Investment Management Corp. of Ontario has begun operations with about C$50 billion ($38.4 billion) in assets and a mandate to manage money for small provincial pension funds and universities.
IMCO received the go-ahead when bills to establish the corporation were consolidated and approved by the Ontario Legislature on July 1, according to the province’s legislative website.
The new corporation will be seeded by the C$26 billion Workplace Safety and Insurance Board, Toronto, Ontario’s workers compensation program; and the Ontario Pension Board, which manages assets of the C$23 billion Public Service Pension Plan, Toronto. IMCO will manage the two plans’ assets.
The province’s largest plans — including the C$171.4 billion Ontario Teachers' Pension Plan, C$77 billion Ontario Municipal Employees’ Retirement System, C$63.9 billion Healthcare of Ontario Pension Plan and C$18.4 billion Ontario Public Service Employees Union Pension Plan, all of Toronto — will not be involved and would continue to operate separately.
Even without the large plans’ involvement, sources have said IMCO’s assets eventually could top C$100 billion, rivaling the largest provincial money management corporations in Canada, like the C$123 billion British Columbia Investment Management Corp., Victoria, and $90.3 billion Alberta Investment Management Corp., Edmonton.
IMCO will operate as a member-based non-profit corporation and will not use taxpayer money, the finance ministry said.
IMCO will target the assets of assets of about 70 midsize and smaller public pension funds and university endowments and foundations in Ontario, according to a news release on the website of Charles Sousa, Ontario finance minister. The new corporation will reduce money management costs for participating agencies by pooling their assets and lower administrative costs, which will help improve the pension funds’ returns on investments, the finance ministry news release said.
While plan participation is voluntary, sources have said the shift of assets to IMCO could take away provincial institutional money now run by money managers and consultants through their Canadian investment outsourcing businesses.