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Ontario Teachers’ nets 32.3 pct through PE, VC portfolio

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Rapper Drake looks on during an announcement that the Toronto Raptors will host the NBA All-Star game in Toronto, September 30, 2013. Toronto was selected as the host of the National Basketball Association's (NBA) 2016 All-Star Game, marking the first time the showcase event will be held outside of the United States, the league said on Monday. REUTERS/Mark Blinch (CANADA - Tags: SPORT BASKETBALL ENTERTAINMENT) - RTR3FG17
  • C$28.4 bln portfolio netting 20.2 pct since inception
  • Ontario Teachers’ buys stakes in six companies last year
  • Private capital team led by Senior VP Jane Rowe

The Ontario Teachers’ Pension Plan’s private-capital portfolio returned 32.3 percent last year, nearly doubling the 18.1 percent return generated by its benchmark, according to its annual report.

Ontario Teachers’ private-capital portfolio includes its commitments to private- equity and venture-capital funds, as well as its direct companies. The C$28.4 billion ($21.9 billion) portfolio has generated a 20.2 percent internal rate of return since its inception, according to the pension plan’s website.

The private-capital portfolio grew some 25 percent in 2015, according to the annual report. Ontario Teachers’ attributed the growth to stronger valuations across its existing holdings, though the pension was an active investor as well.

“We mark our assets to market in a very robust annual valuation process. The portfolio is global and it is our practice to add value to the assets we own,” wrote spokeswoman Deborah Allan in an email.

The C$171.4 billion pension plan formed new relationships with two general partners through fund commitments last year. It also committed “a number of” re-ups to existing PE and VC general partners, according to the annual report.

On the direct-investment front, Ontario Teachers’ acquired stakes in six new companies last year, including French funeral-services provider OGF and Infiltrator Water Technologies, which produces chambers and tanks for the wastewater industry.

More than a third of Ontario Teachers’ private-capital portfolio is invested in consumer and retail businesses, according to the annual report. Industrial-sector holdings account for 22 percent of the portfolio. Telecom, media and technology investments make up another 17 percent.

The private-capital investment team is led by Senior Vice President Jane Rowe. Bogdan Cenanovic, Steve Faraone, Romeo Leemrijse, Michael Murray and Lee Sienna lead sector-focused investment teams for Ontario Teachers Pension Plan.

Overall, Ontario Teachers’ Pension Plan returned 13 percent for the year ended Dec. 31, according to the annual report.

Action item: To read Ontario Teachers’ annual report, visit www.otpp.com/home

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