GLOBAL - The CAD$40bn (€30.6bn) Healthcare of Ontario Pension Plan (HOOPP) posted returns of 12.2% at the end of 2011, boosted by its investments in real estate.
According to the pension fund’s 2011 results, real estate investments delivered an overall return of 17.8% for the year, driven by income returns of 6.2% and capital appreciation of 11.7%.
The returns delivered by HOOPP’s real estate investments were on the way up last year compared with 2010, when the fund’s property portfolio delivered a return of 12.3%.
HOOPP chief executive Jim Keohane attributed those results to the liability-driven investing (LDI) strategy implemented by the Canadian pension plan.
“The best returns in 2011 were in long bonds, real return bonds, real estate and private equity,” he said.
“These are all asset classes that are employed heavily in our LDI portfolio.”
During 2011, HOOPP turned its attention to development sites and its non-domestic platform, acquiring industrial sites in Calgary, Alberta and Cambridge, in the Ontario province.
The pension plan then invested in Airport Corporate Centre in Toronto for a mixed office and retail development.
Last year, HOOPP also entered the international real estate market, closing its first deals in the UK and Czech Republic.
HOOPP made its first investment in the Czech Republic with the acquisition of two shopping centres through a joint venture with opportunistic UK property investment firm Meyer Bergman.
One shopping centre is located north of Prague, the other in Ostrava, on the Polish border.
The Ostrava asset is still in development and scheduled to open in March next year.
In the UK, HOOPP made its first direct real estate investment outside Canada by acquiring a 50% stake in the Crown Estate’s St James’s Gateway development in London.
The Canadian pension fund finally made commitments to two European funds - one focused on the Nordic region, the other a French development fund in 2011.