OMERS Ventures, the Venture Capital arm of the Ontario public pension fund, announced on Wednesday that it is closing its London program. Of the team members based in the City, managing partners Jambu Palaniappan, Harry Briggs and an associate are reportedly leaving the firm, while managing partner Henry Gladwyn and another associate will relocate to New York to kick off the new team there.
The move is not completely surprising as the Venture Capital sector has significantly cooled down since 2021, especially in Europe. However, OMERS Ventures team were not paying rent (they sat with OMERS’ broader team in the Leadenhall Building in the City), and they were very active with US$ 1.1 billion raised in two funds and 18 investments in the past four years. Those investments will now be managed from NYC.
For the past few years, OMERS has been affected by an exodus of senior dealmakers, especially in the private equity and infrastructure teams, and especially in the London and New York offices. On April 1 this year, Ralph Berg took over as CIO of the institution, replacing Satish Rai. Since then, three of the groups have changed leadership: Growth Equity, Infrastructure and Real Estate (Oxford Properties). However, Damien Steel, who spoke with us in December 2021 at the peak of VC, has stayed at the helm of Ventures.
OMERS is one of the few Canadian pension schemes to be underfunded (95% as of December 2022) and is facing some distress in one of its largest international investments, Thames Water, of which it owns 32%. Its performance during calendar year 2022 was one of the best among sovereign investors with +4.2% - however, it is behind six of the other Maple 8 funds when compared on a 10-year basis.
Other Sovereign Investors have set up Venture Capital teams in London without much success. In 2016, Malaysia’s Khazanah opened an expensive office in Qatar-owned The Shard to focus on VC, which it closed three years later. OTPP and GIC have very selected team members in London, despite having full-fledged VC programs (“Teachers’ Venture Growth” and “Technology Investing Group”, respectively). And Mubadala Ventures’ presence has mostly played an oversight function of the US$ 15bn stake in Softbank Vision Fund.