OTPP Gains 11.1% in 2021
Ontario Teachers’ Pension Plan rode big gains in private assets to post an 11.1-per-cent return for 2021, topping its benchmark comparison portfolio by more than two percentage points.
The outperformance is a turnaround, as Teachers missed its benchmark by roughly two percentage points in both 2019 and 2020. The plan closed the year with $241.6-billion in assets.
Teachers’ annualized net return was 8.4 per cent over the past five years and and 9.3 per cent over the past 10. The return figures are after investment costs.
Teachers said its private-equity portfolio returned 29 per cent in 2021, versus a benchmark of 17.5 per cent. Private equity, which typically uses debt to fund investments in private companies that do not trade on public stock markets, increased from 19 per cent of Teachers’ portfolio at the beginning of the year to 23 per cent, or $55-billion, at the end.
Teachers also posted a 7.9 per cent gain in infrastructure - assets like airports and toll roads - versus a benchmark of 1.2 per cent. Teachers’ $26-billion infrastructure portfolio has five European airports, which were punished in the pandemic by the drop in air travel but have since rebounded.
The two asset classes helped compensate for benchmark-lagging performance in other areas. Public equity - stocks that trade on exchanges and are available to the individual investor - returned 9 per cent, below a benchmark of 13.1 per cent. Public equities take up 11 per cent of the portfolio, or $27.2-billion, a steep decline for 19 per cent of assets at the beginning of the year.
And real estate, where Teachers has a number of shopping malls and other retail holdings, returned 2.5 per cent, versus a benchmark of 8.8 per cent. The asset class is 11 per cent of the Teachers portfolio.
Teachers said it acquired nearly 50 private assets across five continents in 2021, including stakes in an insurance distributor in Australia and New Zealand; Finland’s largest electricity distribution company; and Canadian operations owned by Enwave Energy Corp. Real estate subsidiary Cadillac Fairview expanded its investments in U.S. apartments.
The defined-benefit pension plan serves the province’s 333,000 active and retired teachers. Teachers said it closed 2021 fully funded, with a $17.2-billion surplus.
Teachers has a large number of retired members, with long life expectancies, compared to its count of active members. That mix has typically meant Teachers has held more bonds than some newer systems, such as Canada Pension Plan.
That bond-heavy portfolio helped Teachers when markets fell in the COVID-19 pandemic, but was a drag on returns as markets recovered.
Teachers sold off bonds in late 2020, trimming its exposure, but made a bit of a shift back in 2021: The portfolio closed the year with $33.3-billion in bonds, or 14 per cent of assets, up from 8 per cent at the end of 2020. Rising interest rates mean declining bond prices, and Teachers’ bond portfolio declined 9.4 per cent in 2021.
The fixed-income category, which includes other investment products that aren’t technically bonds, was 19 per cent of the portfolio at year-end, up from 16 per cent at the end of 2020.
Ziad Hindo, Teachers’ chief investment officer, said in a statement “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.”
Caisse de dépôt et placement du Québec posted a 13.5-per-cent, benchmark-beating return in 2021. The Ontario Municipal Employees Retirement System – which entered the year with 5.5 per cent of its portfolio in bonds, reported a turnaround 15.7 per cent return after posting a 2.7-per-cent loss in 2020.
Five of the big “Maple Eight” Canadian pensions report their results on a calendar year, and the other two - Alberta Investment Management Co. and Healthcare of Ontario Pension Plan - have yet to release 2021 results.
BNN Bloomberg also reports that Ontario Teachers' fund gains 11.1% on private equity, resources:
Ontario Teachers’ Pension Plan posted an 11.1 per cent return last year, boosted by big gains in private equity and natural resources investments that offset losses in its bond portfolio.
The fund outperformed its benchmark by 2.3 percentage points, lifting assets under management to $241.6 billion (US$189 billion), the Toronto-based pension manager said Monday.
“We delivered strong results for our members despite the challenges brought about by a second year of a global pandemic,” Chief Executive Officer Jo Taylor said in a statement.
Private equity holdings advanced 29 per cent, while resources returned 28.1 per cent. Ontario Teachers’ also outperformed its benchmark in infrastructure with a 7.9 per cent gain.
