Healthcare of Ontario Pension Plan, Toronto, on Thursday announced it returned a net 10.88% on its investments in 2017, with the plan's assets reaching C$77.8 billion ($62 billion) as of Dec. 31.
HOOPP's funding ratio remained at 122%, the same as the previous two years. The 2017 return edged out the previous year's return of 10.35% and also exceeded the 2017 custom benchmark return of 7.89%.
Plan assets were up 10.5% from the end of 2016. Investment income for 2017 totaled C$7.6 billion, up 15.2% from C$6.6 billion in 2016.
"We did well right across the board," said Jim Keohane, HOOPP's president and CEO, in an interview. "Probably the standout area was private equity where we had about a 19% return, but public equities did well last year. Even areas of fixed income had a positive return last year."
The majority of HOOPP's investment income in 2017 came from its return-seeking portfolio, which accounted for 52% of overall investment income, vs. 62% in 2016. In 2017, private equity and public equity, which make up the portfolio, returned 19.6% and 14.8%, respectively.
HOOPP's liability hedge portfolio — nominal bonds, real estate and real-return bonds — provided 48% of the pension fund's investment income compared to 38% in 2016. Real estate returned 11.9%, while nominal bonds returned 10.5% and real-return bonds' returns were flat.
For the 10 and 20 years ended Dec. 31, the pension fund returned an annualized net 9.55% and 9.01%, respectively. Mr. Keohane said the portfolio's structure to minimize "catastrophic risk" has contributed to its success in long-term returns.
An asset allocation as of Dec. 31 was not provided.