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Ontario scheme eyes European private equity

EUROPE – The Ontario-based public pension scheme OMERS says it is in talks about a European private equity investment worth around 160 million euros.

“We are currently negotiating a major European-based investment with global extensions,” said Ian Collier, president and chief executive of OMERS Capital Partners, part of Canada’s 34 billion-dollar (21.9 billion-euro) Ontario Municipal Employees Retirement System.

A spokeswoman declined to disclose whom the fund was talking to but added: “We are looking to invest approximately 160 million euros.” She added: “We have been investing in Europe over the past decade, this market is not new to us.

“It is widely assumed that private equity will outperform public equity over the long term,” Collier said. “The expected premium is something that no institutional investor can afford to ignore if it takes its fiduciary duty seriously.”

“OMERS is one of few pension funds in the world to have broadly based private equity expertise on staff,” Collier said.

“We see this as an effective way to enhance fund returns and help deliver the pension promise to plan members.” The unit employs 20 staff and says it expects to look at 100 opportunities a year and do due diligence and financial modelling on 15 to 20.

The defined benefit OMERS is one of Canada's largest pension plans, providing pension services to about 342,000 members and 900 employers.

In August, OMERS’ investment entity Borealis Infrastructure and the Ontario Teachers’ Pension Plan said they each held 25% of a consortium that had an agreement to acquire the Scotland and the South of England gas distribution networks from National Grid Transco plc.

OMERS first invested in private equity in 1989 and has to date committed around three billion dollars to the asset class – with around 1.2 billion dollars invested.

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