TORONTO (Reuters) - Canadian pension plan OMERS said on Friday it generated a 10 percent return in 2014 on the back of big gains in investments in public and private markets, and it plans to make a gradual shift in its portfolio asset mix over the next 3 to 5 years.
OMERS, or the Ontario Municipal Employees Retirement System, said net assets rose to C$72 billion ($57.71 billion) at the end of 2014, from C$65.1 billion at the end of 2013.
The company is seeing momentum in infrastructure investments and also recorded higher investment returns in its real estate and private equity segments.
"My own view is that the story will continue to be around the alternative asset space," Chief Executive Michael Latimer said at a press conference. "And that is a reflection of the flow of capital."
Alternative assets from office buildings to rare stamps, or infrastructure assets to artwork, are typically less liquid and harder to value than publicly traded assets, but they allow big investors like pension funds to diversify their portfolios and avoid the perils of market volatility.
The pension fund manager said its public-sector investments returned 10.7 percent on the back of strong bond prices, while its private market investments returned 9.5 percent on the year.
Its portfolio in 2014 was 58 percent in the public markets and 42 percent in private investments.
Latimer expects that to eventually shift to 53 percent in the public markets and 47 percent in the private markets. That target portfolio asset mix could be realistically achieved over the next 3 to 5 years, he said.
"We are still trying to migrate to what we describe as our target mix," Latimer said. "We are not there yet, but we're very comfortable with the progress that we've made in getting there."
OMERS, which has over 450,000 members, said it received some C$3.7 billion in contributions from plan members and employers in 2014, and paid out C$3.1 billion in benefits.
Reporting by Euan Rocha and John Tilak; Editing by Peter Galloway and Nick Zieminski