The Ontario Teachers’ Pension Plan is reporting a total fund net return of four per cent for 2022, driven by strong returns from private equity and inflation-sensitive asset classes.
The pension fund exceeded its benchmark of 2.3 per cent, according to a press release announcing its annual results. Its inflation-sensitive asset portfolio — including commodities and natural resources — returned 19.2 per cent for the year, slightly above its 18.7 per cent benchmark. Allocations to infrastructure and private equity also exceeded expectations, generating returns of 18.7 per cent and 6.1 per cent, respectively.
Read: Ontario Teachers reporting 1.2% return in first half of 2022
“Our diversified portfolio demonstrated resilience in 2022 with excellent returns from our infrastructure, inflation-sensitive and private equity assets,” said Ziad Hindo, chief investment officer at the Ontario Teachers’, in a press release. “The changes made to the portfolio over the past few years addressed many of the challenges of high inflation. Assets correlated to inflation such as commodities, natural resources and infrastructure all performed well last year.”
In addition, the Ontario Teachers’ net assets grew to $247.2 billion, towards a goal of $300 billion in net assets by 2030. These results contributed to the plan being fully funded for its 10th consecutive year as at Jan. 1, 2023, with a $17.5 billion preliminary funding surplus.
The pension fund also added $3 billion in new green assets in 2022, with portfolio carbon emissions intensity down 32 per cent from its 2019 baseline.
Read: Ontario Teachers’ returns 11.1% for 2021, led by private equity investments