CANADA - The CAN$35.7bn Ontario Municipal Employees Retirement System (OMERS) posted a return of 12.1% in 2004 on the back of strong performances by its private and global equity market investments.
The fund earned net investment income of CAN$3.7bn, compared with CAN$3.5bn in 2003 and assets grew by CAN$3.6bn, an increase of 11%, to total CAN$35.7bn at year-end.
“A significant increase in the returns of our private market investments combined with the continued strength of global equity markets contributed to our strong performance,” said OMERS president and CEO Paul Haggis.
“We are beginning to realise the benefits of our new investment strategy and we are well positioned to improve returns for our members over the long term.”
OMERS’ goal is to invest 40% of the pension fund in private market assets such as real estate, infrastructure and private equity. The fund expects these assets will outperform traditional stocks and bonds over the long term.
The best returns over 2004 came from infrastructure (31%), private equity (12.5%) and real estate (11%) while public markets – including real return bonds, Canadian public equities and non-Canadian public equities – posted an overall return of 10.3%.
In 2004, OMERS announced a new investment strategy under which it now has four investment operating groups that focus on specific areas with specialised expertise – public markets, private equity, infrastructure and real estate.
The fund said infrastructure has an “unusually strong year” in 2004 with a return of 31% resulting from higher earnings and favourable market value adjustments on several investments.
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