OMERS Ventures plans to raise $300 million CAD in 2017 for third fund

John Ruffolo

OMERS Ventures plans to raise $300 million through the launch of a third fund in 2017 dedicated to investing in early stage tech startups, according to a report from Reuters.

When the OMERS Ventures fund was first established in 2011, it raised $210 million in its first round of funding. It raised a further $260 million last year from investors like BMO, Canadian pension fund OMERs itself, and Cisco Systems. Cisco is working with OMERS Ventures for perspective on up-and-coming startups for its own investment fund.

“I would say by early 2017 we’ll be fundraising for fund three. A range between $200 and 300 million Canadian dollars is where we think, based on our strategy, we can deploy that money very effectively and maintain a very high bar of quality,” CEO John Ruffolo told Reuters.

Ruffolo said he’s looking for investors who can not only contribute financially, but also in expertise. He’s anticipating OMERS Ventures expanding to eventually have around $1 billion of assets under management, and added that OMERS Ventures only invests in companies that it believes can eventually IPO. So far, out of all 26 companies it’s invested in, Shopify has been the only one to IPO. However, he has said in the past that he expects another company to IPO in 2016, and while he declined to say which one, Bloomberg noted it was likely Vision Critical.

According to the report, OMERS was the first Canadian pension fund to directly invest in startup companies and remains the only major pension fund which adopts that approach, as others prefer to focus on larger investments as they view startups as more risky, according to pension experts.

  • kmath

    I think pension funds aren’t as worried about the risk, as they are the cost of managing the investments. I used to work at bcIMC (BC’s major pension fund), and I had this discussion with the head of Public Equities. Even if the VC fund had $1B in assets, that’s only a tiny fraction of pension managers total assets. BcIMC for example has $125B, so that would be less than 1%, yet it would take a similar (or greater) amount of staff as their other asset classes that manage over $10B each.