OMERS reports first loss since financial crisis, Caisse trims gains

(Reuters) – Canadian pension fund OMERS on Thursday reported its first annual net loss since the 2008 financial crisis and larger rival Caisse posted its smallest gain in two years, as shutdowns and a coronavirus-driven economic slump hurt investments.

OMERS, which had C$105 billion ($83.8 billion) in net assets at the end of 2020, reported a negative return of 2.7%, with widespread lockdowns hitting its investments in real estate, energy and financial services.

Caisse de depot et placement du Quebec, Canada’s second-largest pension fund, reported a 7.7% gain over the same period, helped by high returns from private equity and private credit in fixed income.

OMERS Chief Executive Officer Blake Hutcheson said in comments to Reuters: “This is one difficult year, largely COVID-related that we will put behind us.

“We’ve woken up this year already in pretty good shape but it didn’t happen to coincide with year-end.”.

OMERS said it planned to shift capital towards businesses with lower carbon intensity, including renewable power, and continue to invest in real estate, including industrial spaces and laboratories.

Its investment portfolio averaged annual returns of 8.2% over ten years leading up to 2020, compared with Caisse’s return of 8.6% over the same period.

Caisse’s asset under management rose 7.5% to C$365.5 billion at Dec. 31, with private equity portfolio generating C$4.9 billion in value, according to its annual results.

Caisse, one of the top shareholders in takeover target Transat AT, said the tour operator’s board should “give itself as many options as possible,” after a planned takeover deal by Air Canada was left in limbo.

Caisse CEO Charles Emond said Caisse “was not favouring one option over another,” referring to the formal bid from Air Canada and another unofficial offer from Canadian businessman Pierre Karl Péladeau.

($1 = 1.2476 Canadian dollars)

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