The C$43 billion ($40 billion) Ontario Municipal Employees Retirement System (OMERS) continues its
strategic revamp with the appointment of a new chief investment officer, splitting the role from chief executive Michael Nobrega who will focus on the ambitious plans to build co-investment opportunities and offer third-party investment management services.
Michael Latimer, who has been chief executive of Oxford Properties, OMERS real estate arm since 2004, will become chief investment officer from January 1 next year.
The move marks a division in responsibilities at the CEO level for the first time in years, with Nobrega inheriting the dual responsibilities of his predecessor in 2007.
While Nobrega will continue as OMERS president and CEO with responsibility for the leadership and performance of the entire enterprise, including its corporate, pension plan and investment components, the appointment of Latimer as CIO will enable him to focus on overall corporate strategy including the expansion of new strategic initiatives.
OMERS recently created a new investment entity, OMERS Strategic Investments, with a specific mandate to secure co-investment relationships with like-minded investors from around the world, and facilitate a move to its target of about 42 per cent of investments in private markets. Large scale real estate and infrastructure assets will be the focus.
OMERS was also recently granted expanded powers by the Ontario Government to provide third-party investment and pension administration services, and is at various stages of discussion with a number of plans to provide investment management services.
Nobrega has been vocal about pension funds requiring scale to deliver the depth of governance and investment skill needed, and in an April board conference controversially said at its size OMERS was even too small.
At Oxford Properties Latimer managed about $18 billion of real estate assets for OMERS, and as CIO, he will be responsible for overall leadership of, and collaboration among, the OMERS investment entities that manage public equities, fixed-income securities, private equity, real estate and infrastructure.
Since 2003 the plan has reduced its exposure to public market investments from 82.2 per cent to 60.2 per cent at the end of 2008, with a target allocation of 57.5 per cent. In that time the exposure to private market investments has increased from 17.8 per cent to 39.8 per cent.
OMERS also has a plan to actively manage up to 90 per cent of its assets, up from the current level of about 65 per cent, and is in the process of reviewing its asset mix allocations to assess whether any changes should be made.