Ontario Municipal Employees returns 10.03% for year, topping its benchmark

Ontario Municipal Employees Retirement System, Toronto, returned 10.03% for the year ended Dec. 31, outperforming its custom benchmark return by 28 basis points, according to a news release from the pension fund.

Assets increased by C$5.7 billion (US$5.6 billion) to C$60.8 billion during the year.

OMERS' private markets portfolio returned 13.8% for the year — private equity, 19.17%; real estate, 16.9%; infrastructure, 12.7%; and strategic investments, -10.1%.

The capital markets portfolio, made up of public equity, fixed income and debt investments, returned 7.5%.

According to the news release, the strategic investments portfolio comprises assets in Alberta's oil and gas sector; oil and gas prices fell to their lowest levels in five years in 2012, according to the release.

OMERS ended the year with 60% of its assets in public markets and 40% in private markets. The long-term goal is 53% and 47%, respectively. The year also ended with the pension fund managing 88% of the total portfolio in-house, up from 74% five years earlier. The long-term goal is 95% internally managed.

The unfunded liability at the end of the year was C$10 billion, resulting in an 85.9% funded status.

For the five years ended Dec. 31, OMERS returned an annualized 3.56%, underperforming the benchmark of 4.08%. Ten-year returns were an annualized 8.24%, topping the benchmark of 7.73%.