Posts 11.42 per cent return in 2020
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The Healthcare of Ontario Pension Plan (HOOPP) surpassed $100 billion in assets in 2020, after posting an 11.42 per cent return.
On the heels of that milestone, chief executive Jeff Wendling said the pension investment manager for health-care workers in the province is shopping for an overseas office, possibly in Singapore, an expansion that would put it in the company of some of Canada’s largest pensions.
“We may also go with a foreign office in Europe… but definitely London or somewhere on the continent,” Wendling said in an interview from HOOPP’s sole office in downtown Toronto.
A working group is studying which location makes the most sense, said Wendling, who moved into the CEO job from his role as chief investment officer about a year ago. He anticipates that the first overseas office will open sometime in 2022.
“We expect to have recommendations later this year,” he said, adding that having a foreign office can help forge investment partnerships and suss out opportunities.
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HOOPP, like other large Canadian pensions, has so far weathered the COVID-19 pandemic better than past crises, ending last year with $104.0 billion in net assets, up from $94.1 billion in 2019.
The plan’s 10-year annualized rate of return is 11.16 per cent, among the highest of pension plans worldwide and the highest among consulting firm CEM’s Canadian data set of 66 pension funds.
Wendling described 2020 as a “tumultuous year,” and credited his team for navigating volatile capital markets and hard-hit sectors like real estate, and maintaining the liquidity required to take advantage of “significant” buying opportunities.
They were about half way through a program aimed at taking advantage of battered equities markets when “unprecedented” government and central bank stimulus caused markets to quickly snap back, he said. Still, returns from both fixed-income and public equities portfolios were strong.
“Being able to achieve these results in such a tumultuous year highlights the resilience of our highly diversified fund and long-term investment management approach,” Wendling said.
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HOOPP’s real estate holdings include logistics,putting the fund in a stronger position during the pandemic than institutional investors whose holdings are heavily weighted towards retail and office space.
Wendling said the health-care pension has been investing in logistics for more than 10 years. In a recent deal, the Canadian pension teamed up with European real estate specialist Verdion to purchase a former Royal Air Force site on the German-Dutch Border, where the pair intend to create a 177-hectare logistics park.
HOOPP’s funded status at the end of 2020 was 119 per cent, meaning that for every dollar owed in pensions it had $1.19 in assets. As a result of the performance, HOOPP’s Board of Trustees approved a benefit improvement for members based on contributions in 2018 through 2020.
Financial Post
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