OTPP's CEO and CIO Discuss Positive Mid-Year Results

Barbara Shecter of the Financial Post reports Ontario Teachers' Pension Plan Board ekes out small return in 'difficult' markets:

The Ontario Teachers’ Pension Plan Board eked out a 1.2 per cent return in the first half of the year, amid high inflation and “difficult” markets.

Net assets for Canada’s largest single-profession pension grew to $242.5 billion.

“In a tumultuous time for global markets and with the highest inflation rates we have seen in decades, we were able to deliver positive returns for our members and continue to make progress towards our goal of reaching $300 billion in net assets by 2030,” Jo Taylor, the pension manager’s chief executive, said in a statement.

“These results show that diversification, active management and an agile investment approach enable us to generate returns in a wide array of investment environments and position us well to navigate through what is likely to be a challenging investment landscape over the next few years.”

The fund’s one-year net return is 8.3 per cent, with an annualized total-fund net return of nine per cent over 10 years. The return since inception is 9.6 per cent.

Ziad Hindo, Teachers’ chief investment officer, said the latest period’s performance was achieved despite losses in most major stock and bond indices and a high inflationary environment.

“We saw positive returns in our inflation-sensitive, infrastructure and absolute return strategies asset classes, which were partially offset by losses in public equities, venture growth and credit,” he said.

“The fund has benefited from our deliberate efforts over the last 12 months to tilt the asset mix towards those that perform well in inflationary environments, particularly commodities and infrastructure.”

The pension plan was fully funded with a $17.2 billion surplus as of Jan. 1, 2022.

In an interview, Taylor said the first-half return was “below what we would like to be making” but added that he remains confident longer-term returns will keep the pension plan well funded with enough liquidity to take advantage of investment opportunities. 

“Relative to others, these are … good numbers given the environment we’ve been working on trying to navigate the first half of the year,” he said. “But having said that, we see the environment still being quite tricky, and it’s going to be, I think, difficult, certainly in the second half of ’22 and beyond.”

Taylor said Teachers’ private equity business was neutral in a difficult market in the first half of the year, attributable to the performance of individual assets including fairly good performance from recent additions that capitalized on inflation sensitivity and commodities.

“It’s a good sign when we move into new areas they’ve they’ve performed as we wanted them to do,” he said.

In real asset segments, Teachers is looking to new and higher-growth areas to adapt to the challenging market conditions. In infrastructure, this has included recent utility deals with a focus on electrification, the executives said. In real estate, it means looking outside Canada and to segments beyond established office and retail to include multi-family dwellings, and industrial and medical real estate.

Taylor said geopolitical concerns and supply bottlenecks are part of the investment picture, but he added that while some investors in the United States may be retrenching to their home market, Teachers remains committed to investing in global markets including the U.S., Europe, and India. 

“We’ve been trying to balance up really more of an equal weighting perhaps between North America and other markets around the world,” he said. 

Taylor and Hindo said Teachers remain committed to growth targets for its late-stage tech venture platform, launched in 2019, despite a dramatic pullback in tech valuations in public markets.

“We’re pretty agnostic, because if the valuation changes, we’re still happy to back a good company, we just average down the cost of our holding for the amount of equity we hold,” Taylor said. “So we can we can play a long-term game with these businesses probably better than a standard venture fund which may have less capital or might be on a slightly different time horizon.”

The Ontario Teachers’ Pension Plan (OTPP) announced today that it delivered positive return in first half of 2022:

2022 mid-year highlights:

  • Six-month and one-year total-fund net returns of 1.2% and 8.3%
  • Annualized total-fund net return over ten years of 9.0% and since inception return of 9.6%
  • Plan sponsors filed fully funded valuation with regulators
  • Successfully made high-quality global investments across asset classes despite challenging investment environment  

TORONTO (August 15, 2022) -- Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced a total-fund net return of 1.2% for the six-month period ended June 30, 2022, while the 12-month total-fund net return was 8.3%. Net assets grew to $242.5 billion.

