graduates has increased from a low of 4.0% in July 2023 to its recent high of 5.3% in March 2026, a faster increase of 1.3 percentage points. Young workers without a college degree also experienced a rise in unemployment, though their rise began a little later than the other groups. Their unemployment rate has risen by 1.2 percentage points since March 2024, up from 5.9% to 7.1% by March 2026.

Figure A

Some have pointed to this disproportionate rise in young college graduates’ unemployment rates as evidence that AI is beginning to substitute for the white-collar jobs young graduates typically enter. But this conclusion is premature for several reasons. First, while the rise in the unemployment rate in the most recent period is faster for college graduates than for all workers, the same is true for other young workers without a college degree (see Figure A). This suggests that there isn’t anything particularly damaging to young college graduates happening today, such as AI specifically destroying their labor market prospects.

Further, the increase in the unemployment rate for young college graduates over the last two years appears to be driven by an increase in labor force participation rather than a declining probability of having a job. The EPOP for young college grads has held steady over the last two years as the unemployment rate rose. Nearly all (98%) of the increase in the unemployment rate between 2024 and 2026 for young college graduates was driven by the increase in the labor force—meaning more young workers are entering the labor market in search of opportunities as opposed to giving up and leaving the labor force or never entering it at all. This would actually fit a historic pattern in which labor force participation rates tend to respond with a surprisingly long lag to labor market developments. The historically strong labor markets of the early 2020s likely are still pushing up the labor force participation rates of young college graduates today.

When we look at EPOPs since 2019, shown in Figure B, we see that young workers, college and noncollege alike, fall in line with the overall trend. Not surprisingly, given the industries and occupations hit the hardest, young noncollege workers fared the worst in the pandemic recession, but now are faring similarly to their college-educated counterparts. Prime-age EPOPs have remained the most resilient through this business cycle.

Figure B

Data from the Job Openings and Labor Turnover Survey provide useful insights into job openings, hires, quits, layoffs, and other separations, but they are not broken down by demographic, limiting our ability to analyze young workers. However, the depressed hires rate suggests that it is more difficult for new entrants to get a foothold in the labor market. The quits rate is down, signaling a reduction in the overall churn in the labor market as workers and employers sit tight through this period of economic uncertainty—likely related to chaotic policy decisions and implementation around tariffs, deportations, and the conflict with Iran. If the layoffs rate ticks up now, the unemployment rate is likely to spike quickly and could spell even more trouble for young people who tend to experience larger swings in unemployment with the business cycle.

Finally, there is no evidence that young college graduates are sheltering in school—i.e., going on to graduate school—to weather out the weakened labor market. In fact, enrollment rates among young college graduates have been falling slightly over the last couple of years, from 19.1% in 2024 and 18.8% in 2025 to 18.5% in 2026. Even though opportunities in the labor market are weaker, it’s perhaps not surprising that enrollment rates are on the decline. The Trump administration’s attacks on higher education have reduced available funding at colleges and the ending of student loan forgiveness and caps on borrowing make it increasingly difficult for students to make those educational investments.

Wages remain unequal across demographic groups

Real (inflation-adjusted) median wages of young college graduates rose slightly over the last year, up just 0.4% since 2025, consistent with the slowdown in wage growth for workers overall. Since 2019, young college graduate wages have grown 7.4% after adjusting for inflation.

Despite this positive wage growth, racial and gender wage gaps remain large even among young college graduates who are just starting their careers. Figure C shows that women are paid $4.18 less per hour than their male counterparts. At 85.9% of men’s pay, a young woman working full time with a college degree is paid $8,700 less over the year.

Young Asian American Pacific Islander (AAPI) college graduates are paid more than white, Hispanic, or Black workers. The demographic categories shown in Figure C are mutually exclusive: AAPI, white, and Black workers are non-Hispanic, while Hispanic workers can be of any race. Young white college graduates are paid $2.76 per hour less than their AAPI counterparts, while Black and Hispanic workers are paid $5.36 and $5.05 less, respectively. For a full-time worker, this translates into more than $10,000 in lower earnings over the year for Black and Hispanic workers. Not only are wages lower for these historically disadvantaged groups, but the unemployment rates of young Black college grads in particular are also higher. Therefore, their ability to secure employment at all—at any wage—is diminished.

Figure C Young college grads are competing against a wider labor force that is more educated 

As educational attainment has risen across the broader workforce, the advantage that young college graduates once enjoyed relative to the rest of the labor force in terms of lower unemployment and higher wages has steadily declined.

