The Healthcare of Ontario Pension Plan has invested more than half of its assets in Canadian holdings and that is not about to change despite the threatening economic climate, its leaders say.
“We remain committed to Canada,” chief investment officer Michael Wissell said in a recent interview with The Globe and Mail. “There’s a hometown advantage because we don’t have any currency hedging or other exogenous risks.”
At the same time, Mr. Wissell and HOOPP chief executive officer Jeff Wendling say the pension’s liquidity will allow it to invest globally when the current trade chaos creates attractive investments.
“At some point, there will be opportunities in this, right?” Mr. Wendling said. “We don’t know what the endgame is here with President Trump. Is this part of trying to negotiate a different agreement? Is it really severing this free-trade arrangement that we’ve had for many years, which would be an incredible change?”
HOOPP, which manages pension investments for more than 478,000 members at more than 700 employers in Ontario’s hospital and health care sector, posted a 9.7-per-cent return last year, net of its investment costs. The return beat its internal benchmark of 8.7 per cent, after falling short by a full percentage point in 2023.
The plan closed the year with assets of $123-billion, up from $113-billion at the end of 2023.
For 2024, public equities led the way with a return of 17.9 per cent, while the pension’s private equity, infrastructure and private credit classes all returned between 11 and 13 per cent.
The plan’s fixed income/bonds portfolio returned 1.9 per cent. Real estate lagged at 1.4 per cent, but still posted a better return than in 2023, when it lost 6.5 per cent. (HOOPP does not release its benchmarks for specific asset classes.)
HOOPP said high interest rates continued to adversely affect real estate values. Strong performance in its industrial properties globally was offset by weakness, specifically in Southern California. While most of its best office properties gained value, it needed to continue writing the value of U.S. properties as well as its second-tier offices.
HOOPP said roughly $60-billion of its assets at year-end were in Canada, and two-thirds of that – about $40-billion – was in Canadian government bonds. With the bond market pricing in continued rate cuts in Canada, the bonds have gained value in 2025 and pushed the Canadian proportion of the portfolio above 50 per cent, Mr. Wissell said.
“At the same time we need to be diversified, and a good example of that is happening in real time right now, where European equities are performing quite a bit better than some of the North American equities,” he said. “We want to go into any sort of near-term hiccups that might occur over the next little while.”
HOOPP’s board approved benefit increases for its members and a cost-of-living adjustment in 2024. It also used new research published by the Canadian Institute of Actuaries to increase its estimate of the benefits it must pay members in the future, owing to longer life expectancies for its members.
The actuarial change helped cause its funding ratio – its assets, compared with its future pension obligations, or liabilities – to slip for a second straight year. The plan closed 2024 at a funding ratio of 111 per cent, versus 115 per cent at the end of 2023, and 117 per cent for 2022. Mr. Wendling says the actuarial change contributed about three percentage points to the decline.
Barbara Shecter of the National Post also reports tariff war challenges Canadian pension funds to maintain their momentum:
Pension funds that were buoyed by soaring stock markets and growing economies that helped produce double-digit returns last year are now being challenged by the escalating trade war between the United States and Canada that is spilling out globally.
“The U.S. economy has been very strong for so long,” Jeff Wendling, chief executive of the Healthcare of Ontario Pension Plan (HOOPP), said. “Will that continue? What will happen with inflation? We run a lot of scenarios.”
Some economists are predicting the U.S. could enter a recession amid the trade war with Canada, Mexico and China, as well as steep cuts to its federal workforce and potentially rising inflation. U.S. stock markets, meanwhile, have been falling amid the turmoil after a strong 2024.
HOOPP, which provides retirement benefits for Ontario health-care workers, reported a 9.7 per cent return on Wednesday for the year ending Dec. 31, 2024. Net assets rose to $123 billion. With the exception of real estate and fixed income, all segments, including private equity and credit as well as infrastructure, turned in double-digit returns last year.