Teachers’ public stock portfolio made a 9 per cent return, underperforming the market.
“Our efforts to balance and diversify our portfolio through increasing allocations to credit, real assets and inflation-sensitive assets proved timely,” Chief Investment Officer Ziad Hindo said, adding that the fund is positioned to weather the impacts of higher inflation.
The pension made nearly 50 deals for private assets last year, including a 40 per cent stake in Finland’s largest electricity distribution and 50 per cent of a U.S. solar and energy storage portfolio from NextEra Energy Resources LLC.
Teachers’ committed $5 billion in green or energy transition assets, pushing its green portfolio to $30 billion.
Barbara Shecter of the National Post also reports Ontario Teachers' Pension Plan says Russia exposure minimal, posts solid annual return:
The Ontario Teachers’ Pension Plan has no direct investments in Russia, but is working with companies in its portfolio and third-party managers to limit exposure to the country and to ensure they “understand and navigate” sanctions imposed by western nations including Canada since the invasion of Ukraine last month.
“We decided a while ago Russia wasn’t really a destination market for us,” Jo Taylor, the chief executive of the $241.6-billion fund manager, said in an interview Monday, adding that the “vast majority” of the fund’s portfolio companies do not have activities in Russia.
However, he noted that the sanctions are “complicated,” involving both exposure to Russia and Russian entities and that Teachers’ is also exercising what control it can over investments it makes through third-party fund managers.
Taylor described the indirect exposure as “de minimus” at “well south of $50 million” and said Teachers has sent a clear message that they don’t want exposure to Russia.
“They are third-party managers with their own strategy (and) we invested in them to do things but we have been … in discussions with them to try and understand the exposure and reduce it where possible,” he said.
On Monday, Teachers’ released financial results for 2021, posting a return of 11.1 per cent and beating its benchmarks in segments including private equity.
Taylor said the nearly 30 per cent return on private equity last year reflects a high proportion of profit growth in addition to multiple expansions. He said the pension manager has also shifted its strategy in favour of making larger investments with fewer partners.
“We’ve decided … to concentrate on slightly larger investments where we would be either in direct control of the decision or working with one other partner, so where we’ve got a significant amount of influence,” he said, adding that data shows this strategy leads to better returns.
“We’ve been developing that strategy. It’s serving us well.”
A relatively new division that makes late-stage venture and growth equity investments, the Teachers’ Innovation Platform (TIP), grew 40 per cent in 2021, reaching a value of $7 billion that represents nearly three per cent of the overall fund.
OTPP put out this press release on its 2021 results:
2021 Highlights:
- 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.
Earlier today, I had a great discussion with Jo Taylor and Ziad Hindo, CEO and CIO of Ontario Teachers' Pension Plan.
I want to begin by thanking both of them for taking the time to talk to me as well as Dan Madge for setting up this Webex meeting and providing me with material beforehand.
Jo began by stating he was pleased with the overall performance, that OTPP is well-diversified, has plenty of liquidity and a great global team to continue delivering on its mandate.
I began by noting Private Equity had a great year and asked Jo if like others, they took advantage of high valuations to dispose of assets to realize on their investments.
Jo was careful:
"I'd say not really. As you know, Teachers' has been investing in Private Capital for 30 years, we've been allocating to that asset class for a long time and it served us really well over the last few years, made great returns over a long time. They're a very capable team, internationally based. You see a lot of headlines of pension funds chasing returns in private assets. We've been doing it a long time, we are just deciding on the right allocation to that category and it has gone up because valuations have moved positively for us. And I would say the strategic shift we've been looking at with Karen Frank taking over from Jane Rowe running the Equities business (including Private Capital) is we really want to be more active investors where we have a larger influence over the business (larger investments with more significant say). It's not just to have a portfolio where we have influence to generate the right growth and returns. We have a long list of things of things we ask from our companies to make sure they are doing the right thing. So, D&I (diversity & inclusion) is very important for us so we make sure they deliver on that. We stand by the 30% Club so we want 30% of women on board which we achieved across our portfolio. We want them to meet our objectives in terms of reduction of our carbon footprint and carbon intensity. We also want to make sure they are contributing something positive to their community so we favor when we have more ability to control over what happens in the business."He went on to discuss Real Assets:
"The other thing is we have shifted a fair bit of our asset mix from Fixed Income to Real Assets to find stable, low risk assets that are giving us a return. We made a lot of good progress both in Real Estate but particularly in Infrastructure like core infrastructure assets where we invested in a number of very high quality companies in sectors like electricity generation around the world. We like those assets because they give us predictable returns with some inflation coverage. For us, they form a good base in our portfolio to actually deal with some of the turbulence that we're seeing at the moment."
