Canadian pension giant OMERS is teaming up with the world’s largest pension fund, Japan’s Government Pension Investment Fund, and the Development Bank of Japan in a co-investment deal.
The pension fund said Monday that its strategic investment arm, OMERS Strategic Investments (OSI), has entered into a co-investment agreement with Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, and the Development Bank of Japan (DBJ). The agreement sets out a framework under which GPIF and DBJ may participate in investment opportunities that are sourced and actively managed by OMERS.
“We value this strategic relationship as we continue to build trusted partnerships and extend our reach to attract investment opportunities globally,” said Jacques Demers, president and CEO of OSI.
Initially, the Japanese investors are pledging US$2.5 billion to the Global Strategic Investment Alliance (GSIA), which is a co-investment program developed by OMERS that utilizes the expertise of OMERS infrastructure investment arm, Borealis Infrastructure. This latest contribution brings the total capital committed to the GSIA to US$11.25 billion.
“The participation in the GSIA by GPIF and DBJ, alongside our other GSIA members including the Pension Fund Association of Japan and a consortium led by Mitsubishi Corporation provides a strong endorsement of both OMERS strategy of developing third-party capital relationships with like-minded institutional investors as well as the investing strength of our infrastructure arm,” said George Cooke, chair of the board of directors of OMERS Administration Corporation.
For 2013, OMERS reported a 6.5% return, with strong public equity and private market returns dampened by weakness in bonds and commodities. During the year, Borealis Infrastructure generated a 12.4% return, and OSI returned 9.1%, among its various private market investment entities.