“In a tumultuous time for global markets and with the highest inflation rates we have seen in decades, we were able to deliver positive returns for our members and continue to make progress towards our goal of reaching $300 billion in net assets by 2030,” said Jo Taylor, President and Chief Executive Officer. “These results show that diversification, active management and an agile investment approach enable us to generate returns in a wide array of investment environments and position us well to navigate through what is likely to be a challenging investment landscape over the next few years.”

As at June 30, 2022, Ontario Teachers’ had an annualized total-fund net return of 9.6% since inception in 1990. The five- and 10-year annualized net returns were 7.9% and 9.0%, respectively.

Investment Performance

Time period (all as at June 30, 2022)





Since inception

Total-fund net return







“Our diversified portfolio performed well and as designed, delivering positive returns despite a highly inflationary environment that saw losses in most major stock and bond indices. We saw positive returns in our inflation-sensitive, infrastructure and absolute return strategies asset classes, which were partially offset by losses in public equities, venture growth and credit,” added Ziad Hindo, Chief Investment Officer. “The fund has benefited from our deliberate efforts over the last 12 months to tilt the asset mix towards those that perform well in inflationary environments, particularly commodities and infrastructure.”

Detailed Asset Mix


As at June 30, 2022


As at Dec. 31, 2021


Asset Class

$ billions


$ billions






Public equity





Private equity










Fixed income









Real-rate products










Inflation sensitive









Natural resources





Inflation hedge










Real assets




Real estate

























Absolute Return Strategies










Funding for investments[2]





Net investments[3]






[1] Includes strategies that manage the foreign exchange risk for the total fund.

[2] Includes term debt, bond repurchase agreements, implied funding from derivatives, unsecured funding, and liquidity reserves.

[3] Comprises investments less investment-related liabilities. Total net assets of $242.5 billion at June 30, 2022 (Dec. 31, 2021 - $241.6 billion) include net investments and other net assets and liabilities of $2.5 billion (Dec. 31, 2021 - $2.6 billion).

Funding Status

As at January 1, 2022, the plan was fully funded with a $17.2 billion surplus, underscoring its long-term financial health and sustainability. The plan’s sponsors, Ontario Teachers’ Federation and the Government of Ontario, have filed the January 1, 2022 valuation with the regulators.

Transactions Highlights

Ontario Teachers’ manages approximately 80% of assets internally, with a focus on deploying capital into active strategies. During the first half of 2022, the fund continued to diversify investments globally. Highlights from the period include: 


  • Invested in Orva, a full-service e-commerce platform specializing in the sale of footwear, apparel, accessories, and home products from leading consumer brands;
  • Made a follow-on investment in Princeton Digital Group, a leading Pan-Asia data center operator with a portfolio of 20 data centers spanning five countries;
  • Led a €250M Series C extension for Trade Republic, Europe’s largest savings platform;
  • Made a significant investment in VerSe Innovation, the largest and fastest growing local language AI-driven content platform in India;

Infrastructure & Natural Resources

  • Formed a joint venture with Corio Generation to develop 14 offshore wind projects with a capacity of up to 9GW. Ontario Teachers’ will invest up to US$1 billion in development capital;
  • Provided funding to Haddington Ventures LLC’s ACES Delta Platform to finance the development of world’s largest green hydrogen platform;
  • Invested up to US$175 million in KKR’s road platform in India, which includes a portfolio of 12 road assets, including Highway Concessions One;
  • Partnered with Sprott to acquire a US$225 million royalty convertible note issued by Seabridge Gold’s wholly owned subsidiary, KSM Mining ULC. The KSM project is located in northern British Columbia;
  • Completed the acquisition of a stake in Puget Holdings, the parent company of Puget Sound Energy, the longest-running and largest electric and natural gas utility in Washington state;

