OMERS pins 2007 success on alternatives

The Ontario Municipal Employees Retirement System has attributed strong 2007 returns to its alternatives allocation, including private equity, real estate and infrastructure.

The C$51.5 billion (US$52.5; €35 billion) Ontario Municipal Employees Retirement System attributed 2007 top-quartile returns to alternative investments, achieved despite volatile public markets.
“OMERS’ strong 2007 returns were due to the successful execution of our active management investment strategy, anchored by strong returns realized by the three private market lines of business – real estate, infrastructure and private equity,” OMERS Administration Corporation board of directors chair John Sabo in a statement.
In 2007, OMERS changed its long-term asset mix targets, raising private investments to 42.5 percent from 37.5 percent and decreasing public market investments to 57.5 percent from 62.5 percent.
Private equity investments, managed by OMERS Capital Partners, generated net income of C$500 million in 2007 as compared to C$300 million in 2006. Total assets allocated to private equity rose to C$3.6 billion from C$3 billion in 2007. Private equity investments now account for 7.4 percent of total assets under management with a long term allocation goal of 10 percent.
OMERS Capital currently has relationships with more than 40 external fund managers and has 20 direct investments, largely in North America. Returns from both direct investments and managed fund holdings were strong.
OMERS overall returned 8.7 percent in 2007, exceeding its benchmark of 5.6 percent. Net assets grew from C$47.6 billion to C$51.5 billion. Net investment income declined from C$6.5 billion in 2006 to C$3.9 billion in 2007 due to the decreased performance of public markets investments.
OMERS Pension Division serves the needs of approximately 380,000 members represented by more than 40 umbrella groups on behalf of over 900 local government employers.