Robert Poirier to Lead OMERS Governance Review; OPE Acquires Integris
Ontario’s government has appointed businessman and corporate director Robert Poirier to lead a review of governance at Ontario Municipal Employees Retirement System, choosing a board member from one of the pension fund’s critics.
The province has handed Mr. Poirier a 10-month mandate to examine the effectiveness of the model for governing OMERS, which is steered by two boards of directors, and whether it has engaged clearly enough with its members.
Mr. Poirier is the chief executive officer of NeuState Advisory, a firm he founded, and a former executive in the pensions division of asset manager State Street Corp. He was the long-time chair of the Toronto Port Authority and, earlier in his career, advised a committee of Canada’s Senate on issues that included the creation of major public-sector pension funds such as the Public Sector Pension Investment Board.
Until last month, he was also a board member at transit agency Metrolinx – one of multiple OMERS employers that wrote to Ontario’s government in June asking for an urgent review of the pension fund’s governance structure.
Ontario’s Municipal Affairs and Housing Minister Paul Calandra ordered the review in August. He was responding to pressure from associations representing OMERS members that complained to government about the pension fund’s governance, including a perceived lack of transparency from one of the pension fund’s two boards.
The review’s mandate is similar to one that former senior public servant Tony Dean followed in 2012 when he led the last provincial review of OMERS governance.
A spokesperson for Mr. Calandra, Justine Teplycky, said Mr. Poirier was screened by the Office of the Integrity Commissioner of Ontario before his appointment was finalized, and resigned his Metrolinx board seat on Nov. 20 – two days before he was appointed to lead the review.
“Mr. Poirier is well-positioned to lead the review with his advanced understanding and familiarity with pension plan governance and administration, as well as strong executive leadership skills,” Ms. Teplycky said in an e-mailed statement. “He will undertake a governance review of OMERS to ensure that its governance model is serving the interests of plan members in a fair, equitable, and transparent manner that supports the plan’s long-term financial sustainability.”
Mr. Poirier declined to comment and directed questions to the province.
The target of the members’ complaints, which were spearheaded by associations representing police and firefighters, has been the Sponsors Corporation (SC) board at OMERS. It makes board appointments, sets benefits and contributions, and monitors the plan’s long-term health.
A separate Administration Corporation (AC) board oversees the fund’s investments, plan valuation and pension administration.
The chair of the AC board, George Cooke, welcomed Mr. Poirier’s appointment in a statement.
“We are supportive of the review and see it as the right forum to build on the governance work initiated by the 2012 review,” Mr. Cooke said. “We are committed to fully cooperating with Mr. Poirier, and all stakeholders, to ensure we deliver the best possible outcome for our 628,000 members across Ontario.”
Some OMERS members felt the SC board had blindsided them with planned changes to contribution rates starting in 2027 that will require certain employees to pay more into the plan, though about 70 per cent of members will pay the same or lower amounts. Police, firefighters and other employees who earn more than $90,000, as well as some employers, will pay higher contributions – about $15 to $20 more per pay period for most police officers.
In a letter to Ontario Premier Doug Ford dated June 20, 2024, and reviewed by The Globe and Mail, Metrolinx board chair Donald Wright raised the contribution issue and wrote that “my fellow Board members and I” have growing concerns about the pension fund manager, including a perceived lack of consultation by OMERS on governance matters that affect employees’ financial futures.
Mr. Poirier was a Metrolinx board member at the time the letter was written, which could raise questions about his impartiality as the review’s leader. But the heads of two police associations that asked for the review welcomed Mr. Poirier’s appointment.
“We do not have any concerns about the appointment at this time, and have had no past involvement with Mr. Poirier,” said Clayton Campbell, president of the Toronto Police Association, in an e-mailed statement. “We’re eager to have the review get started and look forward to meaningful changes that will benefit our members.”
Police Association of Ontario president Mark Baxter said in an e-mailed statement that he hopes the review will make the OMERS SC board “more transparent and accountable to members.”
“Mr. Poirier is a qualified business person who has sat on many successful boards and we look forward to supporting his work with this review,” Mr. Baxter said.
Mr. Poirier was appointed on Nov. 22, according to a government notice. He has until Sept. 19 to complete his work, though he could finish sooner. According to the notice, he will be paid a per-diem rate of up to $1,500 for a maximum of 235 days, with total potential compensation capped at $352,500.
