Chart: The Highest Paid Pension CEOs

highest paid pension

Over the weekend, the Financial Times released a list of the 14 highest-paid pension CEOs in the world.

Jim Leech of the Ontario Teachers’ Pension Plan, who earned over $7 million in 2013, tops the list.

The rest of the list can be seen above, along with fiscal year 2013’s investment returns.

The accompanying Financial Times story can be read here.

Ontario Teachers’ Pension Completes Purchase of Portable Storage Company

canada

The Ontario Teachers’ Pension Plan (OTPP) has completed its acquisition of PODS, a portable storage company that the pension plan bought for over $1 billion.

OTPP announced the acquisition in December, but the sale wasn’t finalized until Monday.

More from a release:

Founded in 1998, PODS pioneered the portable moving and storage industry and operates in over 150 locations, both corporate and franchise owned, in the US, Canada, Australia and the UK. PODS employs approximately 1,000 corporate employees and has demonstrated a strong track record of growth throughout its history. PODS headquarters will remain in Clearwater, Florida.

PODS President and CEO John B. Koch said, “We are very pleased with the outcome of the sales process and will continue to execute our strategic plan with Teachers’ as our owners. We are looking forward to continued growth as we become part of their world class organization.”

“PODS is a strong fit with Teachers’ investment criteria and we are delighted to add them to our portfolio,” said Lee Sienna, Vice President of Long-Term Equities at Teachers’. “Teachers’ plans to operate PODS as a standalone business operation, retaining the current management team. We are excited about our future together and look forward to supporting the management team to help drive sustained growth for PODS.”

The OTPP manages $138.9 billion in assets.

 

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It’s Hard to Find a Good Deal When Everything is This Expensive, Says Ontario Teachers’ Pension CEO

sale

The CEO of the Ontario Teachers’ Pension Plan, Ron Mock, spoke at the World Economic Forum last week. One of the topics he touched on was how hard it is to find bargains in the current market, where “everything is expensive” and deals can turn into “non-stop auctions”.

More on his remarks from ai-cio.com:

The head of one of the world’s largest investors has told world leaders in Davos that finding a good deal in current markets has become increasingly tricky.

Speaking at the World Economic Forum in the Swiss ski resort, Ontario Teachers’ Pension Plan (OTPP) CEO Ron Mock said that across asset classes “everything is expensive,” according to a report from the Wall Street Journal.

“In the infrastructure space, there is so much money chasing these alternative assets, it’s turned into non-stop auctions,” said Mock. “Infrastructure yields have come down to the single digits, which ignore the regulatory risk.”

His comments echoed a study by Preqin last year showing infrastructure deals were 12% more expensive in 2014 than the previous record set in 2012.

“On the private equity side, there are deals at huge multiples of Earnings Before Interest, Taxes, Depreciation and Amortization [EBITDA],” said Mock, “and the spread between public and private yields are very narrow.”

The Ontario Teachers’ Pension Plan manages $140.8 billion in assets as of December 31, 2013.

 

Photo by  Timothy Sulllivan via Flickr CC License

Former Canada Pension Exec Now Working on Restructuring University of California Fund

California

Brian Gibson, former investment executive at the Ontario Teachers’ Pension Plan, went into semi-retirement in 2012.

Now he’s brought his expertise to the United States, and is helping to restructure the endowment and pension fund of the University of California.

From the Financial Post:

Gibson was hired last May about one month after Jagdeep Singh Bachher, a former AIMCo colleague, was named chief investment officer.

Bachher, AIMCo’s former chief operating officer, turned to Gibson for help in restructuring the fund that had a healthy unfunded liability and was plagued by having too many external managers and being ill-equipped to deal with the new markets.

“The market returns over the coming decade aren’t going to be great. Big balanced portfolios might earn 6%, maybe 7% on average,” said Gibson on Monday prior to flying to California. “Those are pretty modest returns, which makes it challenging to fund pensions and endowments.”

Bachher and Gibson’s goal in restructuring the investment operation was “on generating better returns over and above the market and on reducing their costs. They needed a lot fewer investment managers. They had hundreds of them, way too many,” said Gibson, who has spent half his time since May on the assignment.

Gibson said higher costs result when too many managers are hired and when each manager is given a small allocation. “The benefit of having some very good managers was diluted by having a long tail of other managers who were just okay. They had too many median managers,” said Gibson, one of the three former AIMCo employees at the fund. Arthur Guimaraes, chief operating officer, is the other.

