Ontario Teachers’ delivers positive return in first half of 2024
- Net assets at $255.8 billion.
- Six- and 12-month total-fund net returns of 4.2%.
- Strong long-term returns of 7.3% over ten years and 9.3% since inception.
- Fully funded for the 11th straight year and plan sponsors have announced they will file a valuation with the regulatory authorities.
- Appointed a number of senior leaders to best position the plan for the future.
TORONTO (August 13, 2024) -- Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced a total-fund six-month net return of 4.2%, or net investment income of $10.8 billion. The one-year total-fund net return was also 4.2%. Net assets are $255.8 billion, up $8.3 billion from year-end (all figures are as at June 30, 2024, and in Canadian dollars, unless noted).
"Our results for the first half of 2024 reflect an ability to generate positive returns in a range of market conditions across our investment teams, and maintain a well-funded status for our members,” said Jo Taylor, President and Chief Executive Officer.
Given the plan’s liabilities stretch decades into the future, results over longer periods are particularly important. Ontario Teachers’ had an annualized total-fund net return of 9.3% since inception in 1990. The five- and 10-year annualized net returns were 6.7% and 7.3%, respectively.
The table below summarizes Ontario Teachers' portfolio mix by asset class for the current period and previous year-end.
Detailed Asset Mix
| As at June 30, 2024 | As at Dec. 31, 2023 | |||
|---|---|---|---|---|
| Asset Class | $ billions | % | $ billions | % |
| Equity | ||||
| Public equity | 37.2 | 15% | 25.4 | 10% |
| Private equity | 58.5 | 23% | 58.5 | 24% |
| Venture Growth | 8.1 | 3% | 7.5 | 3% |
| 103.8 | 41% | 91.4 | 37% | |
| Fixed income | ||||
| Bonds | 85.2 | 33% | 85.9 | 35% |
| Real-rate products | 9.7 | 4% | 9.9 | 4% |
| 94.9 | 37% | 95.8 | 39% | |
| Inflation sensitive | ||||
| Commodities | 29.1 | 11% | 22.2 | 9% |
| Natural resources | 12.2 | 5% | 11.4 | 5% |
| Inflation hedge | 12.2 | 5% | 11.8 | 5% |
| 53.5 | 21% | 45.4 | 19% | |
| Real assets | ||||
| Real estate | 30.0 | 12% | 28.2 | 12% |
| Infrastructure | 41.7 | 16% | 39.2 | 16% |
| 71.7 | 28% | 67.4 | 28% | |
| Credit | 34.8 | 14% | 38.6 | 16% |
| Absolute Return Strategies | 20.5 | 8% | 19.5 | 8% |
| Funding and other1 | (125.4) | (49%) | (114.2) | (47%) |
| Net investments2 | 253.8 | 100% | 243.9 | 100% |
[1] Includes funding for investments (term debt, bond repurchase agreements, implied funding from derivatives, unsecured funding, and liquidity reserves) and overlay strategies that manage the foreign exchange risk for the total fund.
[2] Comprises investments less investment-related liabilities. Total net assets of $255.8 billion as at June 30, 2024 (As at December 31, 2023 – $247.5 billion) include net investments and other net assets and liabilities of $2.0 billion as at June 30, 2024 (As at December 31, 2023 – $3.6 billion).
Funding Status
As of January 1, 2024, the plan was fully funded with a $19.1 billion preliminary funding surplus, underscoring its long-term financial health and sustainability. On July 23, 2024, the plan’s sponsors, the Ontario Teachers’ Federation and the Government of Ontario publicly announced that the funding valuation will be filed with the regulatory authorities. The co-sponsors elected to classify the surplus as a contingency reserve.
Corporate News
- Announced retirement of Tracy Abel, Chief Operating Officer, effective as of the end of 2024.
- Appointed new leaders including:
- Mabel Wong, as Chief Financial Officer, announced today. Ms. Wong has served as Acting Chief Financial Officer since April, following the departure of Tim Deacon from the organization.
- Bernard Grzinic appointed as Executive Managing Director, Capital Markets, where he will guide Ontario Teachers’ active risk taking in credit and absolute return strategy asset classes.
