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Ontario Teachers’ net assets total $227.7 billion at mid-year 2021

August 23, 2021

Mid Year 2021

First-Half Highlights:

  • Six-month and one-year total-fund net returns of 3.8% and 13.2%, respectively
  • $8.6 billion in net investment income generated for the Fund
  • Since inception total-fund net return of 9.6%
  • Plan sponsors filed fully funded valuation with regulators
  • Successfully acquired high-quality assets on four continents

TORONTO - Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced its net assets totaled $227.7 billion as at June 30, 2021. The total-fund net return was 3.8% for the six-month period, while the 12-month total-fund net return was 13.2%. Ontario Teachers’ earned $8.6 billion in net investment income during the first half of 2021.

As at January 1, 2021, the plan was fully funded with an $8.5 billion surplus, underscoring its long-term financial health and sustainability. The plan’s sponsors, Ontario Teachers’ Federation and the Ontario government, filed the January 1, 2021 valuation with the regulators.

“These results demonstrate the continued execution of our investment strategy and exceed the required rate of return to keep the Plan fully funded over the long term,” said Jo Taylor, President and Chief Executive Officer. “While mid-year is an important checkpoint, long-term results are the best gauge to assess our investment performance. We are pleased to be sustaining strong 10-year and since inception returns.”

As at June 30, 2021, Ontario Teachers’ had an annualized total-fund net return of 9.6% since inception in 1990. The five- and 10-year annualized net returns, also as at June 30, 2021, were 7.9% and 9.3%, respectively.

Investment Performance

Time period (all as at June 30, 2021)

Six-month

One-year

Five-years

10-years

Since inception

Total-fund net return

3.8%

13.2%

7.9%

9.3%

9.6%

 

“Our diversified portfolio was resilient and delivered positive returns despite the lingering uncertainty of the pandemic. We saw strong performance in our private and public equity, innovation and inflation-sensitive asset classes. Gains were partially offset by losses in fixed income and currency,” added Ziad Hindo, Chief Investment Officer. “As part of our ongoing efforts to construct a more balanced and diversified portfolio, we allocated additional capital to real assets such as infrastructure and real estate, inflation-sensitive assets, and our Teachers’ Innovation Platform.”

Ontario Teachers’ holds investments denominated in over two dozen currencies across more than 50 countries but reports its assets and liabilities in Canadian dollars. In the first half of 2021, currency had a negative 1.5% impact on the total fund, resulting in a loss of $3.2 billion. This was driven by a stronger Canadian dollar relative to most global currencies, particularly the U.S. dollar.

Detailed Asset Mix

As at June 30, 2021          As at December 31, 2020

  Effective Net
Investments
at Fair Value
($ millions)
Asset
Mix
%
Effective Net
Investments
at Fair Value
($ millions)
Asset
Mix
%
Equity        
Publicly traded 38,165 17 42,471 19
Non-publicly
traded
45,227 20 41,773 19
  83,392 37 84,244 38
Fixed income        
Bonds 33,653 15 17,148 8
Real-rate products 11,292 5 17,399 8
  44,945  20 34,547 16
Inflation sensitive        
Commodities 26,589 12 17,649 8
Natural resources 8,117 4 7,439 4
Inflation hedge 11,484 5 11,536 5
  46,190 21 36,624 17
Real assets        
Real estate 26,171 12 25,200 12
Infrastructure 20,858 9 17,786 8
Real-rate products 948 1,919 1
  47,977 21 44,905 21
Innovation 5,658 3 3,474 2
Credit 18,705 8 17,977 8
Absolute
return strategies
13,896 6 13,596 6
Overlay 331 828
Money market1 (35,283) (16) (18,269) (8)
Net investments2 $225,811 100% $217,926 100%

1 Includes term debt.
2 Net Investments, which comprise investments less investment-related liabilities per the June 30, 2021 Condensed Interim Consolidated Statement of Financial Position, are $1,905 million lower than Net assets which include all other assets and liabilities.

“Our focus remains on driving sustainable and long-term growth while providing great service for our members. Thanks to our global team, we have completed a number of high-quality private transactions so far in 2021, which position us well as we work towards our goal of reaching $300 billion in net assets by 2030,” concluded Taylor.

The following are major transactions from the first half of the year:

  • Led a C$375 million Series D fundraising round for ApplyBoard, a Waterloo, Ontario-based online platform that empowers students around the world to access top quality education;
  • Acquired a 40% holding in Caruna, Finland’s largest electricity distribution company;
  • • Led an RMB1 billion fundraising round for CD Finance, a leading rural service institution that supports entrepreneurship and poverty alleviation in China’s rural population;
  • Alongside IFM Investors, jointly acquired a 100% interest in the Canadian district energy operations owned by Enwave Energy Corporation, a low-carbon energy provider, for C$2.8 billion on an enterprise value basis;
  • •Purchased a 100% interest in Evoltz Participações S.A., a leading electricity transmission platform in Brazil. The company has seven electricity transmission lines that total more than 3,500 km across 10 states in Brazil;
  • • Through our real estate subsidiary Cadillac Fairview, committed US$400 million to the Hines Asia Property Partners fund, a multi-sector, open-ended, diversified vehicle targeting top-tier markets in Japan, Australia, South Korea, Singapore and China (including Hong Kong).
  • Acquired a majority stake in Logoplaste, a leading global designer and manufacturer of innovative and sustainable plastic packaging solutions for premier consumer brands;
  • Made a significant strategic investment in Mitratech, a leading provider of legal and compliance software.

In addition to the many climate change and ESG-related direct investments noted above, since June 30 Ontario Teachers’ has become an anchor investor in two climate change-related funds by committing significant capital to the Brookfield Global Transition Fund and the TPG Rise Climate Fund. As part of Ontario Teachers’ commitment to achieve net-zero greenhouse gas emissions by 2050, it is increasing investments in climate-related solutions that will help the world transition to a low-carbon economy.

About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is the administrator of Canada's largest single-profession pension plan, with C$227.7 billion in net assets (all figures at June 30, 2021 unless noted). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.6% since the plan's founding in 1990. Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific region offices are located in Hong Kong and Singapore, and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded as at January 1, 2021, invests and administers the pensions of the province of Ontario's 331,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

Contacts:

Dan Madge
Ontario Teachers' Pension Plan
Phone: +1 416-419-1437
Email: media@otpp.com

Oliver Mann
Kekst CNC
Phone: +44 203 7551 607
Email: otpp@kekstcnc.com

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