February 24, 2012 / 11:39 PM / 6 years ago

OMERS eyes private market deals in Europe, North America

TORONTO (Reuters) - The Ontario Municipal Employees Retirement System, one of Canada’s largest pension fund administrators, expects to do as many as three major acquisitions this year for its private markets portfolio, its chief executive said on Friday.

CEO Michael Nobrega told Reuters in an interview that acquisitions by OMERS could be in any of the key private market sectors of private equity, infrastructure, or real estate.

“My hope is that we will probably do two or three major deals this year, and it will probably be in Europe somewhere and in North America,” Nobrega told Reuters after OMERS reported 2011 results showing net assets at a record C$55.1 billion ($55.1 billion), up 3 percent over a year ago.

OMERS has been a major buyer of private market assets for over a decade, accelerating the pace of acquisitions after the onset of the global economic crisis of 2008-09.

In 2011, OMERS bought V. Group, a Scottish shipping services company for $520 million and joined with Berkshire Partners to buy Husky International, a Canadian injection molding company, for C$2.1 billion, among other deals.

The fund’s private market portfolio generated a return of 8.2 percent in 2011, outperforming benchmarks across asset classes. Returns from the public market portfolio were down marginally.

Nobrega expects returns to continue to grow from the private market portfolio as assets mature.

“A lot of the assets under construction are coming to fruition both in real estate and the infrastructure area,” said Nobrega, describing 2011 as a breakthrough year for investments made years ago. “This is probably the first year that we don’t have a lot of construction on the way.”

Nobrega said OMERS would be disciplined and play to its strengths in the markets it knows best, including the United States, Britain and Canada.

He said the fund might do deals in emerging markets too, but only with partners. He pointed to Singapore, Chile and Brazil as markets where OMERS has good relationships in emerging markets.

Nobrega said the fund was looking at having its own physical presence in Asia by 2014.

Additional reporting by Shounak Dasgupta in Bangalore; editing by Rob Wilson

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