One-year total fund net return of 11.1%, driven by strong returns from private equity, inflation sensitive and innovation investments
Record annual value add to the fund of $5.5 billion
The plan is fully funded for a ninth straight year
Annualized total-fund net return over ten-years of 9.3% and since inception return of 9.7%
Diversified investments globally, acquiring nearly 50 private assets across five continents
Invested or committed over $5 billion into additional green or transition assets
TORONTO (March 14, 2022) — Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced a one-year total-fund net return of 11.1% for the year ended December 31, 2021, exceeding its benchmark by 2.3%. This outperformance relative to its benchmark resulted in a record annual value add of $5.5 billion. Net assets grew to $241.6 billion.
These results contributed to the plan being fully funded as at January 1, 2022, with a $17.2 billion preliminary funding surplus. This marks the plan’s ninth consecutive fully funded year, underscoring the long-term financial health and sustainability of the plan.
“We delivered strong results for our members despite the challenges brought about by a second year of a global pandemic,” said Jo Taylor, President & Chief Executive Officer. “We had excellent investment performance, maintaining our fully funded status, and delivered a high level of service for our members – all while making meaningful progress on our new multi-year strategy.”
As at December 31, 2021, Ontario Teachers’ delivered an annualized total-fund net return of 9.7% since inception in 1990 and five- and 10-year annualized total-fund net returns of 8.4% and 9.3%, respectively.
Investment Performance
Time period (all as at December 31, 2021)
One-year
Five-year
10-year
Since inception
Total-fund net return
11.1%
8.4%
9.3%
9.7%
“Our diversified portfolio had an excellent performance in 2021 with strong returns across private assets, particularly in private equity, infrastructure, inflation sensitive assets and the Teachers’ Innovation Platform,” said Ziad Hindo, Chief Investment Officer. “Our efforts to balance and diversify our portfolio through increasing allocations to credit, real assets and inflation-sensitive assets proved timely, and positions us well to weather the potential impacts of various economic outcomes including the current inflationary environment.”
The performance relative to the benchmark was driven largely by outperformance by our private equity, infrastructure, credit and inflation sensitive asset classes, which all meaningfully exceeded their individual benchmarks.
Portfolio Performance by Asset Class (all figures as at December 31)
Fund returns by asset class are reported in the table below.
Fund returns (%)1
Actual
Benchmark
Actual
Benchmark
2021
2021
2020
2020
Equity
Public equity
9.0
13.1
15.2
11.2
Private equity
29.0
17.5
13.5
12.3
21.3
15.5
13.2
12.1
Fixed income
Bonds
(9.4)
(9.4)
24.6
24.5
Real-rate products
(1.4)
(1.4)
12.8
12.8
(6.3)
(6.3)
20.7
20.6
Inflation sensitive
Commodities
7.9
7.9
4.3
4.2
Natural resources
28.1
24.1
(11.2)
(8.5)
Inflation hedge
8.0
8.0
(4.4)
(4.4)
11.4
10.9
(2.4)
(1.6)
Real assets
Real estate
2.5
8.8
(13.7)
(4.7)
Infrastructure
7.9
1.2
2.6
7.5
5.4
5.3
(7.6)
(0.1)
Innovation2
39.0
39.0
16.3
16.3
Credit
3.5
1.2
2.6
1.5
Total-fund net return
11.1
8.8
8.6
10.7
1 The total-fund net return is calculated after deducting transaction costs, management fees and investment administrative costs. Asset-class returns are before deducting investment administrative costs.
2 Benchmarked to actual return during an incubation period, after which it will be measured against an active benchmark.
Detailed Asset Mix (all figures as at December 31)
Asset Class
$ billions
%
$ billions
%
2021
2021
2020
2020
Equity
Public equity
27.2
11%
42.4
19%
Private equity
55.1
23%
41.8
19%
82.3
34%
84.2
38%
Fixed income
Bonds
33.3
14%
17.2
8%
Real-rate products
11.9
5%
17.4
8%
45.2
19%
34.6
16%
Inflation sensitive
Commodities
26.5
11%
17.7
8%
Natural resources
9.4
4%
7.4
4%
Inflation hedge
12.1
5%
11.5
5%
48.0
20%
36.6
17%
Real assets
Real estate
26.3
11%
25.2
12%
Infrastructure
26.1
11%
17.8
8%
Real-rate products
–
0%
1.9
1%
52.4
22%
44.9
21%
Innovation
7.1
3%
3.5
2%
Credit
24.3
10%
18.0
8%
Absolute Return Strategies
14.9
6%
13.6
6%
Overlay3
(0.5)
0%
0.8
0%
Funding for investments4
(34.7)
(14%)
(18.3)
(8%)
Net investments5
239.0
100%
217.9
100%
3 Includes strategies that manage the foreign exchange risk for the total fund.
4 Includes term debt, bond repurchase agreements, implied funding from derivatives, unsecured funding and liquidity reserves.
