8.4% infra return for OTPP

Ontario Teachers’ Pension Plan said its infrastructure portfolio beat its benchmark in 2012.

Infrastructure outperformed for Ontario Teachers’ Pension Plan (OTTP) in 2012, returning 8.4 percent to best its 8 percent benchmark index, OTTP said in its annual report.

The pension administrator—a direct investor in infrastructure—noted its infrastructure portfolio totaled C$9.6 billion ($9.48 billion; €7.37 billion), compared to C$8.7 billion in 2012.

For OTTP, the return on infrastructure was telling: in 2012, the public pension outperformed across-the-board. 

Teachers’ gained 13 percent overall, compared to its 11 percent target. Equity and fixed income likewise beat expectation, with equity returning 14.2 percent against a 13.1 benchmark, and fixed income claiming a 5.1 percent return set against its 4.5 percent goal.  

Infrastructure, meanwhile, is slotted into a ‘real asset’ portfolio—a bucket OTPP claimed last year gained 14.6 percent versus its benchmark of 10.6 percent.

On a four-year basis, the Plan said, infrastructure posted a 6.6 percent annualised return versus a four-year benchmark of 5.3 percent

OTTP included its 50-year concession of the Sydney Desalination Plant (SDP) as a ‘notable’ transaction for 2012. The Plan, together with Hastings Fund Management, paid A$2.3 billion (€1.8 billion; $2.3 billion) last May for the SDP.

Ending 2012, OTTP has C$129.5 billion under management, up from C$117 billion a year ago.

Meanwhile, Jim Leech, chief executive for Teachers’ has announced he will step down at the end of 2013. A search for a successor has begun.

Leech joined OTPP in 2001 to head private equity, becoming chief executive in 2007. His announcement marked the latest high-level departure for the Plan: Stephen Dowd, senior vice president, infrastructure, left OTPP in March.