OMERS Opens London Office; Unveils Global Brand

The Ontario Municipal Employees Retirement System has established its first overseas office in London and launched a new branding program to support plans to roughly double its allocation to private investments over the next five years.

One of Canada’s largest pension funds, with C$52 billion ($40.5 billion) in assets under management, OMERS is seeking to boost its exposure to private investment to C$30 billion from the current C$15 billion by 2013. To do that, it’s looking abroad to access large-scale opportunities and co-investment capital from other pension plans and sovereign wealth funds.

The opening of the London office, which will have 20 to 30 employees, marks one of the first steps in this effort. In a second step, OMERS has combined four of its investment branches—real estate, infrastructure, private equity and capital markets—into a new unit called OMERS Worldwide.

Among the companies that OMERS Worldwide owns in Europe are Faiveley Transport SA, a French firm that specializes in the design and manufacture of railway equipment, and Honsel International Technologies, a supplier of cast, machined and assembled light metal components to the automotive industry. The company is based in Luxembourg.

As new relationships are established and investment opportunities are sourced, OMERS Worldwide intends to open offices in other regions as well, but it was mum about where the next office might be. “No other specific locations are planned at this time,” Janice Wong, spokesperson, told Buyouts. “OMERS Worldwide in London establishes a footprint in London and Europe, and the need for further offices will be assessed as we move forward to implement any plans to expand globally where the best opportunities lie.”

It seems likely, however, that a location in Asia could be next. As previously reported in the June 23, 2008, issue of Buyouts, Canadian pension funds are increasingly looking beyond Europe to focus on Asia and other emerging markets. OMERS Worldwide has significantly increased its investments in Asia, with $250 million in commitments to Asian funds as of June 2008, versus $144 million committed to Asia-based private equity partnerships as of February 2007.

Other Canadian investors have also been on the move abroad. The Canada Pension Plan Investment Board opened a Hong Kong office in February and a London office in late May. The Ontario Teachers’ Pension Plan created a London bureau last year. The Caisse de dépôt et placement du Quebec has nine offices in Europe, Asia and Latin America.

The California State Teachers’ Retirement System is likely to be the first U.S. public pension fund to open an office abroad, as previously reported in the July 21, 2008, issue of Buyouts. It’s expected to establish staff in Europe and Asia sometime in the next four to five years.

By 2012, OMERS expects its total assets to exceed C$68 billion, a rise of almost 24 percent from current levels, and C$5 billion to C$7 billion of these assets will likely be European-based, according to Wong.