Ontario Teachers’ Pension Plan, Toronto, returned 11.8% on its investments in 2014, above its custom benchmark’s 10.1% return, powered by private equity and infrastructure performance.
The pension fund’s assets rose to C$154.4 billion ($122.7 billion) as of Dec. 31, up from C$140.8 billion a year earlier, Ron Mock, president and CEO, said in a news conference Tuesday.
OTPP’s funded status as of Jan. 1 was 104%, up one percentage point from the start of 2014.
For 2014, Teachers’ Private Capital, the pension fund’s private equity unit, returned 22% vs. its custom benchmark’s 16.3% return, while infrastructure returned 10.5% vs. 5.9% for its custom benchmark. OTPP’s private equity investments totaled C$21 billion, while C$12.6 billion was in infrastructure.
OTPP’s C$65.6 billion fixed-income portfolio returned 12% vs. its custom benchmark’s 11.9% return; its C$47.9 billion in public equity returned 13.4%, matching its custom benchmark; and its C$22.1 billion in real estate assets, run by its Cadillac Fairview unit, returned 11.1% vs. 7.3% for the custom benchmark.
Natural resources investments, which totaled C$11.9 billion, was the only general asset class to report a loss in 2014, at -19.4%, though he return was above its custom benchmark’s -19.8% return. Neil Petroff, OTPP’s executive vice president and chief investment officer, said the loss was the result of the overall drop in commodity values over the past year.
Mr. Mock said he and Mr. Petroff, who on Monday announced his retirement from OTPP effective June 1, had been working on the pension plan’s future investment strategy for the past five months but said no decision had been made about making any asset allocation shifts.
“We’re looking at the organization and the capabilities we’ll need to have five to 10 years from now,” Mr. Mock said. “We need to look at our foundation and adapt. There are no (asset allocation) changes for the time being. This is something we review on an ongoing basis. It’s always under review.”