OMERS reports gains for the first half of 2023

Ontario Municipal Employees Retirement System (OMERS) has reported a positive net investment return of 3.1% for the first half of 2023, resulting in total net assets of $127.4 billion by June 30. 

In a period of 12 months ended June 30, the net investment return has been 7.8% or a gain of $9.2 billion. 

“We have had a good start to the year,” said Blake Hutcheson, President and CEO of OMERS.  

“As a pension plan that pays benefits over generations, we are a long-term investor and over the last 10 years OMERS has earned an average net return of 7.8%, adding more than $68 billion to the Plan.” 

OMERS’ assets were largely in the US (47%) and Canada (24%). Other assets include across the Asia-Pacific (11%) and Europe and the UK (9% and 7%, respectively). Public equities largely make up the assets, followed by infrastructure, credit, and private equity. 

In the statement, OMERS said public equities delivered strong returns, having returned a net 5.9% due to its core holdings in high-quality, large-cap stocks in the financial, communication, technology, and consumer discretionary sectors. At the same time, rising interest rates continued to boost returns from bond and credit investments. 

“Rising interest rates are creating opportunities for OMERS in fixed income that we have not seen in many years,” said Hutcheson. “We are selectively targeting these opportunities while actively managing our existing portfolio and patiently waiting for the right time to deploy our ample liquidity into growth opportunities.” 

The pension fund also noted private equity assets have also driven positive returns as “operational improvements, and tuck-under acquisitions increased portfolio company earnings”.  

Among the key investments made in 2023 include funding for the following: 

• Redevelopment of Victoria House, an art deco office building in Central London, into a life sciences hub that will also be the new home of the BioIndustry Association, the trade association for UK life sciences 

• Purchase and long-term lease back of a 120,000 square foot biomanufacturing facility in Boston 

• Acquisition and completion of a 95,000 square foot North Carolina biomanufacturing facility  

• Sale of a newly constructed 140,000 square foot biomanufacturing facility in Boston 

• Significant capital commitment to Beanfield Technologies Inc, a 100% fiber infrastructure network servicing the enterprise, commercial, and residential sectors, primarily in Toronto, Vancouver and Montreal 

• Acquisition of Kenter, a Dutch energy infrastructure solutions business that provides medium-voltage infrastructure, including transformers and switchgear, and meters to over 25,000 commercial and industrial business customers in the Netherlands and Belgium 

• Acquisition of The Rimrock Resort Hotel, a luxury resort hotel in Banff, Alberta