While most of the world spends time ignoring unsolicited advice, one of the top private equity players in Canada finds itself short on advice. The Ontario Municipal Employees Retirement System (OMERS) has seen a group of five private equity advisors leave as conflicts over the board’s role caused conflict among the business professionals and other board members.
News of these departures comes as the $30 billion pension system is trying to expand its private equity program. Its goal is to have a 10% allocation to private equity. Its current allocation stands at approximately 5%.
The OMERS Private Capital board brought on the five executives last year and the group began attending meetings last September. The board serves an advisory role, but apparently the members thought that the board would evolve into a decision-making board with their joining. That disappointment, coupled with conflicts with existing board members, led to three of the departures in September.
“OMERS is committed to bringing independent expert advice to bear in decisions on private equity investments,” says an OMERS spokeswoman. “OMERS will take any concerns raised by members into consideration. Two members have already indicated they would return.” She added that the board will consider alternative board models and that it hopes to make a decision as to the direction of the board by January.
One of the former board members, James Temerty, told PE Week that he left the board in January due to having too many other obligations. Temerty serves as the chairman of Northland Power Inc. and Softchoice Corp. He also serves as a director for a hospital foundation and museum foundation. He says that while his stay on the board was brief, it was mostly positive. Another director that left, Jean-Rene Halde, did so due to a conflict that rose when he accepted the job of president of the Business Development Bank of Canada.
The departure of the five executives, which was first reported by The Globe & Mail in Toronto, also included the September departure of Nancy Bardecki, Paul Morton and Rahul Suri.
“It was more an advisory board,” says David Rogers, senior vice president of private equity for OMERS. “The idea was for it to become a full-fledged board that’s where maybe some of the issues were. Rogers adds that while having the board’s input has been an enhancement, the departure of the five advisors would not interfere with his group’s mission of getting OMERS’ private equity asset allocation to 10%. “It doesn’t hurt us from doing business,” he says.
OMERS has invested in funds managed by Dolphin Communications, Freeman Spogli & Co. and Welsh Carson Anderson & Stowe.