Ontario Teachers’ Pension Plan Navigates Private Equity Challenges Amidst Positive 2025 Returns
Toronto – Ontario Teachers’ Pension Plan (OTPP) announced a total-fund net return of 6.7% for the year ended December 31, 2025, with net assets growing to $279.4 billion, up from $266.3 billion in 2024. However, the results come as Canadian pension funds grapple with a downturn in private equity performance, marking the first private equity loss for OTPP since 2009.
2025 Performance Overview
The 6.7% return was driven by strong performance in venture growth, public equity, gold, and credit, according to a press release issued on March 10, 2026. Investment income totaled $18.5 billion, with member and employer contributions reaching $4.1 billion, offset by $8.5 billion in benefits paid and $1.0 billion in administrative expenses.
Despite the positive overall return, OTPP underperformed its 2025 benchmark of 11.7% by 5.0%, resulting in a negative value add of $12.0 billion. The plan remains fully funded for the 13th consecutive year, with a preliminary funding surplus of $31.2 billion, a slight increase from the $29.1 billion surplus reported in the prior year, equating to a funding ratio of 111%.
Private Equity Headwinds
The positive overall results are contrasted by challenges within the private equity portfolio. Recent reports indicate a broader slump in private equity returns for Canadian pension funds. The Healthcare of Ontario Pension Plan (HOOPP) reported private equity returns of 3.6% in 2025 1. OTPP’s private equity team faced headwinds due to broader sector challenges.
Ontario Teachers’ Private Capital Strategy
Ontario Teachers’ has $51 billion in assets under management within its private capital portfolio, with over 500 company and fund investments since 1991 2. The plan focuses on flexible capital deployment across growth equity, structured equity, buyouts, and co-investments, aiming to play a significant role in building stronger companies.
OTPP emphasizes integrating environmental, social, and governance (ESG) factors into its investment process to support long-term value creation and resilient returns. The plan’s long-term investment horizon allows it to back firms without the pressure of immediate fundraising or exit requirements.
Broader Investment Portfolio
OTPP’s investment portfolio is diversified across several asset classes, including capital markets, equities, infrastructure & natural resources, real estate, and Teachers’ Venture Growth (TVG) 3. The plan aims to balance investment risk and return by allocating capital effectively and managing volatility.
Looking Ahead
Despite the challenges in private equity, Ontario Teachers’ Pension Plan remains financially stable and well-positioned for long-term growth. The plan’s diversified portfolio and disciplined investment approach are expected to continue delivering stable returns for its members. The focus on long-term value creation and responsible investing will be crucial in navigating future market conditions.
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