The current review will not cover the financial sustainability of the plan or OMERS’s investment performance, nor will it revisit the proposed changes to contribution rates.
I've already discussed why Ontario's government launched a governance review at OMERS here.
I'm not going to get into it again except to say it's time to get on with it and in my humble opinion, it's time to do away with this dual board which none of OMERS' large peers have (one is plenty).
I don't know Robert Poirier but he is eminently qualified to review the governance at OMERS.
And while he was a Metrolinx board member at the time the letter was written, which could raise questions about his impartiality as the review’s leader, I'd wait to see the final report before making any such conclusions.
Again, for me it's straightforward, OMERS is a large global pension fund but it doesn't need two boards.
Still, I will wait to read the final report to see what Mr. Poirier has to say.
In other news, Paula Sambo of Bloomberg reports OMERS' private equity arm buys IT firm Integris from Frontenac:
Omers Private Equity is buying a majority stake in Integris, a US cybersecurity and IT consulting company, from Chicago-based Frontenac Company LLC for an undisclosed amount.
The deal marks Omers’ entry into the IT managed-services industry, according to a statement seen by Bloomberg News. The Ontario Municipal Employees Retirement System is one of Canada’s largest pension managers, with net assets of C$133.6 billion ($95.2 billion) as of June.
The management team at Integris will remain in place, Omers said.
Integris, which is based in New Jersey and was formerly known as Domain Technology Group, focuses on providing IT services to small- and medium-sized businesses. It has offices along the US east coast and in the midwest and south.
Frontenac bought it in 2020 and merged it with other firms to form Integris in 2021, then supported it through several acquisitions.
“Integris is a world-class platform that excels in delivering expert outsourced IT services and customer support in an industry with significant growth potential,” Eric Haley, head of buyout at Omers Private Equity, said in the statement.
On Tuesday, OMERS Private Equity issued a press release on this acquisition:
OMERS Private Equity today announced the signing of a definitive agreement to acquire a majority stake in Integris (“Integris” or the “Company”) from Frontenac, a Chicago-based private equity firm. Financial terms of the transaction were not disclosed.
Integris offers a full suite of outsourced IT, cloud, and cybersecurity services to small and medium-sized businesses across the United States. Headquartered in New Jersey, the company supports its customers nationally through its network of offices on the East Coast, in the Midwest and the South.
The partnership with Integris marks OMERS Private Equity’s entry into the IT managed services provider (MSP) space – a large and rapidly growing sector that delivers IT services to small and medium-sized businesses across various industries. OMERS Private Equity will support management in maintaining its impressive track record of profitable growth, both organically and through strategic acquisitions.
“Integris is a world-class platform that excels in delivering expert outsourced IT services and customer support in an industry with significant growth potential,” said Eric Haley, Senior Managing Director and Head of Buyout, OMERS Private Equity. “This investment provides an opportunity to establish our presence in the sector and enhance our business services portfolio, backed by a team with deep industry expertise and a strong, customer-centric reputation.”
“We are excited to welcome Integris to our portfolio to continue building on what is already an impressive culture, platform, and strategy,” said Geoffrey Bird, Managing Director and Head of Business Services, OMERS Private Equity. “Equally critical is that Integris' proven leadership team will remain at the helm, ensuring seamless continuity and the continued delivery of outstanding customer service.”
“As we embark on our next chapter, having the right partner is key to our continued success. With OMERS proven track record of scaling its portfolio companies, we are confident in our ability to drive continued growth and success for Integris,” said Rashaad Bajwa, Founder and CEO, Integris. “At the same time, we extend our sincere gratitude to Frontenac for its investment, leadership, and collaboration over the past four years.”
“OMERS Private Equity is the ideal partner to build on the strengths of Integris. Our organizations share a strong alignment in cultural values and a unified vision for the future,” added Glenn Mathis, President and COO, Integris. “With their support, we will continue to raise the bar, expanding our national footprint and serving an even larger customer base.”
The transaction is expected to close in December 2024. DLA Piper acted as legal counsel and Baird served as financial advisor for Integris and Frontenac. Cravath, Swaine & Moore LLP acted as legal counsel for OMERS Private Equity.
