Ontario Pension Hunts Real Estate, Infrastructure Investments in Light of Inflation

As Ontario’s pension fund prepares for a prolonged period of high inflation, government employees are looking for other deals in infrastructure and real estate for the same.

Price pressures will likely take a few years to ease before stabilizing above 2% for several more years, Stoyanova said. Investments in real estate, inflation-linked bonds and infrastructure – including electric utilities – are all part of a long-term strategy to protect the C$79 billion fund (62 billion) from a decline in purchasing power, she said.

“We think inflation will be high over the next 10 years compared to the past 10,” Rossitsa Stoyanova, chief investment officer of Investment Management Corp, said Monday. of Ontario, during an interview.

Imco on Monday said it returned 9.6% in 2021, beating its benchmark by 8.5%. A small loss in bonds was more than offset by double-digit gains in stocks and real estate.

Among the deals: Imco has become a major investor alongside Tishman in a new $1 billion research campus at Harvard University, as part of a longer-term plan to move its real estate portfolio from retail and office businesses in Canada to apartments, industrial and medical. use properties.

It was an active year for Imco on several fronts. The fund hired Stoyanova from the Canada Pension Plan Investment Board to lead its investment team and entered into new investment agreements with KKR & Co., Brookfield Asset Management Inc. and Tishman Speyer, among other companies.

Imco is also an initial investor in Brookfield’s Global Transition Fund, which aims to provide capital to industrial companies and utilities to help them decarbonise.

Imco wants to form partnerships with leading investors in every asset class and shift more of its portfolio into private assets over time, chief executive Bert Clark said. Public stocks made up about 34% of the fund at the end of last year; bonds were around 22%.

“It’s still really a project in the making. The things we do take time,” he said. Imco was created in 2016 to consolidate the management of several public funds in Ontario, including pension plans that cover many provincial government employees and judges. It also administers funds for the Workplace Safety and Insurance Board, an insurance program for workers’ compensation or occupational disease in Canada’s most populous province.

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  • Ontario Pension Hunts Real Estate, Infrastructure Investments in Light of Inflation
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