10.19.2011
By Terry Flanagan

HOOPP Stays the Course

Canadian pension names new chief executive, but maintains same investment strategy.

Jim Keohane, the current chief investment officer and senior vice president of Investments at HOOPP (Healthcare of Ontario Pension Plan) has been appointed to president and chief executive, effective at the beginning of 2012.

Keohane will replace John Crocker, who is retiring at the end of this year. Keohane’s message about his new post is that investors can expect just “subtle differences.”

“I’ve worked with John for 12 years,” Keohane told Markets Media. “We have a lot of the same beliefs. I don’t think there will be too noticeable differences.”

Leadership style aside, Keohane noted that the secret to HOOPP’s success in the pension-wide plight to stay funded will be to maintain the firm’s current investment strategy.

“I’ve been a part of the development for our current strategy, so the message is to stay the course,” he said, citing that new challenges going into 2012 will be low interest rates.”

“Low interest rates are a challenge for everyone; if you had a 60-40 bond to equity ratio on your on portfolio, you’re not doing well,” Keohane said.

HOOPP is among the few major defined benefit plans that is fully funded, most noted for its success in navigating the 2008 financial crisis, whereas many other pensions were hit hard on liquidity concerns and unsound investments.

HOOPP’s assets are actively managed using a diversified, long-term investment strategy, but the firm’s current methodology takes advantage of derivatives, which has been a major contributor to the C$35.7 billion under management.

Moreover, the firm focuses specifically on liability driven investing, as well as seeking returns— in two separate portfolios. The fund is now fully funded with the effect that the contribution rates and benefits will be stable until at least the end of 2012.

HOOPP’s investment staff is small; with 40 in-house investments professionals. Jeff Wendling, former head of public equities, will now look after all equities including private equity and real estate. David Long will be responsible for asset liability management (ALM), and maintain his post as head of fixed income and derivatives.

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