Ontario Teachers’ Pension Plan, one of the world’s biggest pension funds, plans to hire “extensively” in Asia and Europe over the next two years and could shift an extra $11-billion into infrastructure and other real assets, its chief executive said.
The fund currently employs around 1,200 people across hub offices in Toronto, London and Hong Kong, while a further 1,500 work at real estate subsidiary Cadillac Fairview.
Outgoing CEO Ron Mock said that Teachers’ (OTPP) could triple its current Asia headcount of around 25 people and is considering opening offices in Mumbai and Singapore.
OTPP managed around $191-billion in assets as of the end of 2018 for 327,000 working and retired teachers.
Mr. Mock said China, India, Australia, Vietnam, Indonesia and the Philippines were all areas likely to see further investment.
“We plan on growing our European and Asian operations extensively,” Mr. Mock said.
“Asia represents a growth opportunity over the next 10-15 years … you can’t just set up on a dime and take down on a dime when you’re investing in private assets like private equity and infrastructure.”
Despite political turmoil in Britain as the country inches closer to leaving the European Union, Mr. Mock said London would remain its European base and headcount could rise from around 30 to more than 50 over the next two years.
“London remains, and will remain, our home base for the U.K. and for Europe,” Mr. Mock said.
OTPP said in July that Mr. Mock would be replaced on Jan. 1, 2020, as CEO by Jo Taylor, who has previously led the teams in both Europe and Asia.
Brexit fears have not prompted OTPP to withdraw or postpone investment in Britain, Mr. Mock added.
OTPP is set to release its half-year results on Aug. 21.
While much of its money is spread across a range of public and private assets, Mr. Mock said OTPP was spending a lot of its time sourcing deals in infrastructure and private equity.
Currently, around 17 per cent of OTPP’s assets are invested in Europe, with around 60 per cent of that – some $10-billion – in Britain, largely in private assets including lottery operator Camelot and Bristol airport.
Despite being keen to add to its real asset and private equity holdings in Europe and Britain, strong competition from other institutional investors meant securing the best deals was tough.
“It’s not easy, at this point in time, given pricing, particularly in infrastructure and [a] few other spots,” he said, but overall, the allocation to real assets would go up. At the end of December, OTPP’s allocation to real estate, infrastructure and other “real rate” assets was 25 per cent, or $49.6-billion.
“We are opening up our asset mix to allow it to range from 26 per cent to 32 per cent of the total fund, and so we will be looking at … probably moving up somewhere in the neighbourhood of $11-billion.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.