Local partners are key to Ontario Teachers' Pension Plan's success
The Canadian asset manager is well known for generating superior or long-term returns
Finding the right local partners is the phrase that comes up most when doing an interview with Ron Mock, who took over at the helm of the Ontario Teachers' Pension Plan just over five months ago.
Known for generating superior long-term returns, OTPP, which has C$130 billion (HK$926 billion) in assets under management on behalf of 300,000 active and retired teachers, has hired seven private equity firms in the region since it launched its regional office in Hong Kong last year - the second overseas office after London.
"We think it is most important to find deals where we have deep partnerships with the governments and investment professionals with deep local knowledge," Mock said. "We believe those relationships will translate into investment opportunities and better pricing, which is our edge when investing for the long term."
It is most important to find deals where we have deep partnerships
Unlike most private-equity firms running a pan-Asia portfolio, the fund prefers to hire country-focused managers to handle their capital because it believes they would have an in-depth knowledge of local culture and investment dynamics.
The fund is also in a privileged position to have a mandate to invest for a long time in order to avoid short volatility when investors often buy at the peak and sell in a trough. Even with a gigantic portfolio, it had reported a return of about 10 per cent last year after delivering double-digit returns for the past few years.
Among the seven existing private-equity firms, it had spent about US$100 million to US$600 million for each, it said.
In Asia-Pacific, its largest investment is a US$2.3-billion co-investment with Hastings Funds Management in a New South Wales desalination plant in 2012. It invested a combined HK$1.3 billion in Macau casino and hotel developer Louis XIII last year, according to Dealogic.