OMERS Capital Markets manages approximately 58.2 per cent of the primary plan's assets, which total C$69 billion ($51 billion). The majority of the capital managed by OMERS Capital Markets is invested in a globally diversified portfolio with exposure to equities, bonds and commodities called "beta". In this portfolio, assets are allocated to balance risk and earn returns across economic cycles where asset performance is influenced by the focus of inflation and growth. OMERS Capital Markets also invests in a variety of alpha strategies separately from the beta portfolio. The alpha portfolio takes views on the direction of the financial markets and relies on the skill of the internal and external investment teams to deliver absolute returns.
The capital markets portfolio includes economic leverage, which is managed to provide a high level of liquidity to the fund. Liquidity is required in OMERS Capital Markets because a significant portion of the fund is invested in private assets (41.8 per cent as at December 31, 2014; 47 per cent as the long-term target). The private market assets invested in by the OAC are illiquid in nature compared with public stocks and bonds. The belief is that owning these assets long term compensates the liquidity by delivering strong cash flows and value gains over time, and as such these assets are a good match for the primary plan's liabilities.
