Canada’s OTPP seeks to double APAC assets

20 May 2014   Category: News, Asia, Global, Hong Kong   By Daniel Shane

The Ontario Teachers’ Pension Plan (OTPP), the Canadian pension fund with C$140.8 billion (US$129.72 billion) in AUM, will seek to almost double its assets in Asia-Pacific to C$20 billion in the next three years, according to its president and chief executive officer.

Speaking to the South China Morning Post, Ron Mock said that the OTPP, whose members include 307,000 active and retired teachers, had hired seven private equity firms in the region since launching its Hong Kong office last year. Among those seven, it has allocated between US$100 million and US$600 million each, Mr. Mock said.

Mr. Mock explained that the OTPP was more interested in hiring fund managers with specialist knowledge of individual countries in the region, rather than those that offered a pan-Asia strategy.

"We think it is most important to find deals where we have deep partnerships with the governments and investment professionals with deep local knowledge," he told the newspaper. "We believe those relationships will translate into investment opportunities and better pricing, which is our edge when investing for the long term."

OTPP’s investments in the region include a US$2.3 billion co-investment with Hastings Funds Management in a desalination plant in New South Wales, and HK$1.3 billion (US$168 million) in investments in Macau casino and hotel firm Louis XIII.

It also has stakes in Hong Kong jewellery giant Chow Tai Fook and Jingdong Mall, a mainland Chinese ecommerce firm which will shortly IPO.

Mr. Mock told the newspaper that OTPP currently employs about ten people at its Hong Kong office, its second overseas location after London, although is looking to double its number of staff in the SAR.

According to a fact sheet on the OTPP’s website, the pension fund returned 10.9% in 2013, with an average annual performance of 10.2% since its inception in 1990.

As of December 31 last year, the fund allocates C$61.9 billion of its portfolio to equities, C$56.9 billion to fixed-income products, and sizeable amounts to real assets, commodities and absolute return strategies.