Ontario Teachers’ Fund Seeks to Boost Asia Strategic Investments
Ontario Teachers’ Pension Plan is looking for more deals involving taking a significant minority stake in Asian companies, said Wayne Kozun, head of public equities at Canada’s third-largest retirement-fund manager.
Ontario Teachers’ plans to buy “meaningful stakes” in a handful of medium to large companies in the region, Kozun told reporters in Hong Kong today. The focus of its public equities staff in the city will be on such investments, he added.
The manager of C$129.5 billion ($126 billion) seeks to raise its emerging-markets investments to as much as 20 percent of assets from 15 percent, Chief Investment Officer Neil Petroff said in May after the Toronto-based fund opened its Asian office in Hong Kong.
“We are looking at really ramping up the exposure in Asia now that we have a team on the ground,” Kozun said. “It should be much easier for us to do these deals by having staff based in Hong Kong.”
One part of Ontario Teachers’ public-equity investment strategies involves buying 5 percent to 10 percent stakes in companies, said Deborah Allan, its Toronto-based spokeswoman. It then works with the management and board, instead of taking a confrontational activist role, Kozun said.
Past deals through the strategy in the region include those in Chow Tai Fook Jewellery Group Ltd. (1929), the world’s largest listed jewelry chain, and 360buy Jingdong Inc., a Chinese business-to-consumer e-commerce company, Kozun said.
Asia-related investments account for C$11.5 billion of the fund’s assets, according to Jane Rowe, head of private capital and infrastructure, the pension’s private-equities department.
Ontario Teachers’ has deployed C$1.5 billion to Asian private equity, including both direct investments in companies and through outside managers, Rowe said. It has committed another C$1 billion to private-equity firms for Asian investments, which has yet to be drawn down, she added.
The retirement fund relocated three investment professionals to Hong Kong from Canada, focusing on public and private equities. It plans to increase the size of its investment staff in the city to at least eight through local recruitment in the next six to nine months, Rowe said.
Ontario Teachers’ is responsible for investing and managing pensions for about 303,000 active and retired teachers in Canada’s most-populous province.
The fund returned 13 percent on investments in 2012, led by real estate, private equity and stocks, beating the 9.4 percent median gain of Canadian pension funds last year, the pension said in May.
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