The young college graduate unemployment rate recently surpassed the overall unemployment rate, meaning a greater share of young college graduates are now out of work than workers writ large. The erosion of the unemployment advantage for young college grads, however, isn’t a sudden shift; as shown in Figure A, the trend has been building since 1979, when young college graduates had an unemployment rate of 4.0%, 1.9 percentage points below the national average. Over the following four decades, that advantage eroded. By February 2020, young college graduates had an unemployment rate of 3.8%, 0.2 percentage points above the overall rate, a slow but complete reversal of the historic edge. In recent years, the historic trend has continued—now the young college graduate unemployment rate is a full 1.0 percentage point above the overall. And the young college graduate unemployment rate is at historically high absolute levels today, currently sitting higher than it was during the worst of the 1990 and 2001 recessions.

The shift is not explained by young college graduates faring worse relative to their noncollege peers, as that gap has held relatively stable at around 2.0 percentage points. Instead, as the educational attainment of the overall workforce increased, young college graduates became less advantaged compared to the overall labor force. Further, as a greater share of young adults now attend college and are likely from a wider range of socioeconomic backgrounds, a college degree for somebody in their early 20s today is likely a less reliable marker of general economic privilege than it used to be.

Figure D displays educational attainment over time for young workers and all workers. From 1980 to 2026, the share of the workforce with a bachelor’s degree increased from 12.5% to 26.1%, more than doubling as a share of total employment. The overall level of college attainment for young adults rose from 18.0% in 1979 to 31.6% in 2026. If we include those with bachelor’s and/or an advanced degree in the overall workforce, the increase in educational attainment is even more stark, rising from 18.4% to 41.9%.

Figure D

The democratization of college degrees carries some clear upsides for productivity and the overall health of the U.S. economy. A more diverse set of people have accessed higher education and benefited from the advantages of being a degree holder in recent decades. This rise in college attainment has obviously not been costless, as many of these degrees could only be obtained by taking on large amounts of student debt, which may well provide some constraints on labor market opportunities and options for young adults.

Young college graduates used to be more male, white, and likely to come from higher-income families—all characteristics rewarded (fairly or not) in labor markets. This growing diversity of college graduates may well mean that young grads are less likely to exit (or not enter) the labor force when job prospects are bad. In prior decades, it is possible that young college graduates were more likely to have resources to fall back on during periods of unemployment, and they clearly had less student loan debt. Now, with fewer fallback options and greater debt levels, the cost of being jobless may weigh more heavily on this group, leading people to continue actively searching for work instead of staying out of the labor force even when jobs are scarce, driving the unemployment rate higher.

The long-term rise in educational attainment may also have helped squeeze the wage advantage college graduates hold over those with just a high school degree. Some of the same reasons discussed above—the college-educated population becoming more economically diverse and more workers attaining advanced degrees—may also have eroded the measured earnings edge that once came with just a bachelor’s degree.

A useful way to measure this is the college wage premium. The college wage premium is the percentage boost in wages associated with holding a college degree, after controlling for demographic factors like race, gender, age, and geography. As Figure E shows, this premium peaked around 2015 and has declined slowly since. Today, the overall college wage premium stands at 55.2%, roughly where it was in the late 1990s. For younger workers ages 22–27, the premium is slightly lower, but follows the same pattern, also peaking around 2015 before flattening or trending downward.

Figure E

The labor market is weakening and young workers’ prospects seem worse-off than they did just a couple of years ago. But young college graduates are facing a weakened labor market only slightly worse than that experienced by other workers. Their unemployment rate has risen faster, though similarly to noncollege young workers, while their employment-to-population ratio has remained generally strong. A depressed hires rate may make it even harder for these young workers to get a foothold in the labor market. Much of these short-term trends of higher and rising unemployment are the continuation of a decades-long trend of worsening outcomes as the overall population increases their educational attainment.

1. Throughout this brief, we define young college graduates as people between the ages of 22 and 27 with only a college degree. Unlike similar analyses of young workers, We do not exclude young college graduates that are currently enrolled in school, but the results here are robust either way. Unless otherwise noted, data for 2026 represent a 12-month average from April 2025 through March 2026 for the most up to date and reliable estimates, which removes seasonality and increases sample sizes. Analysis for smaller demographic groups uses a 36-month average to improve reliability.