What's the Ontario Teachers' Pension Plan and why did it invest in Ubisoft?
The Ontario Teachers' Pension Plan is one of two new investors that have purchased Ubisoft stakes after French media conglomerate Vivendi sold them off. The Teachers' Pension received a 3.4 percent hold in the company's shares—that's 3,787,878 shares and equal to around $306.1 million.
How did a teacher pension plan get this kind of money?
It may sound weird to hear about an organization focused on provincial teachers pensions purchasing a portion of a such a huge company. But this is normal for the Ontario Teachers' Pension Plan. It's actually Canada's largest single-professional pension plan provider with $175.6 billion in its net assets, which it has amassed since its establishment in 1990.
The independent organization pays pensions and invests for "318,000 working and retired teachers" in Ontario. Part of Teachers' Pension's investment strategy is to spread its money across broad type and geographical regions, keeping risk relatively low for the teachers it pays out. Its asset mix includes "equities, debt, natural resources, and real assets," Teachers' Pension said on its website. Assets are spread globally, but 54 percent are based in Canada.
Some of Teachers' Pension's other corporate shares include Alphabet Inc. (Google's parent company), Microsoft Corporation, Sony Corporation, Facebook, Inc., and Samsung Corporation. Teachers' Pension also holds 5.4 million shares—valued at $176 million—in Tencent Holds Limited, a Chinese company that also purchased some of Vivendi's Ubisoft shares.
So why Ubisoft? Teachers' Pension has not announced publicly its reasoning for investment in the game developer. But its Canadian ties and history of success are likely part of the reason. Though Ubisoft was founded in France, the developer has multiple offices in Canada. The company reported €725.0 million in third-quarter sales in 2017, up 36.8 percent year on year, which blew past Ubisoft's €700 million goal.
A company with consistent, significant growth aligns with Teachers' Pension's reported goal: to provide long-term funding for the teachers of Ontario.