To do that, the fund “eliminated half to two-thirds of the existing managers and re-allocated the capital to the better managers,” said Gibson, it was a change aimed at generating “several hundreds of millions of dollars of improved returns effects and lower costs, because of the ability to negotiate lower fees.”

University of California’s pension and endowment fund manages contains $91 billion in assets.

Video: Canadian Plans Push Back Against Proposed Regulations

Three of Ontario’s pension plans — the Healthcare of Ontario Pension Plan (HOOPP), the Ontario Municipal Employees Retirement System (OMERS) and the Ontario Teachers’ Pension Plan — are protesting a section of a new Act that would place pension plans under the regulatory power of a newly-created securities regulator.

Pension plans are calling the proposal “unbelievable”. Watch the video for more.

Video credit: Daily Globe and Mail

 

 

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Ontario Teachers’ Pension No Longer In Talks to Buy Satellite Company

satellites

The Ontario Teachers’ Pension Plan had been in talks for months to buy satellite company Loral Space & Communications, and even had “handshake deal” in place.

But the talks have stalled, according to reports, because the pension fund “is so fed up” with the company’s founder that “they can’t see straight”.

From the New York Post:

Mark Rachesky’s $7 billion deal to sell satellite company Loral Space & Communications has been grounded, The Post has learned.

Talks between Loral and the Ontario Teachers’ Pension Plan, which were active in the fall, have ended, two sources close to the situation said.

In late October, Loral shares began a 15 percent rise, to $78.14, after reports had Ontario close to buying Loral from Rachesky’s MHR Fund Management.

Loral shares closed Friday at $78.32, up marginally.

Ontario had a handshake deal to buy Loral for roughly $85 a share, sources said, and the plan was to complete the deal once Loral settled a suit with Via­Sat Inc. over patent infringement.

Loral on Dec. 2 announced a $45 million settlement.

Then Rachesky, a former protégé of Carl Icahn, failed to reach a deal with Ontario on who would pay the costs.

At the same time, Ontario found it was more expensive to raise financing for the deal to buy Rachesky’s 38 percent stake in Loral than it would have been in the fall.

“When the leveraged financing market stabilizes, the sides will be back putting it together,” a source said.

The pension is “so fed up with Rachesky they can’t see straight,” another source who believed it might take much longer for the sides to ever get back together said. Rachesky declined comment. Ontario did not return calls.

The Ontario Teachers’ Pension Plan manages $139 billion in assets.

 

Photo by  Jeton Bajrami via Flickr CC License

Ontario Teachers’ Pension Buys Chain of Animal Hospitals for $440 Million

Canada

The Ontario Teachers’ Pension Plan has bought PetVet, a chain of veterinary practices, from private equity firm Catterton.

The deal was worth $440 million, according to the Wall Street Journal.

More details from the WSJ:

The sale is the latest in a string of transactions in the pet-care and pet-products market, where increased consumer spending has paved the way for premium deal prices.

Betting that there is still growth ahead for PetVet, a Westport, Conn., business first backed by Catterton in 2012, the firm is rolling $40 million of the proceeds from the sale into the transaction alongside OTPP, according to the memorandum.

Similar to a physician or dental network, PetVet’s business model focuses on buying veterinary practices and then providing back-office services such as payroll, marketing, accounting and human resources.

The $440 million price tag translates into roughly 11 times PetVet’s earnings before interest, taxes, depreciation and amortization, a hefty multiple even by 2014’s standards and an indication of the value investors see in the pet market.

[…]

PetSmart, PetVet and National Veterinary Associates have been the beneficiaries of a sharp increase in the amount of money spent on pets in the U.S., a figure which has tripled in the past two decades, increasing annually even through the global economic downturn.

In 2014, Americans spent an estimated $58.51 billion on their pets, with more than a quarter of that cost going toward veterinary services, according to the American Pet Products Association, a trade group.

Spending on vet care increased roughly 6% to $15.25 billion in 2014 from $14.37 billion a year earlier, according to the association’s estimates.

The Ontario Teachers’ Pension Plan manages $140 billion in assets.

 

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Ontario Teachers’ Pension Boosts Stake in UK Airport

airport

The Ontario Teachers’ Pension Plan has increased its stake in Birmingham airport after the airport reported its busiest November on record.

The pension fund’s stake in the airport now totals 48 percent.

