Ontario pension plan OMERS announced yesterday a significant investment in Singapore-based Orion Credit Capital, and this is important for two reasons. First, it signals SOIs’ increasing bet on Private Credit, most times through a specialized manager, as we covered in our 2021 Annual Report.
Second, it confirms the quest of Canadian Funds in Asia-Pacific. Only in 2020, the “Maple 8” deployed US$ 7.3 billion in the region. OMERS was the top spender with US$ 2.6 billion invested in Australian transmission company Transgrid (also participated by ADIA and CDPQ) and pan-Asian logistics platform ESR Cayman among others; followed by CPP (US$ 1.6 billion) and OTPP (US$ 1.3 billion).
Canadian funds are now operating out of 9 offices in Asia (New Delhi, Mumbai, Singapore, Hong Kong, Shanghai) and 3 offices in Sydney, with c.300 investment professionals. OTPP was the last fund to move by poaching OMERS’ Bruce Crane and opening a Singaporean post in August. CPP remains strongly rooted in Hong Kong, while PSP did its second direct investment in India with NIIF Master Fund.
Interestingly, the Canada-Asian love goes both ways, as a recent survey confirmed KIC’s and NPS’ preference to invest with Canadian manager Brookfield when it comes to both real estate and infrastructure, ahead of Australian manager Macquarie and US fund Blackstone.
As global economy recovers from the effects of COVID-19, we expect SOIs to reduce their weight in North America and Europe, and to keep betting on both Developed and Emerging Asia-Pacific.