Real Estate

  • Formed a 50:50 joint venture partnership with Thomas White Oxford Ltd, and developer Stanhope PLC to deliver Oxford North, a new global innovation district at Oxford University. The JV will invest almost £700 million to deliver 939,000 sq. ft. of laboratory and workspace to enable life-enhancing discovery;
  • Acquired two European logistics properties with a total of 1.1 million sq. ft. for a combined total of €250 million. These properties are the first acquisitions in a joint venture formed with Boreal IM;
  • Alongside partner Stanhope, finalized an agreement to buy 70 Gracechurch Street, a prime office building situated in the City of London;

Teachers’ Venture Growth

  • Led a €183 million Series E funding round for Alan, a top-tier European digital healthcare company;
  • Led a US$120 million Series C funding round for Evolved By Nature, which utilizes natural silk protein to eliminate reliance on petrochemicals in personal care, leather, apparel and other industries;
  • Participated in a US$75 million Series B funding round for Ledger, an InsurTech start-up;
  • Led a £210 million funding round for Lendable, a leading consumer finance platform that applies AI and automation to enhance underwriting;
  • Led a US$220 million Series D funding round for Taxfix, Europe's leading mobile tax app.

About Ontario Teachers’

Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $242.5 billion as at June 30, 2022. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 333,000 working members and pensioners.

With offices in Hong Kong, London, San Francisco, Singapore and Toronto, our more than 350 investment professionals bring deep expertise in industries ranging from agriculture to artificial intelligence. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.6% since the plan’s founding in 1990. At Ontario Teachers’, we don’t just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

Earlier today, I had a chance to speak with Jo Taylor and Ziad Hindo, OTPP's CEO and CIO.

I want to begin by thanking them both as well as thank Dan Madge for setting up this call. 

Jo began by telling me that the plan is focused on achieving its 4% real return rate and the inflation backdrop is challenging and he foresees 'challenging markets over the next 6-12 months."

Still, they are growing the portfolio EBITDA nicely and have focused on making it more resilient, investing more in real assets over the last few years.

He also told me they are managing their liquidity carefully here and he thinks Teachers' global brand will be a positive in challenging markets as they will be able to find the right deals with the right partners and attract great talent (see below).

OTPP's portfolio remains very diversified with inflation-sensitive assets helping the overall portfolio over the first six months of the year.

Jo told me: "We are quite cautious about going into high-risk/ high-return assets as we are a more mature plan" but exposure to commodities did help the fund in the first half of the year.

Ziad then went into a bit more detail on some portfolio shifts:

  • He said they were underweight fixed income going into 2022 and the "majority of developed fixed income markets had the worst returns in more than 40 years" (longer dated fixed income markets were down 15-20% in Canada and the US) but as rates started moving up north of 3% in some developed markets, they started buying long duration bonds again.
  • The same thing with credit, as spreads widened, they suffered double-digit losses and they took advantage to buy credit where they saw good opportunities.
  • He said “the valuation adjustments we are seeing in public markets are filtering through to private markets” but with a lag
  • He said they started 2021 at $44 billion in infrastructure and increased that exposure to more than $50 billion in the first eight months on the year. Most of that growth is in core infrastructure utility type deals. "We wanted to make sure we can preserve capital and become more defensive". He added: "We can't force it on the market, and this year, much of the volatility was in the public equity side."

I then asked them if they took advantage of dislocations in technology to add there and Jo jumped in:

Overall in technology, we are lighter than others. Teachers' Venture Growth was up last year and is very resilient this year. I think the question for us is how much and what type of technology we want. We want have a mix of high growth, disruptive technology in Venture Growth. We also have interesting technology plays in the listed markets as well as in our private equity portfolio. To me, it all comes back to valuation versus growth. Can we get in at the right entry price given the growth you see and can you stress test those businesses accurately without relying on the growth from the past. Technology is important for all investors but for us what we are trying to do is get the right balance between stage, type of customer they serve and geography. Trying to get a mix of technology all over the world, not just focus on late-stage in North America or emerging markets.