About OMERS Private Equity
OMERS Private Equity manages investments globally on behalf of OMERS, one of Canada’s largest defined benefit pension plans, with C$128.6 billion in net assets as of December 31, 2023, including approximately C$25.1 billion in net private equity investment asset exposure. The team invests across Industrials, Healthcare, Business Services and Technology, deploying an evergreen capital base to partner with strong management teams and transform good companies into industry leaders around the globe. For more information, please visit www.omersprivateequity.com
About Integris
Integris is a national, managed IT service provider dedicated to helping small and mid-sized companies power their success through technology. Through a growing network of local service offices and gold-level partnerships with technology vendors, Integris provides companies with comprehensive and a la carte system platform management that’s responsive, secure, regulation ready, and tailored to their industry vertical. Founded in 2021, Integris offers clients the power of a national network, with the personal service of a nearby, local-market MSP. Integris appears regularly on the Inc. 5000 list of fastest-growing companies. Headquartered in Cranbury, New Jersey, Integris employs 600+ professionals nationwide. For more information, visit integrisit.com
About Frontenac
Frontenac is a Chicago-based private equity firm. The firm focuses on investing in lower middle market buyout transactions in the consumer, industrial, and services industries. Frontenac works in partnership with established operating leaders, through an executive-centric approach called CEO1ST®, which seeks to identify, acquire, and build market-leading companies through transformational acquisitions and operational excellence. Over the last 50+ years, Frontenac has built a franchise working with over 300 owners of mid-sized businesses as they address complex transition issues of liquidity, management enhancement, and growth planning. For more information, please visit www.frontenac.com
It's worth noting what Eric Haley, Senior Managing Director and Head of Buyout, OMERS Private
Equity said about this deal:
“Integris is a world-class platform that excels in delivering expert outsourced IT services and customer support in an industry with significant growth potential. This investment provides an opportunity to establish our presence in the sector and enhance our business services portfolio, backed by a team with deep industry expertise and a strong, customer-centric reputation.”
Also worth noting what Geoffrey Bird, Managing Director and Head of Business Services, OMERS Private Equity stated: “Equally critical is that Integris' proven leadership team will remain at the helm, ensuring seamless continuity and the continued delivery of outstanding customer service.”
To understand why this is a great deal even though financial details weren't disclosed, you need to go back to September 2020 and read about when Frontenac acquired Domain Computer Services and merged it with Tier One Technology Partners to create a leading premium MSP platform (now called Integris):
Domain Computer Services (“Domain”), a New Jersey-based managed IT services provider, announced it has completed a merger today with like-minded Maryland managed IT services company, Tier One Technology Partners (“Tier One”), to form a premium national MSP platform. To propel their growth, the companies also announced a recapitalization in partnership with Frontenac, a Chicago-based private equity firm. Financial terms of the transaction were not disclosed.
Domain and Tier One specialize in managing the IT and cybersecurity needs of top-tier professional services firms. Both companies have been recognized as award winning MSP industry leaders in several verticals: Domain in legal and financial services and Tier One in non-profit. Together with Frontenac, they are on a path to build a premium national provider of managed IT services by partnering with other MSPs that share their values of operational excellence, vertical focus, employee engagement and development.
The combined firm will be led by Rashaad Bajwa as CEO, Jim Kehres as Managing Director of the Maryland/DC market and Kris Laskarzewski as Managing Director of the NJ/NY/PA market.
Rashaad Bajwa, CEO of Domain, said, “When we set the intention of building a national MSP platform, I knew that Dave and Jim at Tier One were one of the first conversations I was going to have. We’ve worked together closely for years as peers in ITNation Evolve; joining forces with them and Frontenac as our partner fulfills our vision of building a premium MSP platform focused on people, process and reputation.”
“After knowing Rashaad for years through our professional peer group, I knew and respected Domain as a leading MSP. When Rashaad approached me about bringing Domain and Tier One together, I quickly realized this could be a dream team,” stated Dave Shaffer, CEO of Tier One. “Together with Frontenac, they care about the things that matter most – our people, our clients and our reputation. This team makes a very attractive partner for best-in-class MSPs.”
