Ontario Pension Board continues increasing real estate portfolio by 18.1%

Ontario’s public service pension plan ended 2017 with an annual investment return of 10.8%, which helped it maintain its funded status at about 97%.

The Ontario Pension Board (OPB), which administers the plan, said that net investment income during the year amounted to $2.5 billion and net assets grew to $26.4 billion by the end of the year.

The return came as OPB continued a strategy of shifting assets from public to private markets last year.

This included increasing its real estate portfolio by 18.1%, infrastructure portfolio by 15.8%, and private equity portfolio by 53.5%.

Overall, private markets investments consisting of real estate, private equity, and infrastructure returned 4.5%.

Public market investments, which include public market equity, fixed income, and cash, returned 13.3% for the year.

“I am very pleased with our strong performance and investment return in 2017 — the first partial year our portfolio has been managed by the Investment Management Corporation of Ontario (IMCO),” OPB president and CEO Mark Fuller said, as quoted by The Canadian Press.

“We believe that pooling our assets under IMCO’s management will help us earn higher returns going forward than we could on our own.”

The defined-benefit pension plan serves about 44,000 active members and their employers, as well as more than 43,000 retired and former members.