“We do try to build a portfolio that we think is well exposed to different factors and can be resilient,” said Wendling, who has announced he will retire in April.
His successor, Annesley Wallace, will inherit a different set of circumstances than Wendling did five years ago, though he took the reins at HOOPP just as the economic impacts of the COVID-19 pandemic were setting in.
Michael Wissell, HOOPP’s chief investment officer, said the fund’s diversification by asset class and geography positions it to manage upheaval, from pandemics to the current trade-driven uncertainty.
For example, he said the fund is invested in European equities, which were lagging U.S. markets but have begun to outperform.
“When you go into a moment in time that might be particularly chaotic, if you’ve entered into it with a really diversified portfolio and high liquidity, you just start to take advantage of these situations,” he said.
HOOPP opened an office in London last June to increase exposure to partnerships in the United Kingdom and Europe.
Still, the fund remains heavily connected to Canada and its economic fortunes. More than $60 billion of HOOPP’s assets — 50 per cent — are invested in Canada and the fund is one of the biggest investors in Canadian bonds, with more than $40 billion in total government bond holdings at the end of December.
Wendling said Mark Carney replacing Prime Minister Justin Trudeau is good for the country because it brings some stability to Ottawa.
“It looks like we’ll probably have an election sooner than we might have otherwise,” he said. “That’s probably a good thing to get some clarity one way or another so as we try to deal with what’s going on in the U.S., we have a new leader with a mandate.”
Wendling said that although Carney, former governor of both the Bank of Canada and the Bank of England, is known to Bay Street, HOOPP’s management is “agnostic” when it comes to which party governs.
But one thing on his wish list for whoever takes the reins in Ottawa next is the return of real return bonds.
In late 2022, the Liberals announced they would stop issuing the popular bonds, which helped pension funds that pay out inflation-indexed benefits balance their assets and liabilities.
The government’s rationale that there was low demand for the bonds was quickly dismissed by senior pension officials, who were outspoken about efforts to get the government to reverse its decision.
Nothing came of those efforts, but Wendling said he hopes whoever is in charge of the next government will reconsider.
“We’re hopeful,” he said. “We were big buyers of Canadian real return bonds.”
Today, HOOPP released its 2024 results posting a 9.7% gain a funded status of 111%:
Toronto, March 12, 2025 - The Healthcare of Ontario Pension Plan (HOOPP) announced today that it delivered a 9.7% return in 2024. Net assets were at $123 billion (as of Dec. 31, 2024), up from $112.6 billion in 2023. The Plan’s funded status remains strong at 111%, continuing HOOPP’s long history of ensuring stability for our members, now and in the future. This means for every dollar owed in pensions, the Plan has $1.11 in assets.
The 2024 funded status takes into account some important initiatives brought in during the year that improved members’ pensions: the HOOPP Board of Trustees approved a benefit formula improvement for eligible active members who had service in the Plan in 2023, and retired and deferred members received a full cost of living adjustment (COLA).
In keeping with new research published by the Canadian Institute of Actuaries, HOOPP has also increased its pension liabilities to reflect that Canadians – including our members – are expected to live and draw from their retirement savings for a longer period in the future. While this change led to a decrease in the Plan funded status, it provides an important updated view of future obligations, which helps HOOPP deliver the pension promise.
“At HOOPP, we are dedicated to ensuring our members have peace of mind when it comes to planning for their retirement,” said Jeff Wendling, HOOPP’s President and CEO. “A realistic understanding of pension liabilities and future obligations allows the Plan to be prepared to fulfill our pension promise for years to come.”
2024 was a unique time in the economy, with large fluctuations in the markets and global geopolitical instability.
Over $60 billion of HOOPP’s assets – 50 per cent – are invested in Canada. HOOPP is one of the biggest investors in Canadian bonds, with over $40 billion in total government bond holdings as of Dec. 31, 2024.
Canadian bonds remain the backbone of the Fund’s investing strategy. As markets fluctuate, bonds serve as liquid collateral, which supports other investments. Having liquidity also allows HOOPP to continue diversifying its portfolio across asset classes and geographies.
