Ontario Teachers’ Pension Plan, Canada’s third-biggest retirement fund, is seeking more investments for its natural-resource unit after closing its first deal.
Teachers’ said today it closed a C$153.4 million ($150 million) purchase of a 4.9 percent stake in Saskatchewan’s Weyburn oil asset from Pengrowth Energy Corp. (PGF), the first deal for the Toronto-based pension fund’s Natural Resources Group since it was set up in January.
“This is the inaugural deal of the group,” Deborah Allan, a Teachers’ spokeswoman, said today in an interview. “They will be looking for similar natural-resource based transactions in Canada and abroad.”
The unit, comprising seven people, wants to buy assets in areas including agriculture, mining and energy in Canada and around the world, Allan said. The team is pursuing deals in the C$50 million to C$250 million range, she said.
“The whole point here is to diversify, to get additional commodities exposure but diversify that exposure,” Allan said. “We’re looking at actually owning real assets.”
Teachers’, which has C$117.1 billion of assets as of Dec. 31, 2011, also shifted its timberland holdings into the group.
“We get the cashflow that we as a pension fund crave, we get the diversification so that we’ve got real assets as well as the financial exposure, and it gives us a hedge against inflation,” Allan said.
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