Ontario Teachers’ Takes $400 Million Stake in Korean Insurer

(June 21, 2012) — The $115 billion Ontario Teachers’ Pension Plan (OTTP) has acquired a 9.9% stake in Kyobo Life Insurance Co., the third-largest insurance company in South Korea, for $400 million.

“Kyobo is a leading insurance brand with a strong customer base and financial performance,” said Wayne Kozun, OTTP’s senior vice-president of public equities. “We believe our investment is a unique opportunity to acquire a sizeable stake in the Korean life insurance industry’s most profitable company, and further expand our direct investments in Asia. We look forward to being a constructive partner with Kyobo, its management team and its shareholders.”

The deal represents OTTP’s first direct investment in Korea and is the Canadian pension fund’s second major private equity transaction this month. On June 4, OTTP announced that it had joined an investor group to purchase Canadian data center operator Q9 for about $1.15 billion. “Our direct investing goal is to identify companies around the world that we can grow and add value to over the long term,” Deborah Allan, director of communications and media relations at OTTP, told aiCIO at the time. “We feel that the Q9 opportunity is an ideal match for that goal, which ultimately is designed to help us to pay our 300,000 members’ pensions.”

The pension fund has a $12 billion allocation to private equity and boasts that its private equity portfolio has generated an internal rate of return of 19.3% since its inception in 1991.

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OTTP is Canada’s largest single-profession pension fund and administers the plans of 300,000 beneficiaries.

A household insurer in the United Kingdom has appointed a seasoned pensions professional to oversee its investment strategy after farming out its asset management function last year.

(June 21, 2012) — A major UK insurance company has appointed a senior pension fund professional to oversee its investment strategy as the trend to take control of assets internally gathers pace.

Wendy Mayall has joined LV= as chief investment officer with responsibility for around £8 billion in assets, the company announced today. LV= is the rebrand for Liverpool Victoria, the UK’s largest friendly society, offering insurance, pension and investment products.

In this new role she will be responsible for all elements of LV=’s investment strategy across the company’s diverse business areas and will oversee the relationship with Threadneedle Investments, which overtook the management of the society’s assets last year. The company outsourced its asset management arm, but has recaptured overall strategic control with this new role.

Mayall had previously run the biggest fund within Unilever’s pension plan and was responsible for setting up the first multinational vehicle to pool funds globally, the hedge fund-of-funds and numerous equity multi-manager vehicles. She left the fund last year for a brief stint at fiduciary managers and consultants Stamford Associates.

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Philip Moore, Group Financial Director at LV=, said: “This is an important role within LV= so I am delighted that someone of Wendy’s calibre is joining us. Wendy will join my senior team and play a key part in ensuring our investment performance is strong and our members can continue to enjoy market-leading returns on their investment products.”

The announcement comes a day after aiCIO exclusively revealed fellow UK insurer Aviva had appointed Ian McKinlay to run its pension fund assets worth over £10 billion.

The trend to appoint a key professional or team to take responsibility for investment strategy and asset manager relationships has been gathering pace since the financial crisis.

Large pension funds, insurers and other large asset pools in Europe have been recruiting experienced staff to create internal teams that can swiftly react to changes in the market and whose interests are better aligned to those set to eventually benefit from the assets.

For an in-depth study on this trend see the upcoming issue of aiCIO, out next week.