Bringing externally managed funds under the guidance of the internal investment team is a key component of OMERS’ growth plans, with the fund moving to having more direct control over its investments, according to new chief investment officer, Michael Latimer.
Latimer, who took over the position from Michael Nobrega who remains as chief executive in January, said OMERS was looking to grow, by broadening its investment exposure and by increasing OMERS capital, and moving towards having more direct control over investments.
“This is why we’re bringing our externally managed funds under the guidance of our investment team – managing our money with our people,” he said.
“This not only saves management fees, it also enables us to apply our proven expertise more broadly.
“Our business is becoming more outward-looking and, as we broaden our exposure, we continue to grow our talent pool. After all, you can only be successful if you attract and retain the best people.”
Bringing more assets in-house is one of four main components of the fund’s five-year strategy introduced in 2008 which also includes increasing the size of the plan, managing the investments of other domestic and international funds, and establishing investment alliances with third-party investors.
Latimer was previously chief executive of OMERS’ real estate arm, Oxford Properties, and Blake Hutcheson has been appointed to take on that role.
Oxford Properties is one of OMERS’ five investment entities. The others are: OMERS Capital Markets, OMERS Private Equity, Borealis Infrastructure and OMERS Strategic Investments.
For the year to the end of 2009, OMERS Capital Markets returned 11 per cent, OMERS Private Equity returned 13.9 per cent, Borealis Infrastructure returned 10.0 per cent, Oxford Properties returned 1.3 per cent and OMERS Strategic Investments returned -1.2 per cent.
“OMERS has an ambitious and exciting plan to expand its global footprint and its capital infusions, which I very much want to be part of. This is an exciting time to be with OMERS,” he said.
He said the importance of the fund’s real estate and infrastructure holdings became apparent during the crisis as they continued to grow as public equities fell.
“We went into the events of 2008 in a strong position. While OMERS was affected by the downturn, as were many others, we weathered the storm better than most, which confirmed our investment strategy.”
For the year to the end of 2009, the total fund returned 10.6 per cent which compares with a negative 15.3 per cent total rate of return in 2008. The average rate of return for the past five years is 6.6 per cent, above the five-year average benchmark return of 5.8 per cent.
