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While public markets drove returns in the first half of 2026 for the Ontario Municipal Employees Retirement System (OMERS), the second half is poised to deliver a notable private equity win as the pension fund prepares to exit its investment in Maple Leaf Sports & Entertainment Ltd.
In a press release, OMERS said its planned exit from its indirect 5% stake in MLSE, held through its investment in Kilmer Sports, is expected to close later this year. The pension fund invested US$400 million, or approximately C$547 million at the time, in Kilmer in November 2023. Kilmer is selling its 25% MLSE stake to Rogers Communications for C$4.35 billion. The transaction could generate roughly C$870 million in proceeds for OMERS, according to reporting from Bloomberg. That would represent a potential gain of nearly 60% on an investment held for less than three years.
The transaction will come after OMERS generated C$6.9 billion in investment income during the first six months of 2026, producing a 4.8% net investment return and lifting net assets to C$151.6 billion as of June 30.
Blake Hutcheson, OMERS’ president and chief executive officer, noted in the release that the results came amid an increasingly complex global dynamic, which created challenges for investors worldwide. “As a pension plan that pays benefits over decades, we maintain a steady focus on the long term, and to that end we have added more than $78 billion to the plan over the last 10 years.”
Public equities led the portfolio with a 12.2% net return, followed by private credit at 7.8%. Real estate returned 5.5% and infrastructure gained 5.1%, while public credit and government bonds returned 3.8% and 3.2%, respectively. Private equities returned 1.1% during the six-month period, held back by market headwinds that resulted in multiple compression.
Throughout the first half of 2026, OMERS continued to pursue its capital rotation strategy, selling specialty care management companies Paradigm Equity Partners and CBI Home Health. It also announced the sale of Network Plus and Exolum, as well as an agreement to sell its stake in talent and organizational consulting firm AMS.
Public equity performance was supported by record highs in global equity markets, strong corporate earnings and continued investor enthusiasm for artificial intelligence-related investments, noted the release, adding that information technology and industrials led gains in the portfolio. Private credit led OMERS’ fixed income investments, while public credit and government bonds also generated positive returns despite rising bond yields.
OMERS also put another C$1 billion to work in Canadian equities during the first half as it continued to build on its existing investments in Canada. The deployment comes as the pension fund works toward a commitment to add at least C$10 billion in new Canadian investments to its portfolio over the next five years, while maintaining a geographically diversified portfolio.
“While we continue to maintain a geographically diversified portfolio to meet our long-term pension obligations, the current environment in Canada has considerable potential and we look forward to exploring those opportunities that align to our strategy,” Hutcheson said.
OMERS’ existing Canadian investments span infrastructure, hotels, shopping destinations, premium office real estate, technology, bonds and other sectors.
Elsewhere in the portfolio, OMERS completed the financing of 70 Hudson Yards in New York alongside Related Companies and acquired a 13-property Spanish logistics portfolio through its joint venture with AustralianSuper and M7 Real Estate. Its investment in quantum computing company Xanadu also became publicly listed on the Toronto Stock Exchange and Nasdaq during the period.
Infrastructure assets largely performed in line with expectations, while real estate continued its momentum from 2025, supported by strong leasing activity at higher rates, particularly in the office portfolio. Currency appreciation, particularly of the U.S. dollar, added a net 1.4 percentage points to OMERS’ first-half return.
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