UPDATE 1-Ontario Teachers' Pension posts 10.9 pct return in 2013

Tue Apr 1, 2014 12:44pm EDT
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* Net assets rise to record C$140.8 billion

* Teachers' to focus on direct investing, new relationships

* Pension plan erases funding gap, notches C$5.1 bln surplus (Adds CEO comment on competition, deal opportunities, 50-year bond)

By Andrea Hopkins

TORONTO, April 1 (Reuters) - The Ontario Teachers' Pension Plan, one of Canada's biggest investors, said Tuesday it had a 10.9 percent rate of return on its investments in 2013, bringing net assets to a record C$140.8 billion ($127.6 billion).

The strong 2013 returns erased Teachers' funding shortfall. Preliminary results showed a C$5.1 billion surplus, the plan's first in 10 years. The fund's rate of return since inception in 1990 has been 10.2 percent.

Having notched a fifth year of double-digit returns on its investment portfolio, Teachers' said it planned new relationships, direct investing and one-off transactions as competition from other pension plans, private equity and sovereign wealth funds made it harder to find good deals.

"The reality is we're finding most of our opportunities in direct investing and one-off investments globally," Teachers' Chief Executive Officer Ron Mock told reporters.

As low interest rates made it difficult to find good value, Mock said Teachers' would focus on individual opportunities rather than broad asset classes.   Continued...