Jo then mentioned the Teachers' Innovation Portfolio:
"The newer bit with higher volatility is the Innovation fund (TIP) which we started in the last couple of years. It did very well last year largely because of higher funding round valuations that impacted the majority of those businesses. We try to only take that valuation when we and other people invest as well (so it's credible way to say valuations progressed) but we recognize that this activity is one where we have to watch how it progresses in terms of valuations and liquidity requirements."
However, on liquidity, Jo was adamant:
"We are really lucky, we have loads of liquidity at Teachers' ($40 billion) to support our portfolio companies to grow through turbulent times and it allows us to do these strategic shifts to lean into areas where we see opportunities (like private markets recently)."
Ziad Hindo then started talking to me about inflation:
"On inflation, clearly going into this year, we were concerned that it just seemed more sticky than transitory. We have already increased Inflation Sensitive asset class to 20% of the fund which is a sign we are concerned about it. Inflation is broad based: goods, services, wages, rents and housing. It will be amplified by Russia's invasion of Ukraine as it will impact commodities and supply chains more. Overnight, you saw stories of cities and ports in China shutting down, so to be honest, inflation is here and it's not going away any time soon. It's been more than 30 years since investors had to manage inflation so we clearly have to do our best. Our liabilities are indexed to inflation so we need to be very cognizant of what is going on there."
I then told Ziad I noticed from 2020 to 2021, Bonds increased in terms of allocation (from 8% to 14%) and I didn't understand this given their inflationary views. Ziad responded:
"Absolutely worth clarifying so thanks for raising it. It's probably worth going back to 2019 when rates were rising and we felt it was a good entrance to adding to exposure and then post-Covid, we were very active reducing that exposure significantly. So in 2020, we did that and then in the early part of 2021, we kept reducing it quite significantly and whatever was left, we actually moved into the front end of the the curve so it looks we are increasing exposure, but in reality from an interest rate sensitivity exposure, our exposure to fixed income has never been lower (from a duration perspective). It's hard to explain this in an asset mix. From an interest rate sensitivity, we have nullified our exposure to fixed income."I told Ziad, given historic low rates, I like the Caruna deal and similar deals like that because it's a great way to get yield in core infrastructure over the long run even if it's moderately more risky than fixed income.
Ziad replied:
"Yes, it's Caruna, it is Spark in Australia, it is Evoltz in Brazil. Enwave in Canada. We have done a number of those and frankly we are not done to the extent we can get more assets on the core infrastructure side, we will. We are sitting on a ton of liquidity. Our team is led by Dale (Burgess), they are very active looking for opportunities. We like core infra. it has a huge role to play in a pension fund portfolio."
Jo interjected:
"The great thing about that -- I think that team did a super job finding marquee assets -- but it's also our sector and geographic diversification within the infrastructure portfolio, so a little less dependent on Europe, a little less dependent on transportation assets, and that gives a nice balance on how we will secure returns through that portfolio."
He added:
"As you know, we have had some residual impacts on our retail portfolio in real estate and airports in infrastructure due to Covid but we have many European airports and there's a lot of pent up demand to get out and travel and we are expecting better days ahead in terms of our retail mall properties here in Canada."
I then shifted my attention to Real Estate which got hit hard last year because of legislative closures, and told Jo and Ziad in a recent comment of mine going over OTPP's big venture to develop Oxford North, I felt there was a strategic shift going on in that portfolio to diversify it more geographically and by sector.
