Canadian pension funds expand into private credit
Four of the largest pension funds in Canada have started to expand into the private sector market.
Canada Pension Plan (CPP) Investments, Ontario Teachers’ Pension Plan (OTPP), Ontario Municipal Employees Retirement System (Omers), and OPTrust together manage almost CAD$1trn (£585bn) in assets.
All four pension funds told Reuters that they intend to increase their exposure to private credit, with CPP Investments planning to double its portfolio over the next five years.
Omers said it has seen opportunities across all credit markets, including in private credit.
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Meanwhile, representatives of OTPP and OPTrust both told Reuters that they saw opportunities to fulfil a funding gap left by banks.
“Private credit is an attractive product right now, and the structural shift from banks to private lenders continues,” said Nick Jansa, OTPP’s executive managing director for Europe, the Middle East and Africa.
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OPTrust said it expects to grow its investments in private credit in Europe and the UK, where higher capital requirements and high base rates have seen many banks reduce their lending operations.
Last year, OPTrust made a “sizeable” increase in its credit exposure from 10 per cent of its assets in 2022.
“We’re quite confident they (the partners) have the skills and ability to navigate that market,” said David Ross, managing director of OPTrust’s capital markets group.
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