Ontario Teachers' pension plan assessing 'Brexit' risk daily

Wed Mar 30, 2016 2:45pm EDT
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By Matt Scuffham

TORONTO (Reuters) - The Ontario Teachers' Pension Plan, one of the biggest investors in British infrastructure, said it is assessing daily the risk that Britain will leave the European Union and is considering hedging the currency risk on its investments.

Ontario Teachers', Canada's third-largest public pension plan, led a consortium of investors that purchased London City Airport for about 2 billion pounds ($2.9 billion) last month. It also owns Britain's High Speed One Channel Tunnel railway link and its National Lottery operator.

Bjarne Graven Larsen, the pension plan's chief investment officer, said it remained committed to investing in Britain in the long-term regardless of the outcome of the June 23 "Brexit" referendum, but has concerns over the short-term currency risk.

Sterling has fallen by nearly 10 percent against the Canadian dollar since the referendum was announced in February.

"It's a risk and we have to try and figure out how that risk will play out. We have people looking at it on a daily basis, but it's not something that will make us stop investing in the UK long term," Larsen told reporters on Wednesday.

Reuters reported earlier this month that some of Canada's top pension funds were holding back on deals until after the British vote.

Ontario Teachers', which administers pensions for 316,000 retired and working teachers in Canada's most populous province, on Wednesday reported a 13 percent investment return for 2015. That compared with an 11.8 percent return in 2014.

The pension plan said its net assets grew to a record C$171.4 billion at the end of 2015 from C$154.5 billion a year earlier.   Continued...