- Steve Saldanha named Executive Managing Director, Total Fund Management, responsible for shaping overall asset mix, managing trading activities, and integrating portfolio construction with treasury and funding capabilities.
- Robert Sturgeon promoted to Senior Managing Director, Global Investment Strategy, tasked with assessing the global business environment, developing strategic responses to emerging global themes, and fostering strategic relationships for Ontario Teachers’.
Transactions Highlights
Ontario Teachers’ manages approximately 80% of assets internally, with a focus on deploying capital into active strategies. During the first half of 2024, the fund continued to diversify investments in Canada and globally.
Investment highlights from the period include:
Equities
- Fairstone Bank of Canada, a portfolio company of Ontario Teachers’, and Home Trust Company will be merging their businesses to create the leading alternative lender in Canada, boasting an extensive Canadian footprint servicing more than two million customers with more than 250 branches from coast to coast.
- Acquired a significant minority stake in Kogta Financial (India) Limited, a fast-growing retail focused non-banking financial company specializing in the secured vehicle and MSME (Micro, Small and Medium Enterprises) financing space in India.
- Successfully closed the sale of Shearer’s Foods, a leading contract manufacturer and private label supplier serving the snack industry in North America, and the partial sale of SeaCube Container Leasing Ltd., one of the world's largest operating lessors of intermodal containers.
Infrastructure & Natural Resources
- Completed a third investment in National Highways Infra Trust (NHIT). NHIT is an Infrastructure Investment Trust (InvIT) sponsored by the National Highways Authority of India, the Government of India’s nodal agency for national highway development.
- Co-sponsored an InvIT with the Mahindra Group called Sustainable Energy Infra Trust (SEIT). SEIT is India’s largest InvIT in the renewable energy space and is listed on the National Stock Exchange of India.
Real Estate
- Alongside its Boreal IM joint venture, completed one investment in a logistics property in Germany, encompassing 37,000 sqm, and signed four logistics investments across Germany and France, totaling nearly 200,000 sqm. Additionally, completed the construction of a logistics asset in Spain, covering 54,000 sqm, and commenced construction on a logistics asset in Germany, spanning 23,000 sqm.
Teachers’ Venture Growth
- Co-led a fundraising round of SmartHR, a leading cloud-native human resources management platform in Japan.
- Participated in an investment in DeepL, a leading language AI company, whose platform provides category-leading AI-powered translation and writing solutions for businesses globally.
- Invested in Perfios, India's leading B2B SaaS company serving the financial services sector in 15 countries, empowering 900 financial institutions.
- Led the fundraising round of Instagrid, a leading provider of high-performance portable battery systems.
About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $255.8 billion as at June 30, 2024. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 340,000 working members and pensioners.
Our more than 450 investment professionals operate in key financial centres around the world and bring deep expertise in a broad range of sectors and industries. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.3% since the plan's founding in 1990. At Ontario Teachers', we don't just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on LinkedIn.
Media Contact:
Dan Madge
Ontario Teachers' Pension Plan
Phone: +1 416-419-1437
Email: media@otpp.com
Forward-Looking Statements
This news release contains forward-looking information and statements that are intended to enhance the reader’s ability to assess the future financial and business performance of Ontario Teachers’. Forward-looking information and statements include all information and statements regarding Ontario Teachers’ current beliefs, targets, intentions, plans, and expectations concerning its objectives, future performance, strategies, and financial results, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “trend,” “potential,” “opportunity,” “believe,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions. Because the forward-looking information and statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond Ontario Teachers’ control or are subject to change, actual results or events could be materially different. Although Ontario Teachers’ believes that the estimates and assumptions inherent in the forward-looking information and statements are reasonable, such information and statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such information or statements due to the inherent uncertainty therein. Ontario Teachers’ forward-looking information and statements speak only as of the date of this report or as of the date they are made and should be regarded solely as Ontario Teachers’ current plans, estimates and beliefs. Ontario Teachers’ does not intend or undertake to publicly update such statements to reflect new information, future events, and changes in circumstances or for any other reason.