Public equities were key driver while private markets faltered
The Investment Management Corporation of Ontario (IMCO), which manages over $90 billion in assets for Ontario’s broader public sector public-sector institutions, reported a weighted average net return of 7.4 per cent for the year ended December 31, 2025, the firm revealed Thursday.
According to its press release, assets under management grew to $90.7 billion, while the organization distributed approximately $3.5 billion to clients during the year.
Since 2020, IMCO has returned roughly $11.1 billion to its clients.
The results were achieved against a backdrop of geopolitical uncertainty and foreign currency headwinds, particularly from movements in the US dollar relative to the Canadian dollar. Public equities were the standout asset class, delivering a 19.1 per cent return and serving as the largest contributor to absolute portfolio gains.
Contrastingly, and like several other pension plans have previously reported, private market returns were more subdued.
"Our focus is on generating consistent returns for our clients by building well diversified growth-oriented portfolios while avoiding large, concentrated positions, unnecessary complexity, efforts to market time and the pursuit of outperformance in areas where we do not have any clear advantage. In an uncertain environment, that disciplined approach continued to deliver solid results for our clients,” said Bert Clark, president and CEO of IMCO, in a statement.
On a three-year basis, IMCO achieved a 7.6 per cent return, a result the organization attributes in part to its increasingly active role in shaping client asset mix over that period. Five-year returns, however, continue to reflect the lingering impact of legacy asset allocations and investments that predate IMCO's current strategy.
IMCO’s chief investment officer Rossitsa Stoyanova noted that the longer the investment horizon extends, the more performance reflects IMCO's core approach.
“Performance increasingly reflects our diversified asset mix, systematic management of currency exposure, cost efficiency, and targeted pursuit of outperformance. This approach is designed to deliver resilient outcomes across market cycles for our clients,” she said in a statement.
Cost discipline also featured prominently in the 2025 results. Expenses declined by 10 per cent year over year, bringing IMCO's cost per $100 of assets under management down to 62 basis points, a metric the organization highlighted as evidence of its ongoing commitment to operational efficiency.
Looking ahead, IMCO signalled a continued focus on domestic investment.
Approximately one-third of its $90.7 billion portfolio is currently invested in Canada, and the organization indicated it intends to maintain that approximate exposure level as overall assets grow.