“As I like to say, HOOPP is a buyer when others are sellers,” said Michael Wissell, HOOPP’s Chief Investment Officer. “As a result of our focus on ensuring liquidity, the global economic volatility we saw in 2024 was an opportunity for us rather than a barrier to success.”
Operational advancements were also a highlight of 2024 for HOOPP, with the creation of an internal investment Centralized Relationship Management (CRM) system. The new CRM system consolidates external party information and interactions across our investment portfolios.HOOPP also built out our Artificial Intelligence (AI) lab where we are testing potential use cases and challenges associated with this new technology.
Advancements like the CRM system and AI lab support HOOPP’s continued growth, allowing the Plan to make more informed and data-driven decisions, ultimately leading to better outcomes for our members. Despite these significant advancements, HOOPP’s operating costs remain one of the lowest among the Maple 8 at 0.4%.
“HOOPP continues to evolve our operations to align with the growth of our Plan assets and our membership,” added Wissell. “Being able to perform at our best as investment professionals requires a lot of teamwork from our internal partners who are working with and developing these new technologies.”
Other highlights from the year included:
- London office: Our London office opened in June 2024, giving the Plan space to grow and cultivate meaningful and scalable partnerships with UK and European entities.
- Employer growth: The Plan grew by an additional 32 employers since the end of 2023. Many of the new employers are from the small healthcare space, including hospices, mental health clinics and community services organizations.
- Member growth: HOOPP now has more than 478,000 active, deferred and retired members.
- Opening the Plan to physicians: The Plan announced that incorporated physicians would be eligible to become members of HOOPP as of Jan. 2, 2025.
- Retirement security research: HOOPP continues to conduct important research that advocates for increasing pension access and retirement security for all Canadians, including a report with the Conference Board of Canada that looked at the economic impact of defined benefit pensions in Ontario.
About the Healthcare of Ontario Pension Plan
HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 700 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, and many others who provide valued healthcare services. In total, HOOPP has more than 478,000 active, deferred and retired members.
HOOPP is fully funded and manages a highly diversified portfolio of more than $123 billion in assets that span multiple geographies and asset classes. HOOPP is also a major contributor to the Canadian economy, paying more than $3 billion in pension benefits to retired Ontario healthcare workers annually.
HOOPP operates as a private independent trust, and its Board of Trustees governs the Plan and Fund, focusing on HOOPP’s mission to deliver on our pension promise. The Board is made up of appointees from the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses’ Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU), and the Service Employees International Union (SEIU). This governance model provides representation from both employers and members in support of the long-term interests of the Plan.
On Monday, I had a chance to discuss HOOPP's 2024 results with outgoing CEO Jeff Wendling and CIO Michael Wissell.
Let me begin by thanking them and also thank Scott White and Jackie Emick for setting up the Teams discussion and sending me material beforehand to review (on an embargoed basis).
Before I get to my discussion with them, a few of the 2024 highlights:
- Positive returns were supported by solid performance in public and private equity markets, as well as investments in infrastructure.
- We maintained a large position in inflation-protected investments such as Canadian real return bonds, and U.S. treasury inflation-protected securities. The value of these securities rises with inflation, helping to preserve purchasing power.
- Our holdings crossed $1 billion in Canadian federal, provincial, and municipal green and sustainable bonds. Learn more about HOOPP’s climate change strategy on the Climate Change page on hoopp.com.
And a message from outgoing CEO Jeff Wendling:
On behalf of everyone at HOOPP, I would like to say thank you to our members in the healthcare sector. Your commitment to Ontario communities continues to drive us forward in our mission to deliver on our pension promise.
I’m pleased to report that our Plan remains strong, with a funded status of 111% at year-end. In other words, for every $1 we owe in pensions, the Plan has $1.11 in assets. This shows that the Plan is in an excellent position to continue paying pensions now and in the future.
