CANADA - The Ontario Teachers' Pension Plan (OTPP) and the Ontario Municipal Employees' Retirement System (OMERS) posted significant losses through 2008, the schemes' annual reports reveal.
The fund said C$19.5bn of losses had been held back as part of the smoothing adjustment and would be recognized over the next four years.
In individual asset classes, public and private equities declined from C$50bn at the end of 2007 to C$34.9bn at the end of 2008, representing a fall of-23.2%, while fixed income lost C$6.7bn.
OTPP said it had adopted a more conservative fixed income asset strategy as a result.
OTPP chief investment officer and executive vice president Neil Petroff commented: "Although we know we can't stop market downturns, we make every attempt to insulate the fund from these shocks when they do occur. Our investment strategy remains defensive, but flexible enough to take advantage of market opportunities as they arise."
OMERS President and chief executive Michael Nobrega said 2008 was "a difficult year" but reiterated plans to rebalance the portfolio and invite other funds to invest alongside the scheme.
The rebalancing plans which will see the C$44.8bn fund shift further into private or unlisted assets. At present, the scheme has a 57.5% allocation to public assets and 39.8% allocation to private assets, including real estate and infrastructure.
Nobrega said the scheme planned to further rebalance this mix to 57.5% public and 42.5% unlisted. Yesterday, OMERS announced a deal with Canadian Pacific Railway to take a majority stake in the Detroit River Tunnel (Globalpensions.com; 2 April 2009).
He added "The kind of dominant assets we are seeking provide long-term steady returns and are well-matched to the liabilities of a pension plan, but tend to be accessible only to the very large capital pools."
As Global Pensions has previously reported, OMERS' assets declined to C$44.8bn at the end of 2008, down from C$52.2bn in 2007. This was equivalent to a 15.3% fall over the year, and was higher than the -13.2% benchmark OMERS compared itself to (Globalpensions.com; 24 February 2009).
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