A year after it came into existence, the Investment Management Corp. of Ontario began managing the assets of its first two clients yesterday.
Established in 2016 and modelled after organizations such as the Alberta Investment Management Corp. and the British Columbia Investment Management Corp., IMCO will manage the assets of the Ontario Pension Board and the Workplace Safety & Insurance Board. The two funds have a combined value of about $60 billion, with assets invested across a range of classes including public equities, public debt, private equity, real estate and infrastructure.
“This is an exciting day for the group of people who have been working hard over an extended period of time to make IMCO a reality. The board is confident that IMCO will have a major impact on public fund management in Ontario,” said David Leith, chair of the board of directors.
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While the Ontario Pension Board and WSIB are the first two clients, IMCO says the funds of Crown corporations, agencies, boards, commissions, universities and municipalities may also join. Headquartered in Toronto, it operates as a member-based non-share capital corporation and is independent of the government.
While the corporation will be responsible for managing the Ontario Pension Board’s assets, the pension fund will continue to own them and maintain control over its strategic asset mix. At the same time, the plan’s assets and liabilities will remain separate from the WSIB and any other members of the new corporation.
The Ontario Pension Board administers Ontario’s public service pension plan, which has 41,000 active and 43,000 former and retired members. It notes its investments and investment finance staff have moved over to IMCO, including Jill Pepall to serve as the new organization’s first chief investment officer and Michel Paradis as its first chief financial officer.
Heading up IMCO as chief executive officer is Bert Clark, who previously led Infrastructure Ontario. The province established the investment body following the recommendations of Bill Morneau, now the federal finance minister, in a report he penned as a pension investment advisor to the province in 2012. He estimated Ontario’s public sector pension funds could save up to $100 million a year through a pooled investment body.
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“We believe asset pooling will allow us to earn higher returns than we could on our own and is in the best interest of our plan beneficiaries and stakeholders. Pooling our assets under IMCO’s management will provide us with the scale we need to achieve cost efficiencies and to invest directly in a diverse range of high-quality investments,” said Ontario Pension Board president and chief executive officer Mark Fuller.