How We Invest

The Fund constructs its portfolio through a multi-asset framework in which each asset class fulfills a defined functional role. Asset class exposures are implemented with clear reference to their contribution to the total Fund’s return profile, risk budget, liquidity requirements, and strategic objectives. While the Fund operates under a total portfolio mindset, the differentiation of asset class roles supports structural clarity, oversight, and performance attribution. 

Strategic Role  

Public equities serve as the Fund's primary source of long-term capital appreciation and growth. They provide scalable access to global corporate value creation and offer exposure to economic expansion, productivity gains, and technological innovation.  

Portfolio Design and Implementation  

The equity portfolio is constructed to ensure:  

• Global diversification across geographies, sectors, market capitalizations, and economic regimes.  
• A majority of fundamental active mandates, both internally and externally managed, with the aim of delivering risk-adjusted excess returns through thematic, sectoral, or regional insights. We also employ some passive and factor-based approaches to complement and add value to our primary investment strategies.  
• Consideration of factor exposures, such as value, quality and low volatility, to enhance long-term return resilience.  
• Integration of responsible investment practices, including proxy voting, engagement, and environment, social and governance assessments.  

Oversight Considerations  

Public equity mandates are monitored for performance consistency, factor tilts, tracking error, liquidity, and alignment with responsible investment standards. Concentration risk is evaluated across regions, sectors, and issuers.

Strategic Role  

Fixed income assets provide capital preservation, income generation, and liability matching characteristics. They also play a critical role in mitigating overall portfolio volatility and providing liquidity under stress.  

Portfolio Design and Implementation 

The fixed income allocation might include:  

• Sovereign and quasi sovereign bonds from stable issuers;  
• Investment-grade corporate debt with robust credit metrics;  
• Inflation linked securities to protect against real value erosion;  
• Selective use of credit strategies to enhance yield subject to defined risk limits.  

Duration, yield curve positioning and credit exposures are actively managed to reflect macroeconomic outlook, interest rate risk, and the Fund's liability profile. 

Oversight Considerations  

Mandates are subject to credit quality thresholds, issuer concentration limits, and stress-tested interest rate sensitivities. Liquidity and counterparty exposures are monitored continuously. 

Private markets offer diversification, long-term return potential, and access to differentiated sources of value creation. As traditional public market returns compress and volatility rises, private equity, private credit, real estate, and real assets are essential components for achieving OIM’s long-term investment objectives. These asset classes typically exhibit lower correlation with public equities. They can provide illiquidity premia in exchange for longer investment horizons, aligning well with the long-duration liabilities of defined benefit pension plans. 

OIM integrates private markets in a robust governance framework, deep due diligence capabilities and a strategic approach to portfolio construction. OIM implements disciplined pacing strategies to smooth capital deployment over time, maintain portfolio balance, and avoid vintage-year concentration. Risk-adjusted return expectations are evaluated across cycles, and performance benchmarking considers the unique characteristics of each private market strategy.  

Furthermore, incorporating environmental, social, and governance (ESG) factors and responsible investing principles into private markets is increasingly seen as a value driver and risk mitigant, particularly in infrastructure and real assets. Liquidity risk will be carefully managed, ensuring the overall portfolio maintains sufficient flexibility to meet pension obligations, even during stressed market conditions.

Strategic Role  

As a key component of OIM’s Private Markets approach, private equity and private credit offer the potential for enhanced long-term returns through exposure to illiquidity premia, growth-stage businesses, and differentiated risk-return profiles that are unavailable in public markets.  

Portfolio Design and Implementation  

The private equity and private credit program includes:  

• Private equity allocations through fund commitments, co-investments, and secondaries; 
• Private credit mandates focused on lending, opportunistic credit, and asset-backed finance;  
• Vintage year diversification to manage deployment, risk, and liquidity pacing;  
• Careful partner selection, emphasizing governance, alignment, transparency, and responsible investment capacity.  

Commitments are structured to balance opportunity capture with prudent management of unfunded obligations and capital calls.  

Oversight Considerations  

All private market strategies are subject to rigorous due diligence, operational risk review, valuation oversight, and liquidity planning. Valuation policies must adhere to recognized industry standards.  

Strategic Role 

Real estate and real assets contribute to portfolio diversification, provide inflation-linked income, and deliver long-duration cash flows. They also serve as a partial hedge against unexpected inflation and economic dislocation.  

Portfolio Design and Implementation  

The Fund invests in:  

• Core and non-core real estate, including office, residential, industrial, and mixed-use assets in stable jurisdictions;  
• Infrastructure assets with essential service characteristics, including transportation, energy, and digital infrastructure;  
• Investment vehicles may include direct holdings, co-investments, and pooled funds, selected based on asset quality, sustainability features, governance alignment, and projected income stability.  

Oversight Considerations 

Real estate and real assets are monitored for leverage ratios, tenancy risk, operational sustainability, valuation, frequency, and asset lifecycle considerations. Environmental, social and governance impacts are assessed at acquisition and throughout the holding period.  

Strategic Role  

Cash and short-term instruments support operational liquidity, capital call readiness, portfolio rebalancing, and market contingency planning. They serve as a principal preservation buffer with minimal risk exposure.  

Portfolio Design and Implementation  

Cash is managed through tiered liquidity pools, calibrated to:  

• Immediate deficit payments and operational expenses;  
• Short-term strategic redeployment and rebalancing;  
• Collateral obligations and margin management.  

Instruments include Treasury-bills, repurchase agreements, high-grade commercial paper, and short-duration investment-grade bonds, all subject to strict maturity, credit, and counterparty risk constraints.  

Oversight Considerations  

Liquidity pools are managed for accessibility, transparency, and policy compliance. No speculative activity is permitted within cash portfolios.