In 2022, a weaker Canadian dollar led to a foreign currency gain of $3.8 billion as assets denominated in foreign currencies appreciated in value when converted back into Canadian dollars. This corresponds with a return impact from currency of 1.5%. This gain, partially offset by our currency hedging activities, was primarily driven by the depreciation of the Canadian dollar against the U.S. dollar, influenced by the U.S. Federal Reserve’s proactive approach to raising interest rates to combat inflation.
Investment Highlights
Ontario Teachers’ manages approximately 80% of its assets internally, with a focus on deploying capital into active strategies around the world. During 2022, the fund diversified investments globally and acquired assets across five continents. It also expanded its international footprint, opening offices in Mumbai and San Francisco. Being physically located in these key financial markets will provide more opportunities to source attractive investments and access local talent.
Transaction highlights in 2022 include:
Equities:
Acquired a co-control stake in GPA Global, a leading full-service provider of premium packaging solutions to brands in North America and Europe;
Acquired a significant majority stake in Sahyadri Hospitals, the largest private hospital chain in the Indian state of Maharashtra;
Agreed to acquire a stake in and combine group.ONE and dogado group, which will create a leading pan-European one-stop-shop provider of online presence solutions for small- and medium-sized enterprises.
Infrastructure:
Acquired a 25% stake in SSEN Transmission, an electricity transmission network business that transports energy generated from renewable sources in Scotland to more than a quarter of the U.K. land mass, for total cash proceeds of £1.465 billion;
Acquired a 70% stake in the passive mobile tower infrastructure assets of Spark New Zealand for NZ$900 million. The tower company was subsequently rebranded as Connexa;
Partnered with Connexa on an agreement to acquire additional mobile tower assets from 2degrees Mobile for NZ$1.076 billion;
Invested up to US$805 million in a convertible equity portfolio financing with NextEra Energy Partners;
Formed a partnership with Mahindra Group to acquire a significant stake in Mahindra Susten, a leading player in Indian renewable energy sector;
Formed a joint venture with Corio Generation to develop 14 offshore wind projects with a capacity of up to 9GW;
Through our portfolio company Inversiones Grupo Saesa Ltda., acquired a 99.09% stake in the share capital of listed Chilean power transmission company Enel Transmisión Chile S.A.
Natural Resources:
Provided funding to Haddington Ventures LLC’s ACES Delta Platform for the development of the world’s largest green hydrogen platform;
Partnered with Sprott Resource Streaming and Royalty, a global investment manager specializing in precious metals and real assets, in the US$225 million issuance of a royalty convertible note by Seabridge Gold’s wholly owned subsidiary, KSM Mining ULC.
Real Estate:
Our real estate subsidiary Cadillac Fairview (CF) agreed to a joint venture with Thomas White Oxford Ltd to deliver Oxford North, UK, the £700 million new global innovation district;
CF committed an additional US$700M to IQHQ, following on its initial US$500M investment in November 2020. IQHQ is a leading life science real estate developer and manager with offices in San Diego and Boston;
CF and Boreal IM acquired three logistics assets in the U.K., 15 warehouses across four regions in the Netherlands, and two industrial parks in West London, U.K. and in the Port of Rotterdam, Netherlands;
CF began construction of a 288-unit residential rental building integrated with CF Rideau Centre, Ottawa’s largest and busiest shopping mall.
Teachers’ Venture Growth:
Led a US$220 million Series D funding round for Taxfix, Europe’s leading mobile tax app;
Led the €183 million Series E funding round for Alan, a leading European digital healthcare company.
Climate ambition and investment
As part of its journey to achieve net zero on its investment activities by 2050, Ontario Teachers’ has industry-leading interim targets to reduce portfolio carbon emissions intensity by 45% by 2025 and 67% by 2030, compared to its 2019 baseline. It has made meaningful progress toward the 2025 and 2030 interim targets, with portfolio carbon emissions intensity down 32% from the 2019 baseline. Portfolio carbon emissions intensity remained unchanged between 2021 and 2022 due to an increase in both market value and absolute emissions of its portfolio carbon footprint.
