Why Companies and Other Private Equity Investors Choose Ontario Teachers'
Being part of a pension fund makes Private Capital different. It gives us – and our partners – the flexibility to create meaningful value and removes constraints that limit the amount that other private equity players can invest in a single opportunity. In short, it makes us a valued long-term partner the world over.
Here are just some of the reasons management teams and other private equity funds make Private Capital their first call:
We are a long-term investor with no fixed timetable for realization. We offer companies flexible, long-term capital and the opportunity to grow over time. This gives management the chance to achieve their strategic goals without undue pressure for short-term financial results.
Backed by a $175.6 billion pension fund, we have the capacity and skills to finance sizeable transactions and frequently offer additional rounds of financing. In some cases, we can meet a company's debt and equity needs by partnering with other groups within Ontario Teachers'. Our large, flexible pool of capital and broad investment mandate enables us to structure each investment to meet the requirements of the business.
Our international transaction experience dates back to the early 1990s. Today, we put capital to work the world over and offer the knowledge and capabilities to support the global expansion strategies of our investee companies.
Our presence in Toronto, London, Hong Kong and New York gives us enhanced access to international private equity opportunities. Our strategic relationships with equity fund partners make our reach even broader.
The people of Private Capital are not generalists – they bring expertise in specific industry sectors. With market-relevant knowledge and diverse business contacts, we can be more effective partners to investee companies.
Solid Governance Principles
Consistent with our Responsible Investing approach, we encourage good corporate governance and effective boards with independent directors who bring relevant operating experience to portfolio companies.
For our partnerships with private equity funds, we believe transparency and alignment of interests for limited and general partners are vital. For that reason, we are a member of the Institutional Limited Partners Association (ILPA) and endorse the ILPA Private Equity Principles.
Private Capital doesn't invest for short-term gains: we take the long view, and participate as committed owners in businesses that are driven to achieve meaningful, strategic advantage. This makes us different than traditional private equity players whose primary focus is financial engineering.
Since inception, our core private capital portfolio (direct investments, co-investments and private equity funds) has generated an internal rate of return of 19.6%.
Private equity investments totalled $26.6 billion at the end of 2016 compared to $28.4 billion at December 31, 2015, and returned 4.3% compared to a benchmark return of 5.4%. Private Capital completed six new direct investments in 2016.