2021 Highlights
TORONTO, April 25, 2022 /CNW/ - The Investment Management Corporation of Ontario (IMCO) today announced that the weighted average net return of its clients' portfolios was 9.6% for the year ended December 31, 2021, compared to a consolidated benchmark return of 8.5%. Client returns ranged from 0.1% to 11.2%, reflecting broad differences in their respective asset allocation strategies, risk tolerances and investment objectives.
IMCO generated 110 basis points of net value add for clients in 2021, and 50 basis points annualized since first launching its new investment strategies two years ago. IMCO's assets under management rose to $79 billion at the end of 2021, up from $73.3 billion a year earlier.
"We are proud of the results we achieved for our clients this year," said Bert Clark, President and Chief Executive Officer. "IMCO's outperformance reflects our fundamental approach to investing. We look to buy high quality assets at fair prices and focus on long-term value creation."
"We continue to work with our clients to build better performing asset mixes over the long-term," Clark added. "This includes creating more access to private assets and introducing modest use of systematic leverage. Additionally, we have established new approaches to investing in each asset class with a more focused number of partners and an increased proportion of funds that are invested directly. I am pleased to see that these changes are already yielding improved absolute and relative (to benchmark) returns."
In addition to ongoing strategy refinement throughout 2021, IMCO increased its investing activities significantly, carrying out 35 direct and co-investment transactions throughout the year while achieving numerous milestones. For example, IMCO completed its first 100% acquisition (Pulse Clean Energy), its first participation in an IPO (Definity Financial), and its first take-private deal (AusNet Services).
"We have the internal expertise and world-class partners in place to deliver the sustained and long-term returns our clients require," said Rossitsa Stoyanova, IMCO's Chief Investment Officer. "Our results speak to our focused approach, which includes a fundamental approach to investing at the individual security level, coupled with strong portfolio construction advice and management."
Portfolio performance by asset class
(as of Dec. 31, 2021)
Asset Class | Net | Net Return (per cent) | |||
1-Year | 1-Year | 2-Year | 2-Year | ||
Public Equities | $26.3 | 16.3% | 15.6% | 13.4% | 13.9% |
Fixed Income | $17.2 | (1.8%) | (1.9%) | 3.3% | 3.2% |
Real Estate | $9.6 | 13.0% | 4.2% | (0.3%) | (1.7%) |
Global | $6.3 | 12.3% | 21.7% | 6.8% | 4.6% |
Global Credit | $6.0 | 2.9% | 1.4% | 6.9% | 3.7% |
Public Market | $4.9 | 3.1% | 0.0% | 2.6% | 0.9% |
Private Equity | $4.6 | 19.2% | 16.9% | 26.4% | 13.0% |
Money Market | $1.8 | - | - | - | - |
Total3 | $76.7 | 9.6% | 8.5% | 7.4%3 | 6.9% |
1. Net investment is calculated as assets under management less certain excluded assets and investment-related liabilities |
2. Money Market & Other includes assets related to Active Asset Allocation and Dynamic Foreign Exchange and are included in the total net return. |
3. Total net investments and net return for 2021 included the Diversified Markets asset class, which was liquidated by December 31, 2021. |
Key transactions in 2021 include an investment in a major life sciences development at Harvard University alongside Tishman Speyer; the acquisition of Pulse Clean Energy, a UK-based sustainable power company which will serve as a platform for a utility-scale battery business, and a number of significant capital allocations to best-in-class global private credit and private equity managers. Highlights across select asset classes include:
IMCO also made considerable progress on embedding ESG in its investing approach in 2021, reflecting the organization's commitment to building a sustainable, low-carbon future and a stronger and more resilient global economy. IMCO also joined the Paris Aligned Investment Initiative on Climate Action, pledging to achieve net zero portfolio green house gas emissions by 2050.
IMCO delivered $20 million in investment management cost savings on behalf of clients, in addition to significant cost savings delivered in prior years. "Our goal is to offer our clients a more cost effective and better solution than any alternative available to them," Clark said. "We're proud of our ability to eliminate expenses, even as we continue to invest in growing and maturing our internal capabilities in areas such as client service, risk management and portfolio construction."
The Investment Management Corporation of Ontario (IMCO) manages $79 billion of assets on behalf of its clients. IMCO's mandate is to provide broader public sector institutions with investment management services, including portfolio construction advice, better access to a diverse range of asset classes and sophisticated risk management capabilities. IMCO is an independent organization, operating at arm's length from government and guided by a highly experienced and professional Board of Directors. Follow us on LinkedIn and Twitter @imcoinvest.
Contact
Annette Robertson, Corporate Communications
(437) 233-3971
[email protected]
SOURCE Investment Management Corporation of Ontario [IMCO]
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