The Ontario Municipal Employees Retirement System has appointed former Richard Ellis president Blake Hutcheson as chief executive officer of its real estate operations, the Oxford Properties Group.
Hutcheson will start at the pension in February and report to chief investment officer, and the ex-Oxford Properties chief executive officer, Michael Latimer.
Hutcheson had spent the past 18 months at the New York-based private equity firm Mount Kellett Capital, according to an OMERS memo to employees seen by PERE. Prior to that he worked for 14 years at Richard Ellis in Toronto, latterly as president of the real estate services firm’s Canadian, Latin American and Mexican operations.
Media reports in February suggested Mount Kellett was struggling to raise its debut $5 billion private equity fund, despite building up a large infrastructure and work force. In June, sources told Reuters, the firm – founded by the former head of Goldman Sachs special situations group, Mark McGoldrick – had raised $2.5 billion in commitments and held a second close on $2 billion at the start of 2009. The fund was to focus on Asia investments.
In April 2008, Hutcheson told Canadian newspaper The Star he was resigning from Richard Ellis Canada to start a “non-competitive global capital management business” with a friend. After building the real estate services business from 300 staff to more than 1,800, he added: “We've built this company to huge success and I've loved every minute of it. But …from a personal standpoint, this was an exciting opportunity to build something again.”
Today, OMERS confirmed Hutcheson would become chief executive officer of Oxford Properties Group, its real estate arm, which had C$12 billion (€7.7 billion; $11.3 billion) of assets, net of debt, as of the end of 2008.
His appointment comes five months after Michael Latimer was promoted to chief investment officer of the Canadian pension plan, a move designed to allow OMERS to prepare to manage third-party money as well as a multi-billion co-investment fund for institutional LPs.
The pension is trying to form a multi-billion dollar vehicle with other investors that would target large scale infrastructure and real estate assets. OMERS also said at the time of Latimer’s appointment in July 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. 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.