The Ontario Municipal Employees Retirement System has continued a strategic shift toward making its own direct investments in private equity holdings by selling a large portfolio of investments in various private equity investment funds.
The major Canadian pension fund announced Tuesday its OMERS Private Equity Inc. division has sold a portfolio of 11 private equity fund investments to AXA Private Equity for $850-million (U.S.).
The sale price also includes related unfunded commitments that OMERS has with the private equity funds, which are predominantly North American and global funds.
OMERS Private Equity chief executive officer Paul Renaud said the sale is part of a broader strategy to invest directly in private assets rather than through investment funds.
“This transaction is consistent with OMERS strategic shift towards direct investing,” he said.
OMERS Private Equity has concluded a string of deals to directly purchase private companies over the past year, including the U.S. chain of Great Expressions dental centres, Canadian injection moulding company Husky International Ltd., U.S. golf retailer Golfsmith International Holdings Inc., and U.K.-based V. Group Ltd., which handles ship management and crews for owners of large sea vessels.
The fund argues direct investments give it more control over its assets than investments through third-party private equity funds, and keep investment costs lower.
AXA said in a release it purchased the investments as part of a strategy it has implemented to make purchases from large institutions “looking to monetize their private equity investments.”
Last June, AXA bought $1.7-billion of private equity assets from Citigroup and a further $740-million from Barclays under the same program. AXA is a world leader in private equity investing with a portfolio of $28-billion in assets.