OMERS Announces 15.7% Net Return and $16.4 Billion in Net Income for 2021
OMERS, the defined benefit pension plan for municipal sector employees in the province of Ontario, today announced a 2021 return of 15.7%, net of expenses, which equates to $16.4 billion of net investment income. This result exceeded the Plan’s absolute benchmark return of 6.6% by more than $9 billion. OMERS net assets grew to $121 billion at December 31, 2021.
“Our strategy of global diversification and a relentless focus on a portfolio of high-quality assets, delivered exceptional returns for our hard-working members in 2021,” said Blake Hutcheson, OMERS President and Chief Executive Officer. “We are pleased that we exceeded our benchmarks across all segments of our portfolio. And now we look to the future with deep, dedicated international teams and ample capital to deploy in support of our long-term strategies.”
Four key factors drove the outperformance relative to our benchmark:
Our portfolio of public equities returned 20.7%, reflecting a strong year in public markets.
Our private equity businesses grew earnings, both organically and through acquisitions. Private Equity returned 25.8%, which reflects higher valuations across our portfolio, including Ventures and Growth Equity, and the sale of one of our European service businesses during the year.
Our higher allocation to industrial real estate assets created value as demand grew for warehousing and logistics spaces, resulting from the strength of e-commerce. Our real estate assets earned a 15.9% return and our real estate business, Oxford Properties, continued to expand its global footprint.
Our infrastructure investments continued to deliver positive and consistent returns, earning 10.7% in 2021, underscoring our long-term strength in this asset class.
For more detail, please refer to the asset class table below.
Also in 2021, OMERS announced a net-zero greenhouse gas emissions goal across its portfolio by 2050, expanding on its initial commitment to reduce the portfolio’s carbon intensity by 20% by 2025.
“OMERS 10-year average net return now stands at 8.0%,” said Jonathan Simmons, OMERS Chief Financial & Strategy Officer. “Long-term returns have helped to improve the Plan’s funded status from 86% in 2012 to 97% today, while enabling OMERS to reduce our real discount rate by 50 basis points to 3.75% over the same period.”
This past year also brought OMERS to the cusp of an important milestone, as it prepares to mark its 60th anniversary this spring. “For six decades, OMERS has been providing secure, defined benefit pensions to our members. Our entire team is connected and inspired by the work we do in service of those who take care of our Ontario communities. We look forward to continuing to build a sustainable, affordable and meaningful plan for the next sixty years and beyond,” Mr. Hutcheson concluded.
Further detail on OMERS 2021 results is provided in our Annual Report, which is available .
Founded in 1962, OMERS is one of Canada’s largest defined benefit pension plans, with $121 billion in net assets as at December 31, 2021. OMERS is a jointly-sponsored pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over half a million active, deferred, and retired members. OMERS members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. Contributions to the Plan are funded equally by members and employers. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers and originating and managing a diversified portfolio of high-quality investments in public markets, private equity, infrastructure, and real estate.