- OMERS Private Equity reported 18.2 pct return on core ‘directs’ portfolio
- Group has had several liquidity events over past few years
- Two exits drove 2017 performance
OMERS Private Equity finished 2017 with a hefty pay packet, earning a net return of 18.2 percent, much of it owing to sales of a U.K. software business and a Canadian plastics supplier.
Ontario Municipal Employees Retirement System, the C$95 billion pension plan for Ontario municipal workers, in February reported that all PE investments, combining OPE’s portfolio, the VC portfolio, fund commitments and legacy assets, showed a net return of 11.1 percent last year. This compares with a net return of 12.3 percent in 2016.
In a more detailed annual report issued this month, performance was broken down to show a net return of 18.2 percent on the “core” platform. This refers to OPE’s direct investments, which OMERS said made gains as a result of earnings growth in the portfolio and successful exits.
Two exits were cited. They include October’s sale of Civica, a London provider of public-sector software, digital solutions and tech-based outsourcing services, to Partners Group for more than £1 billion (US$1.3 billion).
OPE bought Civica in 2013 from 3i Group for £390 million and later backed the company’s organic and M&A initiatives, including buys of some 12 businesses. It was expecting a solid return. When the sale was announced, OPE said it would generate 2.6x its money.
The other exit is the sale of Husky IMS International, a Bolton, Ontario, injection-molding equipment and service provider. OPE and Berkshire Partners agreed in December to sell the company to Platinum Equity. Valued at US$3.85 billion, the PE deal is one of Canada’s largest since 2014.
OPE and Berkshire bought Husky in 2011 from Onex Corp for US$2.1 billion. Over the next six-plus years, the joint owners focused on helping grow the company’s earnings by enhancing service, making acquisitions and developing the product line.
Husky’s systems are used to make a range of plastics products, such as beverage bottles, medical devices and electronic parts. Its sale to Platinum, closed this week, gives the company its third PE owner in 11 years. Senior management led by John Galt, Husky’s CEO since 2005, invested alongside.
Another performance driver could be OPE’s sale of a majority interest in U.K. maritime-service provider V.Group to Advent International. The sale, OPE’s first involving a European asset, closed in March with the seller staying on as minority investor.
Civica and Husky are respectively OPE’s 10th and 11th disclosed liquidity events in the past four years. Others include 2016’s sale of Canadian baked-goods maker Give & Go Prepared Foods to Thomas H. Lee Partners, in which OPE tripled its money.
Along with exiting companies, OPE has been adding to the portfolio.
Last year’s deals include acquisitions of majority stakes in intelligent-commerce network operator Inmar and calibration service provider Trescal, as well as a minority position in National Veterinary Associates.