From the Financial Times:

The Birmingham deal comes a week after the regional airport said passenger numbers in November were the highest ever at 646,000, up 10 per cent on the previous year. It was the sixth record-breaking month in 2014 and the airport said it expected Christmas traveller numbers to be 7.4 per cent higher than last year.

“Birmingham airport is a high-quality asset that we know well. It has good growth prospects and we look forward to working with our partners to strengthen its position as a key regional airport in the UK,” said Andrew Claerhout, senior vice-president at Teachers’.

Birmingham is the UK’s seventh busiest airport with more than 9m passengers passing through its doors in 2013, according to the UK’s Civil Aviation Authority. Heathrow airport is the largest with 72m passengers, double the number of passengers of its nearest competitor, Gatwick.

Teachers’ first invested in Birmingham airport in 2001 and later acquired a joint 48.25 per cent stake with Victorian Funds Management Corporation in 2007 for £420m after the Dublin Airport Authority and Macquarie Airports Group sold their holdings.

The Canadian pension fund now has a sole 48.25 per cent stake, in addition to other airport investments in Copenhagen, Brussels and Bristol. Seven local district councils will continue to own a significant shareholding in the airport.

“We will continue to work with Teachers’ and the district shareholders with the shared goal of developing Birmingham airport’s connectivity to benefit both the region and the UK as a whole,” said Paul Kehoe, chief executive of Birmingham airport.

The Ontario Teachers’ Pension Plan manages over $140 billion in assets.

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Ontario Teachers Pension Buys Storage Company

Canada

The Ontario Teachers’ Pension Plan has announced it will buy PODS, a moving and portable storage company.

Ontario Teachers’ will purchase the entire company; the sale will be finalized in early 2015.

From the Tampa Bay Business Journal:

“We are excited about our new ownership by Teachers’ and are also appreciative of the support we received from Arcapita and our board of directors the past seven years. We look forward to working with Teachers’ to continue our growth and our commitment to our customers,” John B. Koch, president and CEO at PODS, said in a statement.

Teachers’ has a diverse portfolio of companies across the globe including Burton’s Biscuits in the United Kingdom, Canada Guaranty Mortgage Insurance Co. in Toronto and Mattress companies Serta and Simmons in the United States.

The price of the deal has not yet been released.

Arcapita bought PODS in 2007 for $430 million, according to sister publication Atlanta Business Chronicle. PODS says it pioneered the portable moving and storage industry and now operates in more than150 locations, both corporate and franchise owned, in the U.S., Canada, Australia and the U.K.

The OTPP manages $138.9 billion in assets.

Ontario Teachers’ Pension Partners With PE Firm to Buy Computer Networking Company

flying moneyThe Ontario Teachers’ Pension Plan is no stranger to direct investing – the pension fund has an entire arm devoted to it, called Teachers’ Private Capital (TCP).

It was revealed Monday morning that TCP, along with a private equity firm, have agreed on terms to buy computer-networking company Riverbed Technology Inc.

Reported by Bloomberg:

Riverbed Technology Inc. (RVBD), under pressure from activist investor Elliott Management Corp., agreed to be acquired for about $3.6 billion by private-equity firm Thoma Bravo and pension investment group Teacher’s Private Capital.

Riverbed stockholders will receive $21 a share in cash, Riverbed said in a statement today. The agreement represents a 12 percent premium over Riverbed’s Dec. 12 closing price. The computer-networking company said in October it hired advisers to review strategic alternatives.

Elliott acquired a 10 percent stake in Riverbed last year and pushed the company to examine the business, saying it was “significantly undervalued.” It made an unsolicited bid in January and raised the offer to $21 a share the following month. Since then Elliott has been in a tug of war with Chief Executive Officer Jerry Kennelly about selling his company.

“We’re delighted with this outcome that gives shareholders immediate, premium value,” Jesse Cohn, Elliott’s activist portfolio manager, said in a statement today.

Riverbed jumped 9.4 percent to $20.50 at 9:31 a.m. New York time. The shares had gained 5 percent since Jan. 7, the last trading day before Elliott made its first bid, through yesterday.

Kennelly will remain with Riverbed in the same position, the company said today.

Earlier this year, Thoma Bravo was one of several buyout firms including Silver Lake Management LLC and KKR & Co. that informally expressed interest in San Francisco-based Riverbed with offers approaching $25 a share, said people with knowledge of the process at the time.

 

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