Delivering 7-11% Net Average Annual Investment Returns

OMERS strategy of investing in a high-quality portfolio of well-diversified assets protected our members’ retirement savings from the impact of challenging markets.

In 2018, the net investment return was 2.3%. This return did not achieve our absolute benchmark of 7.3%, because of the negative 8.3% return from public equity. However, our investment teams delivered positive growth, preserving capital and protecting members’ retirement savings, at a time when major equity, credit, bond and commodity indices were down.

Infrastructure, private equity and real estate extended their long track record of strong returns, which, along with positive returns in our fixed-income portfolio, buffered the impact of drawdowns in equity markets.

Our one-year and long-term track records are as follows:

Net Return History
  1-year 3-year 5-year 10-year 20-year
Net Return 2.3% 8.0% 8.1% 8.0% 6.6%

In 2018, OMERS teams invested $10 billion in private market assets in pursuit of the long-term asset mix targets approved by the OAC Board in the prior year. Over the last three years, teams also rotated $6.6 billion of capital out of low-yielding, long-dated government bonds into higher-yielding credit investments. This shift shielded our fixed income returns from the impact of rising interest rates, particularly in the U.S.

Since we launched the 2020 Strategy, OMERS has generated $4.1 billion of investment income above our discount rate.

Net Investment Return Summary
  2018 2017
Fixed Income 1.8% 4.3%
Public Equity -8.3% 14.7%
Private Equity 13.5% 11.1%
Infrastructure 10.6% 12.3%
Real Estate 8.7% 11.4%
Major Public Market Indices
  2018 Total Return
EQUITIES  
S&P TSX Composite (Canada) -8.9%
S&P 500 Index (US) -4.4%
MSCI World Equity Local -7.4%
BONDS  
FTSE TMX Canada Universe Bond Index (CAD) 1.4%
Barclays US Corporate High Index -2.1%
Net Assets

Over the long term, we remain committed to further diversifying our asset mix by adding high-quality, income-producing investments and gradually tilting the portfolio toward high-growth Asian markets. We believe that this approach will improve the return profile of the Plan and provide resiliency in our investment portfolio to mitigate the impact of a challenging investment environment, which we expect in the years ahead.

Asset Mix
Geographic Distribution
An Asset Liability Study will be conducted for the Plan in 2019. This Study will help to ensure that the asset mix is well-positioned in the context of the maturing liability profile and in accordance with OMERS risk appetite.
DOOR
Oxford invested in DOOR, a build-to-rent joint venture in the U.K. This venture involves 39% ownership of the portfolio of Get Living, U.K.’s leading privately backed residential company. Get Living has redefined the U.K. residential market by providing unrivalled service for residents, combined with accommodation developed to the highest standard. Oxford brings the considerable success and experience of its multi-family investments and operations in North America to the venture.
Paradigm
In 2018, OMERS acquired Paradigm Outcomes, a market-leading provider of complex and catastrophic medical management to the U.S. workers’ compensation industry. For more than 25 years, Paradigm has focused on improving health outcomes and lowering medical costs for complex cases. The company’s clinically driven comprehensive care management programs are geared toward delivering innovative solutions and better medical outcomes.