The Healthcare of Ontario Pension Plan’s private equity portfolio generated a return of 9.26 percent in 2012, just under the portfolio’s previous return of 10.31 percent in 2011.
The C$47.4 billion (€36.2 billion; $46.6 billion) pension plan has a 5 percent target allocation to private equity and a 4.3 percent actual allocation, the vast majority of which is comprised of fund investments in Europe and North America. Roughly 40 percent of HOOPP’s private equity portfolio is based in Canada, with the remainder allocated internationally.
“We’ve tended to focus on mid-cap growth in developed markets,” HOOPP president and chief executive officer Jim Keohane told Private Equity International. “We have some managers in the UK, France, Germany and Italy, and that’s probably not going to change.”
The value of HOOPP’s private equity portfolio grew from C$1.97 billion to C$1.99 billion during 2012, with a total of C$3.45 billion invested or committed to private equity and related special situations as of the end of the year. The pension plan’s total portfolio generated an overall return of 17.1 percent in 2012, its highest return in a decade.
The majority of HOOPP’s direct private equity investments are made alongside general partners with which the pension plan has a fund investment.
“We typically sign co-invest agreements up front when we start [a] relationship,” Keohane said.
However, HOOPP Capital Partners, the pension plan’s private equity division, does not allocate a specific amount to direct investing and fund investments.
“We are opportunistic in how we deploy capital and flexible in our execution,” said Elizabeth Loach, a partner of HOOPP Capital Partners.
Last year, HOOPP sold its stake in Italian motorcycle maker Ducati to Porsche for an undisclosed sum.
Created in 1960, HOOPP represents 274,000 Ontarians who work at more than 370 employers across Ontario.