Teachers' navigates choppy market to deliver strong results

April 27, 2012

Teachers' saw another year of investment results surpassing benchmark returns, taking net assets to an all-time high.

The Investment Division navigated chaotic markets and dealt with sluggish economies while managing risk to produce strong returns for the third straight year.

Investment performance highlights include: 

  • net assets: $117.1 billion;
  • rate-of-return: 11.2%;
  • benchmark rate-of-return: 9.8%;
  • value-added return: $1.4 billion; and
  • investment income: $11.7 billion.

What role do investment strategies play in paying your pension?

Because pension benefits paid to retirees exceed member and government contributions by nearly $2 billion annually, investment activity fuels the plan. The plan actively works to create value-added returns by exceeding benchmark returns that could be achieved from a more passive investment approach.

"The $1.4 billion in value-added in 2011 was enough to pay 37,000 average pensions for an entire year," says Neil Petroff, Executive Vice President, Investments.

And since the fund's creation in 1990, value-added returns have increased the plan's assets by $53 billion. Value-added returns represent 33% of the plan's total income for the same period, and benchmark returns represent 43%. These exceed the combined contributions from members and the government that accounted for 24% of the total.

Big deals

Deal activity remained strong in 2011, with more realizations than in recent years. Some notable sales include:

  • Maple Leaf Sports and Entertainment;
  • GNC IPO;
  • Sydney Airport; and
  • Hillcrest Mall.

Teachers' also made some great investments in 2011. These include:

  • Copenhagen and Brussels Airports;
  • Impark; and
  • Michael Kors.