Ontario Teachers’ posts 9.4% return in 2024, driven by gains in credit and venture growth
Ontario Teachers’ Pension Plan Board reported a one-year total-fund net return of 9.4 percent for 2024, up from 1.9 percent in 2023.
Net assets increased to $266.3bn from $247.5bn.
The return reflects investment income of $23.7bn and member and employer contributions of $4.3bn, partially offset by $8.1bn in benefits paid and $1bn in administrative expenses.
As of January 1, the plan is fully funded for the 12th consecutive year, with a preliminary funding surplus of $29.1bn.
Ontario Teachers’ President and CEO Jo Taylor said the return was “significantly above the outcome for 2023” and attributed it to “positive contributions from across the plan, with notable success in venture growth, credit, inflation-sensitive and public equity investments.”
The return underperformed the benchmark of 12.9 percent by 3.5 percentage points, representing $7.6bn in negative value add.
Ontario Teachers’ stated that the underperformance was mainly due to private equity and real estate returns falling below their respective benchmarks.
The fund gained $6.9bn from foreign currency, largely driven by US dollar appreciation.
Ontario Teachers’ noted that its net exposure to the US dollar remains significantly larger than other currencies.
Ontario Teachers’ reported long-term annualized total-fund net returns of 6.9 percent over five years, 7.4 percent over 10 years, and 9.3 percent since inception in 1990.
2024 portfolio returns by asset class:
|
Asset Class |
Actual Return |
Benchmark |
|---|---|---|
|
Public equity |
23.20% |
25.8% |
|
Private equity |
11.70% |
23.7% |
|
Venture growth |
25.80% |
29.2% |
|
Fixed income |
4.80% |
4.8% |
|
Commodities |
25.20% |
25.2% |
|
Natural resources |
13.30% |
15.0% |
|
Inflation hedge |
9.80% |
9.8% |
|
Real estate |
-0.70% |
5.0% |
|
Infrastructure |
9.10% |
8.5% |
|
Credit |
17.20% |
16.8% |
Source: Ontario Teachers’ Pension Plan Board
Ontario Teachers’ manages about 80 percent of its assets internally, using a mix of active and passive strategies. Its net investments reached $260.9bn in 2024, compared to $243.9bn in 2023.
2024 portfolio mix by asset class:
|
Asset Class |
$bn |
% |
|---|---|---|
|
Public equity |
37.4 |
14 |
|
Private equity |
60.4 |
23 |
|
Venture growth |
10.4 |
4 |
|
Fixed income |
78 |
30 |
|
Commodities |
28.9 |
11 |
|
Natural resources |
12.5 |
5 |
|
Inflation hedge |
12.6 |
5 |
|
Real estate |
29.4 |
11 |
|
Infrastructure |
43.2 |
17 |
|
Credit |
37.2 |
14 |
|
Absolute return |
24 |
9 |
|
Funding and other |
-113 |
-43 |
|
Total Net Investments |
261 |
100 |
Source: Ontario Teachers’ Pension Plan Board
In 2024, investment highlights included acquisitions and exits across Europe, New Zealand, Canada, and Asia.
Ontario Teachers’ reported logistics acquisitions in France and Germany through its Boreal IM joint venture, a merger of Fairstone Bank of Canada with Home Trust Company, and the sale of Shearer’s Foods.
It also invested in Omega Healthcare, Instagrid, Max Matthiessen, and SmartHR.
Executive leadership changes in 2024 included appointments of Mabel Wong as chief financial officer, Stephen McLennan and Gillian Brown as chief investment officers, and Jonathan Hausman as chief strategy officer. Kevin Kerr was named executive managing director, Portfolio Solutions.
Bernard Grzinic, Steve Saldanha, and Robert Sturgeon joined the investment senior leadership team.
Chief Operating Officer Tracy Abel retired after 37 years.
Ontario Teachers’ also announced plans to close its Hong Kong office, shifting focus to operations in Singapore and Mumbai.
By the end of 2024, Ontario Teachers’ met its interim climate target a year ahead of schedule, reporting a 49 percent reduction in portfolio emissions intensity from its 2019 baseline.
