Ontario Municipal Employees Retirement System, Toronto, is forming three geographic-based groups of large pension funds and other institutional investors to invest directly in large infrastructure and real estate investments, according to Philip Haggerty, OMERS vice president of corporate development.
OMERS, with C$47.8 billion (US$47.6 billion) in assets, is finalizing the formation of a strategic alliance group with U.S. institutional investors and is also creating groups with European and Australian institutional investors, Mr. Haggerty said April 28 in a panel discussion at the Milken Institute Global Conference in Beverly Hills, Calif.
The pension plan is creating these strategic alliances as a way to export its in-house investment model.
“It costs 4% to 5% to have someone else manage your money, and it introduces volatility,” Mr. Haggerty said.
Mr. Haggerty said generally the top Canadian pension systems returned an annualized 5.3% over the past 10 years, compared to 3.2% by similar-size U.S. pension plans, partly because Canadian pension plans in general invest more in-house.
However, it took OMERS 15 years to create its in-house investment model, and it would take too long for U.S. institutional investors to move away from hiring outside investment managers, he said.