Infrastructure a boon for Ontario pension

OPTrust said its infrastructure portfolio gained 23.7% in 2012.

A 23.7 percent return on investment (ROI) cast infrastructure in the coveted role of top-performing portfolio for OPSEU Pension Trust (OPTrust) in 2012.

OPTrust, administrator to the Ontario Public Service Employee Union Pension Plan, reported infrastructure accounted for 15 percent of its C$14.7 billion ($14.6 billion; €11.2 billion) under management.

The pension fund administrator set a 7.4 percent benchmark index for infrastructure based in part on the Consumer Price Index (CPI).

The asset class has proven itself to be a staunch outperformer for the Trust: in 2011, infrastructure posted a 29.6 percent gain. Beginning in 2006, when OPTrust initiated its infrastructure portfolio, the asset class has earned a 19.2 percent internal rate of return (IRR).

The Trust entered the asset class when former Macquarie Group executive Kevin Warn-Schindel arrived with a mandate to build a private capital arm.

Warn-Schindel, erstwhile vice president with Macquarie North America in Toronto, said infrastructure has “delivered a risk adjusted return” for OPTrust.

Joining Warn-Schindel in running the infrastructure portfolio is investment manager Stan Kolnec and managing director Graham Ingram. Both Kolnec and Ingram also worked for Macquarie.

OPTrust is a direct investor in infrastructure, owning marine terminal operator Oceanex and investing in surface transportation concessionaire Global Via Infraestructuras.