Ontario Municipal Employees' Retirement System, Toronto, returned a net 4.2% in 2022, below its benchmark return of 7.2%.
Net assets totaled $124.2 billion as of Dec. 31, up from $120.7 billion as of year-end 2021, said a news release Monday.
Over the three-, five- and 10-year periods ended Dec. 31, the pension fund returned an annualized net 5.4%, 6.1% and 7.5%, respectively, vs. their respective benchmark returns of 6.9%, 7.1% and 7.4%, according to OMERS' annual report.
In 2021, OMERS returned a net 15.7%.
By asset class, the top performers in the portfolio were private equity (13.7%, vs. 25.8% in 2021); real estate (13.6%, vs. 15.9%); infrastructure (12.5%, vs. 10.7%) and credit (3.4%, vs. 5.8%).
The poorest-performing asset classes were public equities, which returned a net -11.9% in 2022, vs. a net return of 20.7% in the prior year; and bonds, which returned a net -3.8%, vs. a net return of 1.3% in 2021.
OMERS described 2022 as an "exceptionally challenging year for investors," in the release.
Blake Hutcheson, president and CEO, said in the news release that OMERS was able to deliver positive returns due to its investment strategy that "emphasizes high-quality assets, diversification, active management and a disciplined, long-term perspective."
Jonathan Simmons, chief financial and strategy officer, added in the release that "our significant allocations to private investments and focus on short-term credit over long-term bonds protected OMERS from the worst period of market losses incurred by investors since the 2008 global financial crisis."
As of Dec. 31, 2022 OMERS' asset allocation was 23.5% public equity (down from 29.4% as of year-end 2021); 20.8% infrastructure (vs. 20.8%); 20.6% credit (19.8%); 18.4% private equity (14.9%); 16.8% real estate (16.2%); 7.9% bonds (6.3%); and cash and funding accounted -8% (-7.4%).
In an interview, Mr. Hutcheson said OMERS has been a front-runner in private investments and that the firm is "very comfortable" with the current range of its exposure to private markets in the portfolio.