Canada’s Omers starts Asia capital markets buildout
The Ontario Municipal Employees' Retirement System (Omers), one of Canada's biggest pension plans, is building a capital markets team in Singapore, extending its investment push in Asia.
To kick off, the C$97 billion ($73 billion) fund has already hired two senior emerging market equity specialists, according to internal memos seen by AsianInvestor.
Kannan Venkataramani joined last month as a managing director on the capital markets team. He is reporting to Ashish Goyal, who came on board in July.
Both men previously worked at NN Investment Partners (NNIP), but exited the Dutch fund house in May, after it starting winding down its emerging market equity desk in late 2018.
One internal Omers note said Venkataramani would focus on “delivering absolute-return performance through public markets investments across asset classes in the Asia-Pacific region”.
Toronto-based Omers had opened an office in Singapore in January last year, adding to its infrastructure-focused branch in Sydney. Initially the investment team in the Lion City largely comprised private market specialists.
Omers is now ramping up its local coverage of publicly traded securities. For instance, it acted as the cornerstone investor in last month's listing of Hong Kong real estate developer ESR. The fund invested $585 million in the $1.45 billion flotation.
MORE EXPERTISE
Omers has around half of its assets invested in capital markets, according to one executive familiar with the retirement fund. So it made sense to bring in more expertise in that area.
Prior to Goyal's arrival, Brijesh Chopra headed the regional capital markets team as a managing director. He retains his current function but now reports to senior managing director Goyal.
Chopra had been head of Asia capital markets “in the sense of establishing the beachhead at the very beginning, when they opened up the Singapore office in 2018, building initial relationships, waving the flag, creating a credible presence", the unnamed executive told AsianInvestor on condition of anonymity.
(Source: Omers; Click for full view)
But now Omers needs to build a more formal structure as it starts to ramp up investment across Asia, added the source. It made sense to have someone who is very well-established in the region to carry the flag forward from now on, he said.
Accordingly, Goyal has some 27 years of investment experience covering Asian and global emerging market equities and fixed income, having led large investment teams in Hong Kong and Singapore, at Eastspring as well as NNIP. He reports to Michael Rolland, Omers's Asia-Pacific head, and to global head of capital markets Ken Miner.
Omers declined to comment when contacted for this article.
DIVERSIFYING FOR PROTECTION
The Canadian group explained in its 2018 annual report, published in April this year, that boosting its Asian exposure is a priority to help insulate its broader investment portfolio against the challenging environment it expects in the years ahead.
“Over the long term, we remain committed to further diversifying our asset mix by adding high-quality, income-producing investments and gradually tilting the portfolio toward high-growth Asian markets,” the report said.
In that respect Omers is not alone, given a similar trend among other big Canadian pension funds such as CDPQ, CPPIB and the Healthcare of Ontarion Pension Plan, as well as other global asset owners.
Montreal-based PSP Investments opened an office in Hong Kong earlier this year (in Hong Kong), while Dutch group APG Asset Management set up debut mainland China operations in Beijing and Shanghai last month. And the Teacher Retirement System of Texas is preparing to establish a presence in Singapore.
Omers added elsewhere in the annual report that it aimed to diversify the plan’s investments geographically and by asset class: “In our capital markets business alone, over the last five years, we have increased the number of countries in which we invest by 30% and the number of product types by 50%.”