Ontario Teachers to Open Hong Kong Office

Canada’s third-largest retirement fund is planning to take advantage of Asia's economic boom with people on the ground.

(November 6, 2012) — The roughly $117 billion Ontario Teachers’ Pension Plan (OTPP), Canada’s third-largest retirement fund, is planning to open an office in Hong Kong in 2013 as it aims to bridge its funding shortfall.

However, plans — in terms of size and number of personnel — are uncertain, Bloomberg initially revealed.

The new office speaks to the importance of the region, OTPP spokeswoman Deborah Allen told aiCIO. The office would join OTPP’s New York and London offices outside its Toronto headquarters.

OTPP’s planned first Asian office follows its June acquisition of a 9.9% stake in Kyobo Life Insurance Co., the third-largest insurance company in South Korea, for $400 million. “Kyobo is a leading insurance brand with a strong customer base and financial performance,” said Wayne Kozun, OTPP’s senior vice-president of public equities. “We believe our investment is a unique opportunity to acquire a sizeable stake in the Korean life insurance industry’s most profitable company, and further expand our direct investments in Asia. We look forward to being a constructive partner with Kyobo, its management team and its shareholders.”

The allure of Asia and emerging markets more broadly for institutional investors is nothing new. In June, for example, Kohlberg Kravis Roberts & Co. won a $225 million commitment from the Oregon Investment Council for the investment firm’s buyout fund investing in Asia.

In May, some of the world’s largest investors began lining up to take advantage of China’s economic upward trajectory and new structure for foreign pension funds to invest in the country’s capital markets. With quotas individually capped at $1 billion under the Qualified Foreign Institutional Investor scheme, the China Securities Journal reported at the time that the country would increase the maximum amount that a foreign financial institution can allocate.