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UPDATE 1-Canada's OMERS fund seeks bargains after global equity selloff

Published 2018-02-23, 01:18 p/m
UPDATE 1-Canada's OMERS fund seeks bargains after global equity selloff

* CFO says equities sell-off is "bull market correction"

* CFO says correction is a buying opportunity

* Generates 11.5 percent return in 2017

By Matt Scuffham

TORONTO, Feb 23 (Reuters) - Canadian pension fund manager OMERS said on Friday a selloff in global equity markets provided a chance to pick up stocks on the cheap, after it reported an improved performance in 2017.

Investors have been left nervous after major world stock indexes slumped into correction territory at the start of the month but OMERS Chief Financial Officer Jonathan Simmons told reporters the decline provided a "buying opportunity."

"We think it's a bull market correction and, in underlying terms, the economies are doing well. We're looking for good quality equities taking advantage of market conditions and we have real leverage in our pension plan right now," he said.

Executives at Canada's two biggest public pension funds - the Canada Pension Plan Investment Board and the Caisse de depot et placement du Quebec - have also identified opportunities created by current market conditions. said valuations for private assets, such as infrastructure and real estate, remained prohibitive.

"We think it's a very competitive market for those asset classes. We've seen prices continue to rise. That means we need to be prudent and careful as to how we put our money to work and take advantage of opportunities as we see them," he said.

OMERS, or the Ontario Municipal Employees Retirement System, said it generated an 11.5 percent return in 2017, better than the 10.3 percent return in 2016 and ahead of a benchmark target of 7.3 percent.

Canada's sixth largest public pension fund said its net assets rose to C$95 billion ($75 billion) at the end of 2017, compared with C$85 billion a year earlier.

OMERS said it achieved a 14.7 percent return from investments in publicly traded shares, more than double the return in the previous year.

Investments in fixed income assets such as bonds returned 4.3 percent. Investments in private equity, real estate and infrastructure produced returns of 11.6 percent. ($1 = 1.2683 Canadian dollars)

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