Taking over as CEO of one of Canada's largest pension funds was never going to be easy. Doing so in the midst of a global pandemic — and also at an earlier date than expected — is an entirely different thing.
When the coronavirus pandemic hit early this year, Blake Hutcheson, incoming CEO at the C$109 billion ($83.9 billion) Ontario Municipal Employees Retirement System, Toronto, was invited to "come for the ride" alongside outgoing CEO Michael Latimer.
Although he did not officially replace Mr. Latimer until June 1, Mr. Hutcheson — at the time president and chief pension officer, accepted.
Mr. Latimer, a good friend and supporter of Mr. Hutcheson over the years, "was a great running mate and was a wise counsel to me during (that) period of time," Mr. Hutcheson said.
As with any person in a position of leadership, it's been a long year, he said. But his biggest takeaway from the trials of 2020, from a macro, high-level point of view, "is how impressive the central banks have been around the world. We do have a front-row seat."
Leaders of Canadian plans and banks had a good relationship with the governor of the Bank of Canada at the time — Stephen S. Poloz — who "made himself available at a moment's notice," Mr. Hutcheson said.
The coordination between the central banks and their counterparts across the globe was impressive, Mr. Hutcheson added, while the feeling that central banks would do "whatever it takes … was just incredibly impressive to me and it actually took the temperature down," he said.
At a micro level, Mr. Hutcheson's 3,200 staff of "very committed people" demonstrated an "all-hands-on-deck attitude."
The most difficult part of dealing with the pandemic has been operating with the responsibility of what Mr. Hutcheson calls double vision. "On one hand, (you) have to focus on the here and now. On the other hand, you have to be very sober about the operational challenges and the human challenges, and the dual responsibility of keeping your people … productive, getting their jobs done individually and collectively, and looking after their well-being."
Mr. Hutcheson is working to keep his "eyes on that horizon — for a plan that's been here for 58 years, this is a moment in time," and he believes there is a light at the end of the COVID-19-related tunnel.
While Mr. Hutcheson declined to comment on specific transactions made by OMERS at the height of the market volatility related to the pandemic, he said the first priority was liquidity — with the Canadian dollar dropping 12% and global markets plummeting 35% by late March, "we were all hands on deck" to ensure executives knew how much elbow room there was if things fell even further.
"From my perspective, that was a big decision and so we went out and raised about C$4 billion in medium-term notes in multiple currencies around the world so we would have money available to cover our hedges or to make investments." That exercise probably took six weeks.
OMERS executives are now seeing three opportunity sets: the first is where certain industries and businesses are benefiting from trends that have accelerated in the pandemic environment — like industrial real estate. The second is those companies that may look weakened in the current situation but that executives believe will rebound over the medium to long term and are attractive now at current pricing levels, while the third are industries, companies and sectors that the firm is now avoiding as they have been devastated by the outbreak.