Ontario Municipal Employees' Retirement System, Toronto, returned a net of 2.3% on its investments in 2018, below its custom benchmark's 7.3%, the pension fund said in its annual report Friday.
In 2017, OMERS returned a net 11.5%, the report said.
However, the pension fund did outperform the median return of Canadian pension plans surveyed by RBC Investor & Treasury Services in 2018, which was -0.7%.
Total assets in the fund were C$111.9 billion ($82 billion) as of Dec. 31, up 5.8% from a year earlier. The pension's funding ratio also improved to 96% compared with 94% at the end of 2017.
The highest performing asset class in OMERS' portfolio was private equity in 2018, which returned 13.5%, followed by infrastructure, 10.6%; real estate, 8.7%; and fixed income, 1.8%.
OMERS' public equities portfolio was the worst-performing asset class, returning -8.3%.
OMERS' asset allocation at year-end was 33% public equity, 29% fixed income, 18% each infrastructure and real estate, 15% in private equity, and -13% short-term investments.
As of Dec. 31, 2017, the pension fund's asset allocation was 34% public equity, 29% fixed income, 16% infrastructure, 14% real estate and the remainder in private equity.
The portfolio returned an annualized net 8% for the three years ended Dec. 31, 8.1% for five years, 8% for 10 years and 6.6% for 20 years.
Last month, OMERS Infrastructure Management, a unit of Ontario Municipal Employees, acquired a 22.4% interest in IndInfravit Trust, for a total consideration of 8.7 billion Indian rupees ($160 million), the pension fund announced in a separate news release.
IndInfravit, which invests in India's road infrastructure, holds a portfolio of five operational toll-road concessions in the country.
The deal was OMERS' first infrastructure investment in India, according to the news release.