Investment Committee – May 13, 2019
Investment Risk Policy – Leverage Limit Changes
Financial leverage increases investment risk through permanent loss of capital in the event of a covenant breach that is not remedied and when lenders exercise their rights over the secured assets. A limit assists in managing this risk.
The Committee was asked to consider a proposed amendment to the Investment Risk Policy whereby the current Plan debt limit would be increased from 35% to 50%, with an amber zone beginning at 45%. This update would help OMERS better manage investment risk by bringing the limit in line with today’s asset mix target weights.
Following questions and discussion, the Investment Committee approved the amended Investment Risk Policy, effective May 14, 2019. Due to the confidential and commercially sensitive nature of its contents, the Investment Risk Policy will not be posted on the OMERS website and will be kept confidential for internal use only.