North America: Infra investment returns rebound for OMERS

23 February 2018 - 12:00 am UTC

 

The Ontario Municipal Employees Retirement System’s (OMERS) infrastructure asset class rebounded in 2017, but still has yet to match its peak 2015 performance, according to a 23 February press release.

The pension fund generated a 12.3% net return in 2017, compared to 2016 where it bore a 10.3% return following a 17.3% return in 2015, a 7.0% negative difference. The entire pension system achieved a net investment return of 11.5%, compared to a benchmark of 7.3%, and a net return of 10.3% in 2016. 

The news follows the institutional investors’ recent decision to increase its stake in the UK-based Thames Water company by 4%, aggregating to a total of 32%, as previously reported. OMERS moved ahead with the investment despite the regulator’s December 2017 announcement whereby it forecasted much lower returns for UK water companies. 

Infrastructure investments make up 16% of OMERS’ portfolio, a decline of 1% from the previous year. 

In 2017 OMERS made its first direct investment in Latin America, with the acquisition of a 34.6% stake in the Chilean-based GNL Quintero – LNG Terminal for USD 341m from Enagás. Previous to that the institutional investor made five direct investments in infrastructure projects spanning Australia, Finland, Spain, the UK, and the United States, according to data collected by Inframation Deals

The pension’s total portfolio generated almost CAD 10bn of investment income, whilst its net assets grew to approximately CAD 95bn and its funded status improved to 94%, according to the release. 

OMERS recently hired Michael Ryder as Senior Managing Director in its New York office. Ryder will be responsible for leading the Americas strategy in the OMERS Infrastructure Management vehicle through which the pension fund invests.

OMERS did not return calls seeking comment.

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