CANADA - The Ontario Municipal Employees Retirement System (OMERS) suffered an overall net loss of $8bn (€6.25bn) in 2008, although its real estate investments performed relatively well despite the financial downturn.
OMERS announced on Monday it generated a -15.3% rate of return on its investments in 2008 compared to an 8% return recorded the previous year, but its property and private market assets, and its limited exposure to high-risk investments like sub-prime mortgages and over-leveraged assets, helped lessen the pension fund's losses.
"OMERS did not escape the downturn, though we believe we fared relatively well as a result of the performance of our fixed income, real estate and infrastructure assets and our decision not to invest in certain high-risk financial products," said Michael Nobrega, president and chief executive officer for OMERS.
The Canadian pension fund's real estate and Infrastructure were the only investments to deliver positive returns of 6% and 11.5% respectively, however these were approximately 2% lower than the benchmark for each asset.
Infrastructure's returns were only slightly down from 2007 returns of 12.7%, but real estate suffered a significant decline from the 22.9% returns recorded the year before.
OMERS adopted an asset mix policy in 2003 and has since reduced its exposure to public market investments from 82.2% to 60.2% and last year accelerated the shift to private market investments.
Patrick Crowley, chief financial officer for OMERS, said: "We're getting a better balance between our public and private investments, and although we have experienced losses in 2008, they were lessened by the shift toward private market assets."
OMERS currently provides retirement benefits to over 390,000 members from the local government sector in Ontario.
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