In 2024, HOOPP was also able to provide a pension benefit improvement for active members and a full cost of living adjustment for retired and deferred members, while keeping contribution rates stable. As well, we continued to grow the Plan with increases in members and employers, and we found new ways to support our members. You can keep reading our highlights to learn more.
As announced last year, I will be retiring at the end of March. Looking back, I am extremely proud of HOOPP and what we have accomplished in my five years as President & CEO, and more than 26 years with the organization. We have built a world-class pension organization that puts members first while managing risk and navigating financial market conditions to successfully protect and grow the Plan.
Looking forward, I am very confident in the future of HOOPP. With Annesley Wallace being named as my successor, along with the incredible team already in place, our members can have peace of mind knowing that their pension will remain secure.
Again, thank you, it has been a privilege to serve you for so many years.
Now, needless to say Jeff Wendling and his predecessor Jim Keohane have a lot to be proud of but here is the ultimate measure of their success:
As always, please take the time to read HOOPP's 2024 Annual Report for more details, especially the message from the Chair and Vice-Chair, Dan Anderson and Gerry Rocchi and CEO Jeff Wendling.
Jeff ends his message in the annual report on a very nice note:
After spending so much of my career at HOOPP, I recognize that what drew me here and what kept me inspired is our goal to provide Ontario healthcare workers with retirement security. It is at the core of everything we do. As the organization has grown and evolved over the years, our focus on members has never changed. Delivering on our pension promise has helped HOOPP become one of the top- performing pension plans in the world.
As I step away from the organization,I want to thank Ontario’s healthcare workers, who continue to take care of us. I also want to thank our Board of Trustees for its guidance and support, and our Executive Team for its leadership. Finally, I want to say to all HOOPP staff: You are and always will be HOOPP’s greatest strength. I appreciate your hard work and unwavering dedication to serving our members.
While I leave HOOPP with mixed emotions, I do so with great confidence, knowing that the organization is in very capable hands with Annesley at the helm. Her experience and leadership, combined with the strong team HOOPP already has in place, mean the future is bright and our members can enjoy peace of mind knowing their pension will remain secure.
Alright, let me get to my conversation or else this will be another monster comment and my wife will kill me for staying up late to finish it.
Conversation with outgoing CEO Jeff Wendling and CIO Michael Wissell
Jeff Wendling began by giving me an overview of the 2024 results:
You've seen the results, it was a good year for HOOPP in terms of return, the assets hit an all-time high of $123 billion at the end of 2024. Our funded ratio was very strong, we had positive value add as well so all in all, strong year, the fund is in a strong position.
We are in a good position to meet the pension promise to our members.
We did a few things last year that brought our funded ratio lower. We did a benefit improvement last year. We also paid full COLA (cost-of-living adjustment) to our members. We also adopted the new Canadian Institute of Actuaries mortality scale which reflects the fact that Canadians are living longer as our members are living longer. We took that in, that was about a 3% increase in our liabilities but we think that was the right thing to do. And again HOOPP is in a strong funded position so we are very pleased with the results in 2024.
Interestingly, I mentioned to Jeff that I saw on LinkedIn there were over eight HOOPP members over 100 years old and he and Michael correctly pointed out that it's more than that (roughly 125 are more than 100 years old) which is one reason their liabilities are going up:
I shifted my focus to investments and noted that unlike its peers, HOOPP managed to eek out a positive return in Real Estate and asked Michael if that's because the Fund is more exposed to Industrials.
He responded:
To be honest, Leo, I'd say we are very diversified. Fortunately, we have less Office and Retail (Jeff interjected to say "historically we have more Industrial and logistics than our peers plus Office and Retail).
I wouldn't say that's are only focus, we are building a diversified real estate portfolio. The intra real estate returns can show quite a dispersion between Office and Industrial for example. That diversified approach has served us well and has been in place for a long time.
