Real asset investments helped OMERS add $4.9bn (€4.6bn) of investment income in 2022 despite recording losses in public equities and bonds.
As of 31 December 2022, the defined benefit pension plan’s assets stood at $124bn as it recorded an investment return of 4.2%, net of expenses.
Within OMERS’s private investment portfolio, the $26.3bn infrastructure portfolio recorded a 12.5% return during the period compared with 10.7% previously, with real estate recording 13.6% net investment returns in 2022 compared with 15.9% a year earlier. Private equity recorded a 13.7% return compared with 25.8% in 2021.
In 2022, OMERS deployed capital across 11 infrastructure deals, which include investment in renewable energy platform Groendus, the creation of Waveconn through the acquisitions of TPG Telecom’s mobile tower and rooftop portfolio and Stilmark, an independent Australian developer, owner and operator of mobile tower assets.
Real estate investments in 2022 increased to $21.2bn from $19.8bn in 2021 with deals like the acquisition of a portfolio of seven bulk distribution logistics assets in the UK, acquiring a 13-building life science portfolio in San Diego and the acquisition of an office to life science conversion project in London.
Oxford Properties, the real estate arm of OMERS, also continued to make significant progress on more than 70 active development projects representing $2.8bn in committed equity deployment.
Bonds and public equity which make up part of the pension fund’s public investments portfolio recorded returns of -3.8% and -11.9% respectively in 2022 compared with 1.3% and 20.7% in 2021. Credit was 3.4% last year compared with the 5.8% recorded a year earlier.
OMERS attributed the public investments portfolio’s performance to interest rate rises made to combat inflation that resulted from the impact of the war in Ukraine and the lingering effects of the COVID-19 pandemic.
Blake Hutcheson, OMERS president and CEO, said: “Our investment strategy that emphasises high-quality assets, diversification, active management, and a disciplined, long-term perspective, served the Plan and our members well in 2022, producing positive returns in a year where broad market indices and the vast majority of investors experienced losses.
“In a difficult environment, our portfolio and the team behind it have performed very well. We are pleased with this outcome and remain focused on the long term.”
Over 10 years, OMERS has earned an average net return of 7.5%, exceeding its benchmark, and adding $64.4bn to the plan, Hutcheson said.
Jonathan Simmons, OMERS chief financial and strategy officer, said: “Our significant allocations to private investments and focus on short-term credit over long-term bonds protected OMERS from the worst period of market losses incurred by investors since the 2008 global financial crisis.
“At the same time, investing sustainably continues to be a priority and we have successfully lowered the carbon intensity of our portfolio by 32% since 2019, exceeding our 2025 carbon reduction target.”
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