We’re pleased to announce the release of our 2019 Annual Report, titled The 20-Year Advantage. It includes details about the performance of the Pension, Endowment and short-term working capital investments that we manage on behalf of the University of Toronto. In addition, the release of this publication coincides with UTAM’s 20th anniversary, giving us an opportunity to reflect on our journey and share our vision for creating sustainable value over the long term.

Over the past 20 years of managing U of T’s investments, we’ve never lost sight of our purpose and the deep sense of responsibility that comes with it. More than 20,000 members of the University of Toronto Pension Plan – retired, active and deferred – look to UTAM to help ensure a secure and well-deserved retirement. The donors who have generously contributed to the Endowment expect us to maximize the value of their gifts while following prudent risk management practices. And everyone in the U of T community, including students, faculty and staff, count on us to build and sustain the solid financial foundation required by a leading global centre of academic excellence and advanced research.

As we look back over the past two decades, we’re gratified to see all the ways that we’ve improved as an organization. For example, we’ve deepened the expertise across our firm, systematically enhanced our processes and systems, and fully integrated environmental, social and governance (ESG) factors into our investment decision-making. We will continue to strive to improve further over the next 20 years. The 2019 report looks at UTAM through the lens of the traditional four P’s – philosophy, people, process and performance – that are the hallmarks of successful investment managers.

As the report shows, 2019 was a good year for the Pension and Endowment portfolios, which delivered returns of 13.0% and 12.9% respectively (net of all fees and expenses). We’re also pleased with the longer-term results. The Pension and Endowment portfolios each generated annualized net returns of 7.6% during the past five years and 8.5% over the past 10 years, exceeding both the university’s target returns and the Reference Portfolio benchmarks for the same periods. Although UTAM underperformed the Reference Portfolio benchmark of 15.8% in 2019, value added over the longer term remains strong, with an annualized outperformance for the Pension and Endowment portfolios of 1.0% and 1.1% respectively over the last 10 years – representing a cumulative gain of more than $500 million.

As we were preparing this annual report, the COVID-19 pandemic struck, creating an unprecedented public health crisis and causing a severe economic downturn. The entire UTAM team has transitioned to working remotely, following well-planned protocols and processes – supported by flexible technologies – that ensure uninterrupted monitoring and management of the assets under our stewardship.

Daren Smith, UTAM’s President and Chief Investment Officer, offers reassuring words about the challenging investment climate. “We’ve built the Pension and Endowment portfolios for the long term, carefully balancing the mix of equity and fixed income investments to weather significant market movements – even as dramatic as what we’ve seen in early 2020,” he writes in his introductory message. “There is no need to change our strategy at this time.”

Download the 2019 Annual Report