After starting to manage assets for its first two clients in July 2017, the Investment Management Corp. of Ontario has released its 2018 annual report, but investment results will be announced by its clients this year.
Currently, the IMCO manages $26 billion in net assets for the Ontario Pension Board and $34 billion for the Workplace Safety and Insurance Board. To date these have been managed on a segregated basis. “We will start to provide our clients with more comprehensive portfolio construction advice and offer IMCO investment strategies in 2019,” said Bert Clark, the IMCO’s president and CEO in the report. “In 2020, we plan to migrate client segregated assets to pools that reflect IMCO investment strategies.”
The investment results will be reported independently by the OPB and the WSIB for 2018 and the IMCO will begin to report investment results when client portfolios reflect its strategies and have a common set of benchmarks, the report noted.
Neither client organization has posted its annual report, yet the OPB has announced that it ended 2018 with an annual investment return of 1.8 per cent. The WSIB also released its fourth quarter report for 2018, stating its return on investments was a negative return of 0.7 per cent in 2018 compared to return of 10.7 per cent in 2017.
As of the end of 2018, the IMC0 had 56 per cent of assets allocated to Canada, 22 per cent to the U.S., 10 per cent to Asia, nine per cent to Europe and the Middle East and three per cent to emerging markets.
As for asset classes, public equities made the up the largest segment of the portfolio, at 35 per cent, representing $22.3 billion in assets. Next was government bonds and credit (22 per cent), followed by a significant allocation to real estate (18 per cent). Lower on the list were infrastructure (nine per cent), public market alternatives (seven per cent), absolute return strategies (six per cent) and private equity (three per cent).
In the report, Clark noted that in 2017 the organization had yet to develop the structure and systems normally used by a multi-client asset manager, but it has now developed those capabilities. “Today we are an integrated organization and we have put in place the core capabilities required to begin taking on new clients. In short, 2018 was a transformational year for us.”