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.

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