Ontario Teacher’s Pension Not Changing UK Investment Plan After Brexit

Brexit hurt short-term returns at Ontario Teachers’ Pension Plan, but it hasn’t changed U.K. investment plans, said Andrew Claerhout, the fund’s senior vice president of infrastructure and natural resources.

“A 100 percent of our liabilities are Canadian-dollar denominated. So as the pound is dropping precipitously, that has hurt our short term performance in Canadian dollars,” Claerhout told CNBC’s “Squawk Box” on Monday.

The fund, which is Canada’s largest pension plan, had $171.4 billion in net assets at the end of 2015, with more than $15 billion in infrastructure assets.

In the wake of the late June referendum vote to exit the European Union, the pound has tumbled. At 10:13 a.m. HK/SIN, the pound was fetching $1.2151, compared with a high of $1.5018 before the vote.

But that’s not dampening the fund’s enthusiasm for British assets.

“The vote to leave the [European Union] has had short-term impacts on the pound, but it has not had a long-term impact on the desirability of the U.K. market,” he said.

“If you look at the reason we’ve invested in the U.K. historically — the fact that it is an open market, the fact that it is very transparent and that the rule of law is secure, the fact that the regulatory oversight to the extent that it’s a regulated asset is very strong — These things have not changed,” he said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza