Eric Haley to Retire From OMERS PE at End of Year
The head of buyouts at Ontario’s pension fund for local government workers, Eric Haley, will retire and leave the firm at the end of the year in the latest change to the plan’s private equity business.
Haley will continue to lead the North American buyout team until the end of 2025, Don Peat, spokesperson for the Ontario Municipal Employees Retirement System, said in an email. “We are deeply grateful to Eric for his commitment to delivering on the Omers pension promise and his significant contributions to our private equity business and team culture.”
Omers has been revamping its private equity unit under Ralph Berg, who became chief investment officer in 2023. Last year, the Toronto-based fund halted direct private equity investments in Europe and opted to shift its strategy by investing alongside partners and external managers. The pension also launched a global funds strategy within a new group called Private Capital.
The $27.5 billion (US$20 billion) private equity portfolio was split, with Michael Block leading the global funds strategy and Haley overseeing the North American buyout program, the firm said at the time. It’s unclear whether Omers will replace Haley.
Haley’s departure continues a period of employee change within Omers’ private equity business. In March, Alexander Fraser, a former partner of a Temasek-backed fund, joined as global head of its private equity arm. He succeeded Michael Graham, who retired in February. Jonathan Mussellwhite, who had led private equity in Europe since 2018, left a few months before that.
For decades, the so-called Maple Eight have built up their deal teams to take a leading role in some private equity transactions. Now, some of them want to lean more on partners, as higher borrowing costs choked deal activity and diminished the allure of controlling portfolio firms.
Last month, Ontario Teachers’ Pension Plan said it’s re-examining its buyout unit, aiming to work more with partners rather than owning large or controlling stakes in private businesses as it seeks to mitigate risk. And Caisse de Depot et Placement du Quebec said in February that it will scale back its direct investing and team up with third-party managers.
I'll keep my comments brief as it's Election Day in Canada and I want to see coverage as results start coming in.
I'm hoping for sweeping change coast-to-coast but the polls suggest another minority government is on its way (sigh!).
Speaking of sweeping change, OMERS is rejigging its private equity unit.
The change has accelerated since Ralph Berg took over as CIO in 2023.
Berg has recently refocused the investment programs and in Private Equity he decided fund investments was the best route for Europe and Asia and stuck to buyouts in North America with more co-investments:
Private equity is the final piece of the puzzle with investments dominated by the buyout program. In September last year, after analysing performance and deal flow, Berg decided to switch to fund investing in Asia and Europe and to focus on buyouts in North America.
“I came to the view based on data and performance we don’t have the scale to afford the quality origination and asset management required to efficiently do control deals in Asia or Europe,” he says. “We decided to focus on our buyout efforts in North America.” That group employs around 65 people across New York and Toronto.
The fund also recently formed a new external funds management group within private equity, called private capital headed by Michael Block. This is where the historical group of OMERS Ventures, which had some success in financing pharma in particular, and a legacy portfolio in green tech, will now be housed. Through this new group it will continue to invest in life sciences and venture capital and invest with external partners in funds and co-invest.
OMERS also recently hired Alexander Fraser, a former partner of a Temasek-backed 65 Equity Partners to run its private equity arm.
Well, to be blunt the writing was on the wall for Eric Haley who was promoted in 2022 to head the North American direct buyout group.
Clearly there is an important shift in strategy going on, less purely direct buyouts, more co-investments with large strategic partners.
It's going on all over, not just OMERS, and I wrote about it last week when I covered why Canadian pension funds are cutting back on pioneering PE investments.
In short, I don't care if you're OMERS, OTPP, CDPQ or whoever, you are not going to compete with the top private equity funds in the world so it makes more sense co-investing alongside them on larger transactions to reduce fee drag.
OMERS' CIO Ralph Berg hinted at this to the Financial Times when he said: “[we] evolved our investment strategy over the last couple of years to explore different models and use funds where it is complementary”.
I suspect they'll be using more and more funds where it makes sense and start curtailing their purely direct deals, especially in Europe and Asia.
Even in North America, it's a challenging environment.
One thing is clear, however, Ralph Berg is running the show at OMERS when it comes to investments and he's very performance driven and expects results.
CEO Blake Hutcheson doesn't get involved in these investment decisions but he too expects results and wants to make sure all departments are producing what is expected of them.
Alright, let me wrap it up there but before I forget a few items related to OMERS.
First, Anca Drexler, former Head of Total Portfolio Management there is now the new CIO of Building Ontario Fund:
I congratulate her and think she'll be a superb CIO at Building Ontario Fund.
And OMERS CFO & CSO Jonathan Simmons is back it again this year, walking to raise funds for MS research:
Jonathan raised more than $500,000 last year in cumulative funds for his 25th anniversary and if you'd like to support him, please do so by clicking here.
I was diagnosed with MS back in June 1997 right in the middle of writing my Masters' thesis in Economics at McGill.
Back then, I flew to New Jersey to meet Dr. Stuart Cook who edited The Handbook of Multiple Sclerosis (my late aunt worked with him and arranged a meeting).
At the time, there were only three drugs available to treat MS (Betaseron, Avonex and Rebif) and Dr. Cook convinced me to go on Avonex which lasted for eight years till I stopped using it because I saw no meaningful benefits.
Amazingly, the progress in research and new drugs over the last 28 years has been spectacular (especially for relapsing remitting MS, less so for progressive MS although there too there's progress).
The good thing about MS is after many years, the disease stabilizes, there are a lot less or no inflammatory attacks but neurological deficits remain.
After almost 30 years, I can write my own handbook on MS but count myself lucky.
My biggest preoccupation these days is addressing my chronic SI joint pain which is debilitating and I am prepared to do radiofrequency nerve ablation which will cost me a pretty penny (there is no free healthcare in Canada, that's a myth).
Anyways, I wish Jonathan all the best again this year, please feel free to donate here to help him raise his target funds.
Below, Blake Hutcheson, President and CEO of OMERS, recently addressed the Canadian Club Toronto for a discussion on today’s turbulent economic and political landscape.
Blake is a terrific speaker and I highly recommend you take the time to watch this.
Let me also wish him a happy belated birthday and wish him many more healthy years ahead.
I celebrated mine with my wife and 19-month toddler over the weekend but unlike Blake and my friends, I was jumping in and out of a playpen but did get to watch the Habs with some buddies last night eating pizza (too bad they lost).
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