Ontario Teachers’ added $3 billion in new green assets in 2022 including SSEN Transmission, Corio Generation, NextEra Energy and Haddington Ventures’ ACES Delta Platform. Green assets now total nearly $34 billion, approximately two-thirds of the way toward Ontario Teachers’ target of $50 billion.
In 2022, Ontario Teachers’ wholly owned subsidiary, Ontario Teachers’ Finance Trust (OTFT), issued a $1 billion green bond with the proceeds being invested in companies or assets that enable the net-zero transition, reduce emissions and build a sustainable economy. This was OTFT’s first green bond issuance in Canadian dollars.
Investment costs
Ontario Teachers’ is committed to cost effectiveness and links its costs to the investment value creation process. Total investment costs including administrative expenses, transaction costs and external management fees totaled $1,886 million (78 cents per $100 of average net assets) in 2022, compared to $2,030 million (91 cents per $100 of average net assets) in 2021.
The decrease in investment costs was driven primarily by a decrease in transaction fees incurred from lower direct and fund acquisition volumes this year than in 2021, and a decrease in external management fees due to lower performance-based fees than in the prior year.
About Ontario Teachers’
Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is a global investor with net assets of $247.2 billion as at December 31, 2022. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 336,000 working members and pensioners.
With offices in Hong Kong, London, Mumbai, San Francisco, Singapore and Toronto, our more than 400 investment professionals bring deep expertise in a broad range of sectors and industries. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.5% since the plan’s founding in 1990. At Ontario Teachers’, we don’t just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on Twitter @OtppInfo.
Contact
Dan Madge
Ontario Teachers’ Pension Plan
Phone: +1 416-419-1437
Email: media@otpp.com
Note to Editors: To read our Annual Report, please click here.
Annual Report (PDF)
Forward-Looking Statements
This annual report contains forward-looking information and statements that are intended to enhance the reader’s ability to assess the future financial and business performance of Ontario Teachers’. Forward-looking information and statements include all information and statements regarding Ontario Teachers’ current beliefs, targets, intentions, plans, and expectations concerning its objectives, future performance, strategies, and financial results, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “trend,” “potential,” “opportunity,” “believe,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions. Because the forward-looking information and statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond Ontario Teachers’ control or are subject to change, actual results or events could be materially different. Although Ontario Teachers’ believes that the estimates and assumptions inherent in the forward-looking information and statements are reasonable, such information and statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such information or statements due to the inherent uncertainty therein. Ontario Teachers’ forward-looking information and statements speak only as of the date of this annual report or as of the date they are made and should be regarded solely as Ontario Teachers’ current plans, estimates and beliefs. Ontario Teachers’ does not intend or undertake to publicly update such statements to reflect new information, future events, and changes in circumstances or for any other reason.
Cautionary Statement
In connection with our multi-faceted climate strategy, we have made certain commitments and set certain goals and targets (“Targets”). In establishing our Targets, we relied on various laws, guidelines, taxonomies, methodologies, frameworks, market practices and other standards (collectively, “Standards”) and also made good faith assumptions and estimates in establishing our Targets. Given the complex and evolving nature of the global response to climate change, these Standards may change over time, and our assumptions and estimates may prove incorrect or inaccurate for reasons we cannot foresee or predict.
To monitor and report on our progress toward our Targets, we rely on data obtained from our portfolio companies and other third-party sources. Although we believe these sources are reliable, we have not independently verified this data, or assessed the assumptions underlying such data, and cannot guarantee its accuracy or completeness. We also attempt to improve accuracy in the data through an independent limited assurance review. The data may be of varying quality or usefulness and may change over time as Standards evolve. These factors could impact our Targets and our ability to achieve them.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
