* OMERS Private Equity plans to be net private equity buyer
* OMERS announced plans to buy Husky Mouldings this month
* Canadian pension fund may open another global office
By Pav Jordan
VANCOUVER, May 25 OMERS, one of Canada's
largest pension fund administrators, aims to bolster its
private equity portfolio as it builds on a strategy of buying
companies and working with existing management to enhance
value, a senior OMERS executives said.
OMERS, or Ontario Municipal Employees Retirement System,
will look for deals in the C$100 million ($102 million) to
C$500 million range, the size at which it usually targets
acquisitions, Jim Orlando, managing director for private
equity, told Reuters in an interview.
"Net-net, we will be buyers, and net-net, we intend to
increase the number of portfolio companies we have under
management," Orlando said ahead of the annual Canadian Venture
Capital and Private Equity Association conference in
Teaming with private equity firm Berkshire Partners LLC,
OMERS earlier this month said it would buy Husky International
from Canadian buyout shop Onex Corp OCX.TO for $2.1 billion.
It was the latest in a recent flurry of secondary buyouts --
where one private equity firm sells to rival buyout firm.
OMERS, which invests on behalf of more than 400,000 active
and retired municipal employees in the Canadian province of
Ontario, has more than C$53 billion in net assets. Its private
equity allocation is about C$5.5 billion, and it currently has
about a dozen companies in its portfolio.
The private equity arm invests directly, taking control of
companies and working with existing management to make them
more valuable before selling them at a profit down the line.
Over the past decade the pension fund wound down a strategy
of investing through funds and shifted toward direct
investments, said Orlando.
Orlando is one of more than 600 representatives of private
equity and venture capital funds and similar investors in
Vancouver this week for the annual CVCA event.
This year, there are clear signs that deal-making is
heading back to pre-recession levels. High levels of liquidity
are driving exits, or the process by which a private equity
players sells an investment. Prospective buyers are benefiting
from easier access to debt and cash savings realized during the
"This is actually a very good time from the corporate
purchase standpoint because companies have good visibility of
coming years," Orlando said.
"Generally corporate balance sheets are quite strong ... so
that makes for viable corporate transactions in this
environment, and in these incoming couple of years."
Private equity falls under the alternative assets category
for OMERS, which has offices in Toronto, in New York and in
Inside Canada, OMERS invests broadly across asset classes,
whereas in larger markets such as the United States and Europe,
it tends to focus on areas like business and financial services
and industrial manufacturing in consumer oriented products.
Its practice of direct investing and working with existing
management means it has to be close to its assets.
At a time when global investors are looking increasingly to
emerging markets for growth, Orlando said the OMERS was
considering opening new global offices, but he preferred not to
cite specific examples or time frames.
(Reporting by Pav Jordan; Editing by Frank McGurty)