Toronto, Ontario – As private equity firms navigate a challenging investment landscape with rising interest rates, Investment Management Corp. of Ontario stands ready to weather the storm. With a C$77.4 billion portfolio, the Canadian pension manager remains patient despite the slowdown in exits from investments.
Chief Investment Officer Rossitsa Stoyanova acknowledges the difficulties private equity firms face in securing financing for acquisitions and finding buyers for assets at favorable valuations. However, optimism emerges as signs of increased deal activity surface amidst expectations of interest rate reductions by central banks.
IMCO’s 5.6% return in the previous year fell short of the benchmark of 6.6%, with losses in real estate offsetting gains in other asset classes. CEO Bert Clark attributes the fund’s performance to sticking to long-term strategies amid market uncertainties.
Established less than a decade ago, IMCO continues to expand its investment programs, particularly in private equity and private credit. In a move to diversify its portfolio, the Toronto-based manager has allocated funds to European buyout firms and ventured into direct and co-investment PE deals.
Looking ahead, IMCO aims to increase exposure to private credit and explore opportunities in infrastructure supporting the energy transition and artificial intelligence. Investments in sustainable technology companies like Northvolt AB and CoreWeave reflect the fund’s commitment to innovative industries.
To further align its portfolio with strategic objectives, IMCO plans to divest stakes in infrastructure and real estate assets. The shift towards European and US markets indicates a broader diversification strategy in real estate holdings, with a focus on optimizing returns and funding future investments.
As the investment landscape evolves, IMCO’s proactive approach positions the pension manager to capitalize on emerging trends and opportunities in the market. With a focus on long-term value creation, IMCO remains resilient in navigating the complexities of the investment landscape.