I pressed Michael on how HOOPP managed to post positive returns last year in Real Estate when all their peers posted negative returns and he answered:
Because of that diversification. If you're concentrated in a segment and that segment is hit hard then obviously it's gong to impeded your returns. We are seeing this rollout of the higher cost of capital that started several years ago works its way through. I think our Real Estate return and I would suggest others as well are going to start to see better returns going forward. We think we are through the worst of this and we are seeing some green shoots appearing in our Real Estate portfolio, as you alluded to a positive return. We are a little more constructive than we have been in the last little while as we worked through the rate shock that occurred a few years ago. It's working its way through.
I then asked Michael about Public Equities, Private Equity and Infrastructure all of which posted solid returns last year along with Private Credit:
We remain incredibly committed to Public Equities and Public Markets. While we've been growing our Private Markets over the last few years -- for example Infrastructure -- we are doing within the construct of Public and Private assets working together, not Publics vs Privates.
That approach has served us well because we still had a relatively meaningful component to Public Equities last year and obviously with strong returns globally, that really helped us.
I think our approach isn't Publics vs Privates but how they can work in concert together to build a robust, diversified portfolio.
Infrastructure had a good year as you know. That started in 2019 under Jeff's leadership (when he was CIO just prior to becoming CEO in 2020). That's continued to do well.
Our Private Credit business had a strong year. That only became a formal part of our portfolio in 2023, we had been doing it before, again under Jeff's leadership, we put it back in the policy portfolio.
Jeff interjected to state this:
We've been in Private Credit for quite a few years, we weren't late to that game but we formalized it in our Policy Portfolio last year (or 2023) so that has been scaled up and again, that's been a good program from the get-go.
I told Jeff I remember HOOPP doing specific private credit deals loaning money to companies in when Jim (Keohane) was there where there was a good risk-return reward to loans, they just didn't call it Private Credit.
I asked Jeff and Michael if the approach in Infrastructure which is still being ramped up is still fund investments and co-investments on larger transactions.
Jeff responded: "The majority is fund investments and then there are big co-investments we do with our partners."
Michael added this:
One of those co-investments was a big driver of our return in Infrastructure last year. It is that tried and true model using GPs and then gaining access to specific co-investment opportunities.
Definitely a partnership approach in Infrastructure here at HOOPP as it is in Private Equity and Private Credit as well.
Now, in Private Equity, Jeff noted they do some true direct at times whereas Infrastructure is more co-investments right now.
He added: "Private Equity is about 60% in the US, 30 somewhat percent in Europe and we had a very large PE investment in Canada but we sold that a couple of years back."
Jeff also explained that they opened up an office in London, England to really support their private assets."We were the last plan to open up a foreign office, we only have one and the idea is as Michael said to increase the size of the funnel. More boot son the ground, we can see better opportunities and also do better due diligence on the investments we have there."
As I stated when AIMCo shuttered its New York and Singapore offices, if there is a business case to be made to open up a foreign office, and the results are there, then it sure beats farming out assets to funds and paying huge fees.
Jeff agreed and reiterated being there will help them find better opportunities, oversee their investments there better and ultimately help build a more globally diversified portfolio which delivers solid returns.
I shifted my attention to Public Equities and asked if they had a value tilt there.
Michael shared this:
The bulk of our Public Equities return is driven by the main public market indices. The key to the Public Equities return is diversification across countries which is serving us well again this year only in the reverse direction from last year. We are not trying to predict ho the winners will be next year but building a diversified robust portfolio is really our approach.
I would argue that Private Equity has more of a value tilt from that perspective as you're dealing with companies that are robust through an economic cycle.
In Public Equities it's all about geographic diversification with a particularly high focus on developed market economies, proportionally very small allocation to emerging markets.
Jeff added: "In the US, for example, we have a big beta position in the S&P 500. So we are going to get some exposure to the Mag-7 there but it's basically broad indices that are getting our beta exposure from."
They add alpha on their beta exposure through external hedge funds and internal absolute return strategies.
