OPTrust internalizes public market assetsPosted: June 7, 2017
The Plan’s member-driven investing strategy supports maintaining fully funded status
TORONTO, June 7, 2017 – Today marks a major step towards OPTrust’s plan to internalize public market asset management of approximately 40 to 50 per cent of the fund’s $19 billion in assets over time with the launch of its in-house trading floor and its first internal trade.
Over the past two years, OPTrust has been implementing a member-driven investing (MDI) strategy with a singular focus to increase the likelihood of plan certainty by balancing the objectives of sustainability and stability to better align the Plan’s outcomes with members’ needs. Internalizing facets of public market assets supports this strategy through the ability to execute trades and to customize investment solutions with enhanced liquidity.
“The move to internalization provides us with direct access to the markets and greater insight into changing conditions to customize our investment strategies in a more agile way,” said Hugh O’Reilly, OPTrust President and CEO. “Internalization is a natural evolution for OPTrust and a key enabler of our MDI strategy to achieve purposeful risk allocation and deliver on our promise to members.”
Internalizing investment processes creates opportunities for OPTrust to further improve risk management, increase the operational skills of personnel and build internal capacity, allowing for a deeper understanding of risk and public markets.
OPTrust is taking a measured approach to internalization to ensure its success. The goal is to internally manage the majority of the fund’s public market assets and strategies, including foreign exchange, fixed income and derivatives with the initial focus on money markets, bonds, foreign exchange and repurchase agreements.
With net assets of $19 billion as at December 31, 2016, OPTrust invests and manages one of Canada's largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with almost 90,000 members and retirees. OPTrust was established to give plan members and the Government of Ontario an equal voice in the administration of the Plan and the investment of its assets through joint trusteeship. OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by OPSEU and five by the Government of Ontario.
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