5 Comprises investments less investment-related liabilities. Total Net Assets of $241.6 billion at December 31, 2021 (2020 – $221.2 billion) include Net investments and other net assets and liabilities of $2.6 billion (2020 – $3.3 billion).
“Our global investment teams had an active year, making nearly 50 direct or add-on private investments across five continents and committing to ambitious interim emission reduction targets,” added Taylor. “Looking forward, we are well positioned for continued global growth and to meet our strategic goal of reaching $300 billion in net assets by 2030.”
Transactions Highlights
Ontario Teachers’ manages approximately 80% of its assets internally, with a focus on deploying capital into active strategies. During 2021, the fund diversified investments globally and acquired nearly 50 private assets across five continents. Highlights from the year include:
Capital Markets:
Alongside partner Incus Capital, provided a corporate loan of €140 million to Capital Energy, an integrated renewable energy operator in the Iberian Peninsula;
Provided capital to several syndicates at Lloyd’s, the world’s leading insurance and reinsurance marketplace, through the London Bridge Risk (LBR) PCC.
Equities:
Acquired a 33.4% interest in Greenstone, a leading insurance distributor focused on developing life and general insurance products for Australians and New Zealanders;
Announced plans to acquire HomeQ, the parent company of HomeEquity Bank, Canada’s leading bank offering reverse mortgage solutions;
Made a significant strategic investment in Mitratech, a leading provider of legal and compliance software;
Became an anchor investor funding U.S. private equity firm TPG Rise Climate Fund, which works with businesses who are developing innovative climate solutions.
Infrastructure:
Acquired a 40% holding in Caruna, Finland’s largest electricity distribution company;
Jointly acquired a 100% interest in the Canadian district energy operations owned by Enwave Energy Corporation for C$2.8 billion on an enterprise value basis;
Acquired a 50% interest in a portfolio of high-quality wind, solar and energy storage assets across the United States from NextEra Energy Resources, LLC;
Became a founding investment partner of the Brookfield Global Transition Fund, a global fund dedicated to accelerating the transition to a net-zero economy.
Natural Resources:
Became a significant shareholder in GreenCollar, a leading environmental markets project developer and investor across the carbon, water quality, biodiversity and plastics markets in Australia.
Real Estate:
Our real estate subsidiary Cadillac Fairview, alongside partner Lincoln Property Company’s residential division, grew their US multifamily fund from US$800 million to US$1.8 billion in equity. The fund will continue to focus on the development and acquisition of high-quality multifamily assets in top US markets.
Teachers’ Innovation Platform:
Led a C$375 million Series D fundraising round for ApplyBoard, an online platform that empowers students around the world to access top quality education;
Participated in the US$420 million B-1 funding round for FTX Trading Ltd., owner and operator of FTX.COM, a leading global cryptocurrency exchange;
Led the US$138 million Series C fundraising for Beamery, a leading talent operating system that helps companies attract, engage and retain top talent.
Climate ambition and investment
As part of its journey to achieve net zero on its investment activities by 2050, Ontario Teachers’ set industry-leading targets to reduce portfolio carbon emissions intensity by 45% by 2025 and 67% by 2030, compared to its 2019 baseline. Our portfolio carbon footprint and progress against these targets will be included in our upcoming annual report.
“We have a multi-faceted climate strategy that is rooted in driving real-world emission reductions,” said Hindo. “Our strategy reflects our commitment to be accountable and to act immediately to reduce the environmental impact of our portfolio.”
Ontario Teachers’ has more than $30 billion in green investments in its portfolio and completed several transactions in 2021 that contribute to a net-zero carbon future. Since announcing its net-zero commitment in January 2021, it has invested or committed over $5 billion into additional green or transition assets.
Investment costs
Ontario Teachers’ is committed to cost effectiveness and both manages and links its costs to the investment value creation process. Total investment costs including administrative expenses, transaction costs and external management fees totaled $2,030 million (91 cents per $100 of average net assets) in 2021, compared to $1,452 million (70 cents per $100 of average net assets) in 2020.
The increase in investment costs over the prior year was driven primarily by a significant increase in deal volume and transaction size in 2021, higher external management fees including performance fees due to strong investment performance, and higher annual and long-term incentives due to strong total-fund performance.
About Ontario Teachers’
Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is the administrator of Canada’s largest single-profession pension plan, with C$241.6 billion in net assets (all figures at December 31, 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 9.7% 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, 2022, invests and administers the pensions of the province of Ontario’s 333,000 active and retired teachers. 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
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
