Ontario Teachers' winds down its Asia real estate team as a top European investor commits billions to the region
A major Canadian pension fund is pulling back from Asia’s real estate scene, while a European private equity powerhouse is doubling down on the region’s growth potential, according to Bloomberg.
Ontario Teachers’ Pension Plan (OTPP) will disband its Singapore-based Asia real estate team by the end of next year, further reducing its physical presence in the region, according to a spokesperson.
The fund will transition oversight of Asian property investments to its Toronto office, with affected Singapore staff either relocating or departing in phases.
This move, described as a way to “simplify our operating structure in real estate,” comes after OTPP’s earlier decision to shut down its Hong Kong office and reduce exposure to China amid rising geopolitical tensions, as reported by Bloomberg.
OTPP’s Asia-Pacific exposure remains part of its long-term strategy, with approximately 8 percent of its asset mix in the region and real estate accounting for 11 percent of its global portfolio, valued at $269.6bn at the end of June.
While some Canadian funds are scaling back, EQT AB is taking the opposite approach.
Led by billionaire investor Jean Eric Salata, EQT is aiming to triple its Asia investments to as much as US$110 billion within five years, outpacing its deployment in Europe, according to Bloomberg.
Salata previously partnered with the Canada Pension Plan Investment Board (CPPIB) through Baring Private Equity Asia to privatize Nord Anglia Education.
Executives project another US$10bn in exits from the region over the next year.
Salata, recently named global chairman, said EQT is capitalizing on a shift by global investors away from US political turbulence toward Europe and Asia.
He noted, “Being European, being Nordic in its roots and heritage, we have a good position globally in this new world order where we can be a little bit more neutral in the way we view things.”
EQT’s aggressive expansion is backed by strong fundraising and performance.
Its new Asia fund, BPEA IX, secured US$600m in fresh commitments from two major US pension funds in the past six months, in addition to US$200mfrom the New Jersey Pension Fund earlier this year, as per Bloomberg.
The firm has returned €25bn to investors in the past 12 months, with Asia accounting for a sizable percentage.
Recent exits include the US$10.1bn sale of Nord Anglia Education Inc., bringing total distributions from the Asia fund and its co-investors to US$16bn in the past year.
EQT’s merger with Baring Asia, founded by Salata in 1997, has opened new gateways to the world’s fastest-growing markets.
Deal flow in the region has more than doubled, driven by activity in Japan, Korea, and Australia, while India remains a consistent focus.
The newest Asia fund targets 25 percent gross returns and a 2.5 times multiple, according to the New Jersey pension plan.