I asked Jo if the rise in rates helps Teachers' with its asset-liability mix:

I think it's a real return challenge for us. While inflation is high, there are less opportunities around the world that can sustain high growth. We are quite cautious about going into high-risk-high return segments because we have a mature plan. Having said this, if you look at the returns we got in our inflation-sensitive commodities this year, they look pretty good. For me, we want to make sure we remain fully funded -- and we are fully funded for a 9th straight year - but we want to navigate this taking the right risks. One of the standout features at Teachers' over many years is the return we make on the risk we take. We are at the top-end of the performance and if we continue to do that as we did in the first half of the year, we will be fine.

I asked Ziad if the focus going forward will be in Real Assets and specifically diversifying the real estate portfolio:

Absolutely, we are diversifying our real estate portfolio outside of Canada and also in sectors like multifamily, life sciences and more. This is a good entry for us to build  our international real estate portfolio. Likewise in infrastructure, we are still heavily focused on growing our portfolio. Having increased it significantly over the last couple of years, we are still looking for traditional and core infrastructure assets, particularly utilities. You have seen us more active there, more recently in Chile again, or Corio in the UK, as well as branching out into energy sources like hydrogen with the Haddington Ventures deal which we did earlier this year.

I ended off by asking Jo what he sees in the second half of the year:

I would say if I look forward for the remainder of 2022, I am fully less confident of things getting better. Most pension funds reporting in the near term will show markets are challenging and will remain challenging. Growth rates won't be at historic levels coming out of the current market cycle with differentiators to be able to continue to grow with the way you have seen more recently. You have to pick your spots and be clear about why you want to invest in certain areas. I think the great thing about Teachers' is we have a strong brand, we have a fantastic team which allows us to grow a lot of our capital directly rather than through third parties. It gives us the ability to influence companies we invest in so they can be conscious about their carbon footprint as well as diversity and social issues. Our strategy more recently has been to deploy the capital more internationally, balance our portfolio between Asia, Europe and North America and focus on sub-segments where we'd like to be more prevalent, like healthcare/ medical, we are looking at new territories as we have done a few transactions in India recently (this will continue to be a country focus)  as well as other areas where we can get that balance. But we want to do that at the right price point and make sure we are getting paid for the risks we take on the investments we make.

My final point is if things stay more difficult for a period of time, we are a people's business and if people see the Teachers' brand and the success we are having investing around the world, they are more likely to join our investment and support teams whereas over the last year, there has been a lot of competition for good talent.

He added this on Teachers' brand:

We try to invest behind the brand and explain what's different behind Teachers'. To me, we invest to make a mark, we are trying to do the right thing socially in terms of how we behave and invest, but also we are making good returns on a consistent basis and the plan is really well funded. There is a lot to like about being part of Teachers' in my opinion and hopefully other people will recognize that as they become more familiar with what we are doing.

I asked Ziad some final thoughts on these markets:

We had a bear market across a number of asset classes in the first half of the year and we are grappling with how much of the weakness is already priced in. But it's challenging out there in terms of slowing economic growth, rising geopolitical tensions, etc. In terms of monetary policy, we think it's probably too early to pivot and rates can end up between 3.5% and 4% and naturally that will slow down growth meaningfully as that's a level of rates we haven't seen in a while. So we are still on high alert, watching markets, seeing where we can add value.

Once again, I thank Jo Taylor and Ziad Hindo for taking the time to talk to me.

Please note Jo Taylor will be the featured guest at the Canadian Club Toronto on September 8th discussing "Investing in Innovation, International Markets and Impact". Tickets are available here.

Below, William Dudley, former president of the New York Federal Reserve, joins CNBC's 'Squawk Box' to discuss the Fed's response to inflation, his outlook for interest rates, and more.