The

Ontario Municipal Employees’ Retirement System

generated a 2.2 per cent investment return in the first half of 2025 while facing down a “challenging environment for investors” amid global economic uncertainty and exposure to the

United States

.

The pension manager’s $3.1-billion gain for the period of Jan. 1 to June 30 pushed its net assets to $140.7 billion.

 

More than half of the fund’s assets, 55 per cent, are in the U.S., where the

Donald Trump

administration has

destabilized global trade

with a series of

punitive tariffs

.

“OMERS had a positive start in what was a particularly challenging environment for investors,” chief executive Blake Hutcheson said. “As we manage through the current short-term challenges, in both public and private investing businesses, this team continues to unlock opportunities that deliver both immediate and long-term value.”

OMERS’ first-half results were hurt by a more than five per cent decline by the U.S. dollar despite some hedging. The pain was partially offset by the strengthening of the British pound and the euro, but currency had a negative impact of 1.2 per cent on its first-half results.

“Active decisions to hedge currencies added almost one per cent to returns, protecting portfolio value,” Jonathan Simmons, the fund’s chief financial and strategy officer, said.

 

Over the five years that OMERS has reported mid-year investment results, the average annual net return has been 8.7 per cent. Over 10 years, the pension fund has posted an annual net return of 6.9 per cent for a total gain of $70.2 billion.

Infrastructure and public equities drove returns in the first six months of 2025, though six of the portfolio’s seven asset classes, including credit and bonds, contributed positively. Private investments were the weak spot, with private equity posting a negative return of 1.3 per cent.

“Private investment valuations and transaction activity, particularly in private equities and real estate, continue to be held back by uncertainty in the global marketplace,” Simmons said.

The real estate portfolio, which represents 15 per cent of the portfolio, posted a return of 1.1 per cent in the first six months of the year. OMERS, along with other Canadian pension funds, owns office buildings hammered by the shift to

remote and hybrid work

during and in the aftermath of the COVID-19 pandemic.

But OMERS said conditions were improving after a series of challenging years for the industry.

 

“Despite market uncertainty, results were supported by strong operating fundamentals, particularly in office and hotels,” it said in a release on Thursday.

The pension fund for municipal workers in Ontario was also a landlord for insolvent retailer Hudson Bay Co.

OMERS’ real estate division,

Oxford Properties

, went to court this month to argue against transferring some of those leases to an “unvetted and unproven” entrepreneur who is attempting to buy some former locations of the storied Canadian retailer. The court filing said the lease transfer could “jeopardize the stability, reputation, and performance of these assets” in which Oxford has invested hundreds of millions of dollars.

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“A diminution in the value or stability of Oxford’s real estate portfolio would negatively impact the performance of OMERS’ investments, and, by extension, adversely affect the long-term interests of millions of current and future pension plan beneficiaries,” the Aug. 9 filing said.

• Email: bshecter@nationalpost.com