Ziad said
"That is absolutely spot on. Diversify internationally and diversify by sector. Whether it's life sciences, doing a deal with IQHQ in the US or multi-family deals with Lincoln Property in the US and Long Harbour in the UK, the Oxfrod North deal which you wrote about and has an education lineage back to Teachers'. We are investing heavily to diversify that portfolio. We also just put a team in Singapore for Cadillac to look for partnership opportunities in Asia as well."
In Canada, he added this:
"To be honest, even in Canada, we are in the process of using our land bank to diversify our retail assets. So, we are going to be essentially building multi-family adjacent to those properties, essentially leveraging these properties to convert them into mix use to address the ongoing shortage of housing we are seeing in Canada. We are looking at logistics hubs and East Harbour as well which looks promising as a mixed use property."
Jo interjected to make a distinction:
"We have chosen to diversify internationally and by sector rather than sell assets in Canada at less than ideal prices. It's fair to say over a longer period of time, retail assets will shrink in our real estate portfolio but the ones we have now are good assets and we want to make sure we get the best return on them for our members rather than divest at less than ideal prices."
[Note: I have seen pensions take big haircuts on Retail assets and I also saw a great deal from BCI's QuadReal to diversify out of Canada but that was pre-Covid so they were lucky to get that deal done at the right time.]
Next, I spoke to them about their ESG targets which are very aggressive.
Jo replied:
"We do have aggressive targets and we are aggressive not just on carbon intensity reduction but also, we are bold on how much of the portfolio we are trying to cover in terms of what we are measuring. We are trying to cover the majority of our portfolio and those assets where we have a reasonable holding (over 20%), we are trying to measure it correctly and reduce our carbon footprint. It's not easy but we are committed to doing it."
He added:
"We are pretty pragmatic about the need to look at on a transition basis. So invest in companies where we try to help them to improve their footprint rather than divest from them. Sometimes you need to look at the fossil fuel area say there will be some transition fuel -- like in our case we believe it will be natural gas -- where there will be a period of time where it is appropriate to have those businesses to be as effective to make the maximum contribution as they can to allow society to transition to renewables. To me, that's our brand, to make sure we work with those businesses to see how they make improvements, it's part of our active strategy."I said flat out it's impossible for any pension to get to net zero through divestment (not a wise strategy), you need to massively invest to attain that goal.
Ziad agreed and gave me examples of transition assets they are looking to invest in like utilities that shut down coal plants to buy more renewables so they are working with their partner Brookfield to do these transition investments across the gamut.
He also gave me the example of Fulcrum BioEnergy in their PE portfolio, a company which is utilizing trash as a feedstock, diverting large volumes of waste from local landfills and reducing greenhouse gas emissions by more than 100 percent on a lifecycle basis.
He added: "We still invest in green, I'm sure you saw our deal with NextEra, we are very excited about this partnership" (I wrote about it here, great long-term deal).
Lastly, I asked them about how they are positioning Teachers' given all the geopolitical and inflationary risks.
Jo told me the comments he made last year still hold, meaning they need to be thoughtful of investing in countries where they can be an active partner and make an important contribution.
They are obviously looking at inflation risks and investing in core infrastructure, natural resources, real estate to hedge against these risks.
"We are pleased to be fully funded with a low discount rate and we have plenty of liquidity to take advantage of opportunities as they arise."
He did add: "There will be a talent war in the coming years, most people know Teachers' has good people, we will be getting more."
One final note, I did ask Ziad about Public Equities and why they underperformed their benchmark and he told me it was due to external managers who were heavily underweight energy and it was a tough year for active managers (I'm a bit surprised they don't just index most of this activity).
Alright, let me wrap it up there and once again thank Jo & Ziad for a great in-depth discussion which I did my best to cover here (Windows Recorder helps a lot, just discovered it).
A big thank you to Dan Madge too for thinking of me, really appreciate it.
Astute blog readers will note that OTPP did not publish its annual report along with its results this year but it will be coming out in the next few weeks and will be made available here.
Below, former Dallas Fed President Richard Fisher joins CNBC's 'Squawk Box' to react to February's key inflation data, stating inflation will move higher and last longer than expected.
Update: Read my follow-up comment on Jo Taylor's bold vision for OTPP.
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