Relationships That Deliver Growth Through Partnership

For more than a decade, our strategy of purchasing large equity stakes (between 2% and 30%) in public companies — or companies about to go public — and partnering with leading management teams to improve shareholder value has delivered above-market performance for the plan.

Our multi-year perspective enables our partner companies to focus on long-term business strategies and opportunities, not on short-term results.

Our Relationship Investing team has the knowledge, experience and financial backing to complete large, sophisticated deals and to effectively partner directly with public companies in long-term relationships.

Whether we're partnering with industry leaders, supporting a major change in corporate strategy or helping a company improve its business and financial performance, our Relationship Investing group works constructively with boards and senior management teams in Canada and around the world.

How We Invest

Our investments are large — $200 million and up — with no pre-determined hold period. This longer term or "patient capital" view matches reflects Ontario Teachers' long-term obligations to pay pensions, and enables management teams to concentrate on improving long-term shareholder value.

For investee companies, we offer:

  • strong, established partnerships, including a global network of industry and financial contacts who know our reputation and track record
  • sophisticated skill sets of the Relationship Investing deal team
  • the ability to leverage the in-depth industry expertise of our public equities and private equities groups, and the broader resources of our capital markets, and infrastructure teams
  • the ability to structure bespoke investments to meet the needs of unique situations
  • significant liquidity and size, providing the financial firepower needed for large equity investments
  • more than a decade of experience working closely with partner companies
  • a longer-term investing horizon

Our work includes:

  • partnering with industry — we invest in assets alongside premier companies
  • solution investments — we support a major change in a company's strategy
  • constructive engagement — we encourage boards and management to improve business and financial performance

In each situation, we see our involvement as a catalyst. By helping companies to establish themselves, grow through acquisitions, reduce debt and undertake major capital programs, we have been instrumental in transforming entire sectors.

Ontario Teachers' Relationship Investing is different because:

  • We run a concentrated portfolio, more akin to private equity than traditional public equities
  • Our holdings are generally more liquid than private equity, but less liquid than publicly traded stocks
  • We have more influence with our partner companies than investors in widely held public companies do, but less control than private equity investors typically require
  • We conduct appropriate due diligence, similar to private equity investors
  • We are agile

Past Success Stories

LLX Logistica S.A. 

In 2007, we invested US$185 million to help create LLX Logistica S.A., then a private subsidiary of MMX Mineracao e Metalicos S.A. of Brazil.It was subsequently spun off to become an independent public company in July 2008. LLX is a South American logistics company currently building three major port systems in the Southeast region of Brazil. We became a significant investor in MMX in July 2006 and worked with MMX management through 2007 in developing a plan to create an independent logistics company to address Brazil's demand for ports and logistics infrastructure, as well as service the iron-ore handling needs of MMX. As a major shareholder, we assisted the company with project financing arrangements, as well as negotiations for port handling agreements with significant customers.

National City Corporation 

In 2007, we invested US$185 million to help create LLX Logistica S.A., then a private subsidiary of MMX Mineracao e Metalicos S.A. of Brazil.It was subsequently spun off to become an independent public company in July 2008. LLX is a South American logistics company currently building three major port systems in the Southeast region of Brazil. We became a significant investor in MMX in July 2006 and worked with MMX management through 2007 in developing a plan to create an independent logistics company to address Brazil's demand for ports and logistics infrastructure, as well as service the iron-ore handling needs of MMX. As a major shareholder, we assisted the company with project financing arrangements, as well as negotiations for port handling agreements with significant customers.

Nexen Inc.

Nexen is an independent, Canadian-based global energy company with operations in Alberta, the North Sea, the Gulf of Mexico, the Middle East and offshore West Africa. Along with Canadian Occidental Petroleum, we agreed to purchase 50% of Canadian Occidental from its parent company, Occidental Petroleum in 2000 and became the company's largest shareholder when the deal closed. The new, independent company was renamed Nexen Inc. shortly thereafter.

OGX Petróleo e Gás S.A.

In 2007, we backed the EBX Group of Rio de Janeiro in the creation of OGX Petróleo e Gás S.A., an oil and gas exploration and production company in Brazil. We led a $1.3 billion private placement transaction that enabled OGX to successfully acquire 21 of its targeted offshore exploration blocks in the ANP's ninth-round auction. OGX completed the largest IPO in Brazilian history in June 2008. It is now the second largest oil and gas exploration and production company in Brazil in terms of exploration acreage. We continue to work with the EBX Group and OGX management on strategic, governance and financing initiatives that will position OGX to be successful in the Brazilian oil and gas sector.

WestJet Airlines Ltd.

WestJet Airlines Ltd. is Canada's leading low-cost airline offering scheduled service throughout its North American network. WestJet pioneered low-cost high-value flying in Canada and has been named one of the country's most respected corporations for customer service. We were an early financial backer of WestJet and worked with the company on strategic, governance and financing initiatives.

Michael Kors

Michael Kors is a fast growing global accessories, footwear and apparel company serving customers in 85 countries through retail and department stores, specialty stores and select licensing partners. The company completed a successful initial public offering of shares in December 2011 and is listed on the New York Stock Exchange.

GE-9X

In 2014, we partnered with GE Aviation and the Development Bank of Japan to help finance R&D for GE's most fuel-efficient engine to date: the new GE-9X jet engine. GE designed the turbofan specifically for the Boeing 777X wide-body airliner expected to take flight in 2020.

 

Disclaimer

Links to other sites are provided as references to help you identify and locate resources of interest. The links should not be construed as an endorsement by Ontario Teachers' of the services, products or information provided on the linked sites. Ontario Teachers' assumes no liability or responsibility for the content, accuracy or appropriateness of the links or of any material contained on the linked sites.

 

Ken Manget
Ken Manget
  • Managing Director, Relationship Investing