OMERS sees buyers market in 2012

Fri Jan 13, 2012 1:45pm EST
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By Andrea Hopkins and Pav Jordan

TORONTO (Reuters) - When Michael Nobrega talks about the cash crunch facing governments around the world this year, he sees big potential where others see financial crisis.

As chief executive of the C$54 billion ($53 billion) Ontario Municipal Employees Retirement System, or OMERS, Nobrega sees a golden opportunity as cash-strapped jurisdictions in Europe and the United States struggle to fund projects.

"We tend to strive a great deal when the markets are down because the opportunities are greater," Nobrega said in year-end interview.

But even as he talks of "three or four" mid-sized deals OMERS is mulling in Europe, he admits he frets about the monthly liabilities the fund faces as its 400,000 members retire.

Keeping the fund growing while members draw out pensions has pushed OMERS to explore funding ignored by Canadian peers such as the Ontario Teachers' Pension Plan, boosting voluntary contributions and selling investment expertise to smaller funds.

It's a strategy that Nobrega hopes will allow OMERS to punch above its weight, but one that experts also say may detract from the fund's primary focus.

"Trying to manage third-party money is really a recognition that their fund size is tapering off," said John Ilkiw, a pension expert with Paros Consulting and a former senior vice-president at the Canada Pension Plan Investment Board.

"That's a risky strategy in my view - that's not to say it can't work, but you're trying to be all things to all people."   Continued...