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OMERS appoints new chief investment officer

The pension's former real estate head, Michael Latimer, takes the CIO reins as OMERS prepares to manage third-party money as well as a multi-billion co-investment fund for institutional LPs.

Ontario Municipal Employees' Retirement System has promoted its property head Michael Latimer to chief investment officer as the Canadian pension looks to create a multi-billion dollar vehicle to invest in large scale infrastructure and real estate assets.

Latimer spent the past four years as chief executive of OMERS' real estate arm, Oxford Properties, and before that was with the Toronto-based REIT, Primaris.

OMERS said in a statement the appointment would allow Michael Nobrega, president and chief executive officer of the C$43.5 billion (€28.4 billion; $39.9 billion) pension, to focus on corporate strategy.

The pension is currently trying to form a multi-billion dollar vehicle with other investors that would target large scale infrastructure and real estate assets. OMERS also said in a statement it was also trying to “take on the investment management of third-party capital pools in Canada and internationally, under new legislated powers granted to OMERS this summer”.

OMERS’ had 15.2 percent of its portfolio allocated to real estate as of the end of 2008, according to the pension’s annual report, with a market value of C$12 billion. Around 88 percent of Oxford Properties’ portfolio involved direct investments in Canadian real estate, with the remaining 12 percent invested in the US, Germany and the UK. The pension said it was planning to increase its direct international exposure.

OMERS has spent the past year almost doubling its allocation to infrastructure, with 16.1 percent of its portfolio now dedicated to the asset class.

In 2008 OMERS’ infrastructure arm, Borealis Infrastructure, completed a public take-over bid for the Teranet Income Fund (Teranet). Teranet is the sole provider of access to Ontario’s electronic land registry system. At the same time, the pension closed a 19.8 percent stake in Texan electricity transmission company Oncor. The deal was done with GIC Special Investments and Hunt Special Utility Investment.

The pension’s allocation to private equity stood at 8.5 percent as of the end of 2008. Private equity returned -13.7 percent as of the end of December, compared to returns of 6 percent and 11.5 percent for real estate and infrastructure respectively.