Ontario Teachers' fund plans Asia office, building 10-member team

Thu Nov 29, 2012 11:48pm EST

* Teachers' office will be its first in Asia

* Office to be headed by Raju Ruparelia-source

* Teachers' active in deal making in Asia this year

By Stephen Aldred

HONG KONG, Nov 30 (Reuters) - Ontario Teachers' Pension Plan, a leading Canadian pension fund, plans to open its first Asia office next year in Hong Kong, with as many as 10 staff, a source with knowledge of the matter said, as it targets higher returns from direct investments in the region.

Teachers' is one of the world's largest investors into private equity firms, and is increasingly active in direct investing in deals, and the move to set up only its second office outside Canada underscores the significance of Asia to influential pension fund managers.

Teachers' president and CEO Jim Leech said in a statement on Thursday the fund was in the preliminary planning stages of opening an Asian regional office in Hong Kong.

"Given the global nature of our business and the increasing importance of the Asian region to our fund, it is logical that we have a location there," said Leech.

Teachers', Canada's largest single-profession pension administrator, had $117.1 billion in net assets under management at the end of 2011.

It has struck some deals in Asia this year on its own, apart from ploughing money into buyout funds. The fund invested alongside Unitas Capital in New Zealand Yellow Pages in 2007.

Teachers' plans to move Raju Ruparelia, an Ontario-based portfolio manager and former investment banker with Credit Suisse, to head its Asia office which will be based in Alexandra House, in the heart of the island city's Central Business District, according to a second source.

Ruparelia is a manager for Teachers' Private Capital, the private equity investment arm of Ontario Teachers'.

About half of the team will be focused on publicly traded companies and the remaining half on private markets, the first source said.

Teachers' spokeswoman Deborah Allan declined to comment on details of plans for the Hong Kong office, the fund's second regional office after London, which opened in 2007.

The sources declined to identified as the details were private.

ACTIVE DEALMAKERS

Teachers' is actively seeking opportunities for direct investments to increase its share of profits, as pension funds in general face increasing obligations on account of ageing populations.

Teachers' said in April that while it was making double-digit returns on assets, there would be a C$9.6 billion funding shortfall as the cost of future pension plans are growing faster than its assets.

Teachers', along with Canada Pension Plan Investment Board (CPPIB) and Caisse du depot et placement, are among the world's most active dealmakers in recent years, making major bets both in Canada and overseas.

Earlier this year, CPPIB hired former Goldman Sachs banker Mark Machin to lead its organisation in Asia.

Teachers' acquired a 9.9 percent stake in South Korea's Kyobo Life for around $400 million in June, and with Hastings Funds Management has signed an A$2.3 billion ($2.35 billion) deal on the long-term lease of the Sydney Desalination Plant with Australia's New South Wales state.

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