As Michael said: "We had a strong year for value add last year, one percent of the Fund through exactly those activities you are referring to among others."
I asked them how they are playing the tariff tantrum noting that I see this as a manufactured crisis by President Trump to enrich elite funds.
Jeff said they do not think tariffs are good for anyone over the long run and they do not know if this is part of a negotiation strategy or what it might be.
He added:
I would say we entered this period in a very strong funded position, with a well diversified portfolio, lots of liquidity. As you know, part of our ammo if you look back to the tech wreck, the GFC, and now this, if we see valuations get attractive, we will seize opportunities and that has served us well over the long run.
And again, we are long term investors, we will hold most of our assets past this term but again right now, we are pleased with our diversification, our liquidity and we are vigilant for finding opportunities.
Michael added this:
As Jeff alluded, managing that liquidity is really key for us. HOOPP has a long track record for being very liquid so e can avail ourselves to those opportunities (Jeff interjected:"we don't want to be forced sellers, we want to be opportunistic buyers").
I noted that Michael has to sit with his Public Market team and Private Market team to gauge the best risk-reward opportunities over the next three to five years.
He told me they have one balance sheet, they don't work in silos, they have a coordinated approach and are constantly communicating where they see the best opportunities relative to risk.
He added: "At this point, it's starting to get interesting but not quite there yet."
Embarrassingly, I forgot Annesley Wallace's name at that point of our discussion but asked when the new CEO is coming in.
Jeff told me Annesley started as CEO designate on March 1st and she officially becomes CEO on April 1st.
Jeff noted when he became CEO, Covid hit, he worked from home and it was another "very bizarre and challenging time and now the new CEO is going to start with all this geopolitical angst, tariffs and what may be happening in Ukraine and elsewhere so it's another challenging time".
Lastly, I asked Jeff to reflect on a few things as he is closing this chapter at HOOPP:
As you now, I've been CEO of HOOPP for the last five years, CIO for years before that.
I'm very proud that we were able to seize opportunities during the tech wreck, GFC, Covid.
We had a great team with Jim, Michael has been part of that for Covid more recently.
Again, it's all about being well diversified, focusing on our funded status, being liquid and looking for those opportunities. That has always served us well and it served us well over the last five years.
I'm also proud of some of the things that was done during my time as CEO.
As you now we hired our first ever Chief Risk Officer and we've got so many more tools now. We brought in the Aladdin from BlackRock, so the tools we have to assess our risk are so much superior to what we had historically.
We've done lots of liquidity stress testing and continue to make sure we are really good stewards of liquidity here. Our risk team is double the size since I came on as CEO.
We have hedge funds now but are very selective looking for outside managers where we don't have a strong internal expertise.
Our Infrastructure program, I brought that on in 2019, it has been scaled up and that's a good area for us.
We have insurance -linked securities and many more programs here.
Our IT, you might have seen a reference to our AI lab. New leadership was brought on a few years ago and it has become much more proactive in helping the investment and pension administration side.
A lot of important work in terms of building up this organization's capabilities.
It's always been a great organization but we built our capabilities to a new level.
We are now opening up our plan to physicians which is new so we continue to serve that healthcare market, employers and members continues to be strong.
Michael also alluded to the deep partnerships they have and they are trying to leverage those relationships as much as possible and the AI lab helps them do that.
He added: "HOOPP is everybody's friend, we don't compete with anybody, our job is just to pay pensions."
Alright, let me end it well and wish Jeff Wendling once again a great retirement, he is a true gentleman and a great CIO and CEO.
I thank him and Michael for sharing so many great insights.
I also wish Annesley Wallace much success as she takes over the helm and look forward to talking to her when the time is right.
Below, HOOPP’s commitment to our Canada is strong. In fact, over $60 billion of its assets are invested in Canada, with over $25 billion invested in Ontario. Learn about HOOPP’s Canadian investments, the importance of diversification and HOOPP’s responsibility to care for members’ financial futures.