Sydney, Australia - OMERS, one of Canada’s largest defined benefit pension plans, is celebrating its 10th anniversary of successful investment operations in Australia.
Since opening an office in Sydney in 2014, OMERS has grown its investments in the country significantly, with deployments and a committed pipeline totaling more than AUD 10 billion. This includes more than AUD 4 billion deployed and committed by OMERS Infrastructure and more than AUD 5.7 billion of Australian office, residential and industrial real estate assets, including third-party assets, managed by Oxford Properties Group. OMERS also invests in Australian equities and fixed income.
“Over the past decade we have built and expanded our portfolio in Australia by investing in a diverse array of high-quality assets across various sectors, including infrastructure, real estate, credit, and private equity,” said OMERS President and CEO Blake Hutcheson. “Starting with strategic investments by OMERS Infrastructure and followed by Oxford Properties Group, our Australia operations continue to contribute to the growth and stability of OMERS and help us continue to deliver on the pension promise to our more than 628,000 members.”
Highlights of OMERS investment journey in Australia:
Strategic Infrastructure Investments: OMERS has been a key investor in vital infrastructure projects, including major transportation hubs, energy networks, and public utilities. These investments have enhanced the efficiency and sustainability of Australia’s infrastructure landscape.
Expanding Real Estate Portfolio:Through its real estate arm, Oxford Properties, OMERS has acquired and developed prime office assets, industrial, and residential properties in Sydney, Melbourne, and Brisbane. Oxford’s portfolio of ~1,400 new build-to-rent units developed via its Indi BTR platform, and its Parkline Place premium commercial development in Sydney – which is due to be completed later this year – are primary examples of this approach.
Commitment to Sustainability: OMERS is dedicated to incorporating sustainability principles into its investment strategy. In Australia, OMERS has championed sustainable practices, contributing to the country’s transition to a low-carbon economy.
"With a committed team in Sydney supported by our colleagues in Canada and around the world, OMERS has established a strong and dynamic presence in Australia,” said Christopher Curtain, Senior Managing Director, Head of Asia-Pacific, OMERS Infrastructure. “As we enter our second decade in Australia, we are excited about the future and look forward to continuing our journey of growth, innovation, and sustainability in this vibrant market."
“Our success in Australia is a testament to the strength of our local partnerships and the dedication of our team,” said Alec Harper, Head of Australia for Oxford Properties Group. “We have worked tirelessly to create value for our stakeholders, deliver exceptional real estate solutions, and contribute positively to the places where we operate. We are proud of what we have achieved and look forward to continuing to build our portfolio here.”
Earlier this month, OMERS Finance Trust (OFT) announced it has closed its AUD 750 million, 5-year AUD note. This marked OFT’s inaugural AUD offering.
Australia is OMERS fifth largest investment market.
About OMERS
OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over 600,000 active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers, and originating and managing a diversified portfolio of high-quality investments in bonds, public and private credit, public and private equities, infrastructure and real estate.
Let me begin with a little detour to the UK before I get to Australia.
Late last week, I was contacted a Bloomberg reporter who is thinking of writing a comment on Canadian pensions in the UK and whether UK pension funds should adopt the Canadian model.
He was a very nice chap, listened carefully to my comments, took lots of notes, and I was very clear that adopting the Canadian model would require adopting a governance model where UK pensions operate at arms-length from all levels of government.
This way they can attract and retain top talent (set competitive compensation) to internalize asset management across public and private markets, saving a bundle on fees and improve performance over the long run.
We then started talking about the success of the Canadian model, shifting assets to private markets where they have more control (including on ESG), investing with top funds all over the world and co-investing with them on larger transactions to reduce fee drag and maintain a healthy allocation to private equity and other private markets.
I also explained how platforms work and how many Canadian pension funds have joined top operators to create platforms where they invest in renewable energy and other infrastructure projects as well as real estate sectors like life sciences and student housing.
He then asked me straight out what about OMERS and Thames Water and the reputation hit they had there.
I was waiting for it and answered him directly.
I said both OMERS and BCI took a reputation hit on Thames and it wasn't the end of the world for both of them.
I explained that in a global portfolio of private assets, just like in a global portfolio of public equities and fixed income, there are bound to be some problematic investments at any given time, and Thames was definitely one of them which is why OMERS wrote it down earlier this year.
Thames Water is also highly regulated and highly scrutinized by the media.
I told him flat out that I blame Macquarie, the large Australian infrastructure firm, for most of the problems plaguing Thames today and said the regulators made it next to impossible for existing investors to work out a plan that makes it a viable long-term investment in the best interest of all parties involved.
Moreover, I told him to read my comment on OMERS mid-year results as I covered Thames and more with OMERS CEO Blake Hutcheson and CFO & CSO Jonathan Simmons and Blake tackled Thames head on.
What does this have to do with OMERS' investments in Australia?
My point is simple, over a long period of time, OMERS has been very successful investing outside of Canada, mostly in the US and Europe but also in the UK and Australia where regulations, laws and stable currencies entice OMERS and other large Canadian pension funds to invest in private and public markets there.
While the media loves focusing on problem areas, most of the investments have done exceptionally well over the long run.
In Australia, OMERS has invested in major infrastructure, real estate and other private assets.
For example, off the top of my head, I remember in 2022, OMERS acquired Australia's TPG Telecom mobile tower assets for A$950 million ($670 million). I covered that deal here.
Soon after that deal, OMERS acquired Stilmark, an independent Australian developer, owner and operator of mobile tower assets in a second tower investment in Australia. I covered that deal here.
But you can go back to 2016, when Borealis (now called OMERS Infrastructure) became an investor in Australia’s Port of Melbourne (see history here) and more energy deals there two years later.
Australia remains a very important country for all of Canada's large pension funds and OMERS has the team in place there to continue investing in large transactions.
It also has the right strategic partners to capitalize on investments as opportunities arise.
All this to say, as OMERS celebrates its 10-year mark investing in Australia, I look forward to the day where in 20 years they celebrate their 30-year anniversary investing in that country.
I leave you with some final thoughts from OMERS CIO Ralph Berg who posted this on LinkedIn earlier today:
Ten years in Australia marks a significant milestone in theOMERSinvestment story. I joined OMERS in 2013, and shortly after that our Sydney office opened with five infrastructure employees and no direct investments.
A decade later, Australia is our fifth-largest investment market. Our team there is now 22 employees strong, and we have strategically deployed more than AUD 10 billion into high-quality assets across infrastructure, real estate, credit, and private equity. Earlier this month, OMERS Finance Trust closed its inaugural AUD 750 million, 5-year note, with very strong demand from investors.
Thank you to Australia for the warm welcome we received back then, and for the incredible investments, partnerships, and relationships we have there today. I commend the OMERS and Oxford teams for their outstanding work in service of our members and look forward to further growth and success down under in the years to come.
Well said and there will be plenty of other opportunities to invest in Australia in years ahead.
Below, 9News reports on how Australia's Albanese government is cracking down on foreign investment, touting a new plan that makes sure foreign investors drive competition, contribute to net zero emission targets, benefit Australian workers, improve national security and resilience to economic shocks and give taxpayers value for money. The Treasurer also said red tape will be cut for existing foreign investors with a proven track record (Canada, take notes!!).