Domain and Tier One found Frontenac and its executive-centric approach to be a natural fit as they were looking for the right partners to help them expand their MSP business. Joining the Board of Directors at closing is industry veteran Mike Jenner, who has 25+ years of experience growing technology services companies. Mike is the current CEO of ControlCase and is the former CEO of NexusTek. He will be joined on the Board of Directors by Corey Sisler, former CFO of NexusTek and CFO of Spectraseis.
Joe Rondinelli, Principal at Frontenac, said, “Together with Mike and Corey, we were attracted to Domain and Tier One because of their people, culture, best-in-class operations and exceptional client base. We see substantial white space in the industry and are excited to support management by investing in strategic organic growth initiatives and acquiring other like-minded MSPs.”
“Domain and Tier One fit perfectly with Frontenac’s franchise of investing in and growing best-in-class, tech-enabled services companies alongside extraordinary leadership teams,” added Michael Langdon, Managing Director at Frontenac. “We look forward to aggressively building out a national MSP.”
Honigman LLP served as legal counsel to Frontenac on the transaction. Szaferman Lakind served as legal counsel for Domain and Tier One.
About Domain Computer Services
Domain Computer Services is an IT managed services provider that focuses on cybersecurity, cloud services, IT consulting, and infrastructure. They offer unlimited on-site and remote support packages to clients in the New Jersey, New York and Philadelphia metro areas, with an emphasis on law firms, financial services and other high-end professional services. Domain was founded in 1997 by Rashaad and Michelle Bajwa. For more information on Domain, please visit www.go-domain.com.
About Tier One Technology Partners
Tier One Technology Partners is an IT managed services provider that focuses on cybersecurity, cloud services, IT consulting, and infrastructure. They offer unlimited on-site and remote support packages to clients in the Maryland and DC metro area, with an emphasis on the non-profit industry. Tier One Technology Partners was founded in 1998 by Dave Shaffer and Jim Kehres. For more information on Tier One, please visit www.tieroneit.com.
About Frontenac
Frontenac is a Chicago-based private equity firm. The firm focuses on investing in lower middle market buyout transactions in the consumer, industrial, and services industries. Frontenac works in partnership with established operating leaders, through an executive-centric approach called CEO1ST, which seeks to identify, acquire, and build market-leading companies through transformational acquisitions and operational excellence. Over the last 50 years, Frontenac has built a leading franchise working with over 275 owners of mid-sized businesses as they address complex transition issues of liquidity, management enhancement, and growth planning. For more information, please visit www.frontenac.com.
I would invite you to read more about Integris here and see their experienced leadership team, especially Rashaad Bajwa, founder and CEO:
Cybersecurity is a huge field and there are well-known giants like CrowdStrike but a lot of lesser well-known firms like Integris growing fast.
Lastly, as I noted in my comment on why OMERS is stopping to make direct private equity investments in Europe, there is a shift at OMERS in the private equity group..
Eric Haley is Head of Private Equity, Buyout and leads the OMERS Private Equity strategy and team, focusing primarily on direct PE investments. He is responsible for the strategic execution of our Buyout strategy and oversees OMERS Private Equity's investments in the business services, industrial, and healthcare sectors.
The investment in Integris was made by OMERS Private Equity. Michael Block is Head of Private Capital and leads OMERS Private Capital strategy and team, which includes the development and execution of our new global funds and co-investment strategy.
[Note: Private Equity won’t be renamed Private Capital, they’re two separate entities: (1) OMERS Private Equity - majority buyout and (2) OMERS Private Capital - funds and co-investments.]
Below, Rashaad Bajwa, Founder & CEO of Integris explains how they premium technology solutions for small-to-medium-sized businesses across the country.
Mr. Bajwa also spoke about the changing state of office culture in the hybrid world during NJBIA's 2023 Insights and Outlooks summit (worth listening to this).
Lastly, I'd be wrong not to take this opportunity to plug the great interviews Celine Chiovitti, Chief Pension Officer, OMERS, has done at the Pension Blueprint Podcast which you can view here.
Also worth noting that Nancy Nazer, Chief Human Resources Officer, and Celine have been honoured with one of the country’s most prestigious recognitions: the Women’s Executive Network (WXN)’s Canada’s Most Powerful Women: Top 100 Awards.
You can read details here and let me take this opportunity to congratulate them both on this well deserved award.
Comments
Post a Comment