OPTrust grows private equity

The $14bn pension system has hired TD Bank's William Hatanaka (pictured) following the departure of CEO Stephen Griggs in April. OPTrust is increasing its private equity allocation from 4% to 15%.

The Ontario Public Service Employees Union Pension Trust has hired William Hatanaka as chief executive officer.

Hatanaka replaces OPTrust interim co-CEOs Maurice Gabay and Scott Campbell, who have shared the role at the $14 billion pension system since April following the termination of former CEO Stephen Griggs. Griggs’ departure after only 11 months as OPTrust’s first-ever CEO has led to a lawsuit he filed in June claiming wrongful dismissal and seeking more than $2 million in compensation from the pension system.

Hatanaka joins OPTrust from TD Bank Financial Group, where he was group head of wealth management and a member of the bank’s senior executive team. He previously held senior positions at the Royal Bank of Canada and two independent Canadian brokerage firms.

William
Hatanaka,
CEO, OPTrust

OPTrust has increased its target allocation for private equity to 15 percent, up from the previous target of 10 percent, according to the system’s 2011 annual report. Private equity accounted for 3.3 percent of the pension system’s total assets at the end of 2010 and 4 percent at the end of 2011.

During 2011, OPTrust’s private equity portfolio generated a return of 11.3 percent, down from 24 percent in 2010 but above the 0.2 percent benchmark return for 2011. The pension system’s year-to-date returns for 2012 have been “outstanding”, chief investment officer Morgan Eastman told Private Equity International.

OPTrust’s private equity strategy involves committing to between 20 and 25 general partners and making direct co-investments. In April, OPTrust exited its first-ever direct co-investment, made in securities lending business Data Explorer’s Group alongside UK-based Bowmark Capital in 2007.

OPTrust’s primary investing programme aims to invest roughly 40 percent in Europe, 40 percent in North America and 20 percent in Asia and other emerging markets.

The pension system’s private’s markets group is led by group head and managing director Kevin Warn-Schindel.