Ontario Municipal Employees Retirement System, Toronto, earned 8.7% on investments in 2007, topping its custom benchmark of 5.6%, confirmed spokesman John Pierce. Income from private investments, which includes private equity, real estate and infrastructure, rose 35.3% to C$2.7 billion, while returns from public investment, which includes stocks and bonds, dropped 65.3% to C$1.7billion.
The C$46.9 billion (US$49.3 billion) system last year adjusted its allocation targets to 57.5% public investments and 42.5% private investments. Mr. Pierce said the adjustment was made to gain exposure to the more stable returns of private investments. Since 2003, OMERS has increased its allocation to private investments to 29.8% from 17.8% while reducing its public investments to 70.2% from 82.2%.
All private investments outperformed public investments, which returned 2.6% in 2007 but still topped their 1.5% custom benchmark. Real estate returned 22.9%, well ahead of its 7.8% benchmark; private equity earned 18.6%, outpacing its 11.6% custom benchmark; and infrastructure gained 12.4% vs. 9.9% for the custom benchmark.
The system had C$1.9 billion in contributions. The funded status rose to 100% as of Dec. 31, from about 95% a year earlier.