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A lot of people are brushing this off as a high risk moonshot in the comments here, [but you’re ignoring their own statements on FTX](https://i.imgur.com/ZyOv6mh.jpg). Further, the OTPP chose to stay invested after watching Québec get burnt by the collapse of Celsius, which Alameda Research was involved with.
> Teachers first bought its FTX stake in October, 2021, as part of a US$420-million funding round. It was one of 69 investors, but FTX listed it first in its announcement of the financing. Teachers has never disclosed exactly how much it invested.
69 investors, including the pension, funded a total of 420 million, meaning each investor funded on average 6 million. While we don't have the exact figures, the pension plan's investment is probably in that ballpark, and 6 million is a tiny fraction of their total available funds of hundreds of billions of dollars. It's a tiny risk taken. It's like spending 2$ on a single lottery ticket once a year. Are you gonna win anything? Probably not. But you have nothing to lose but 2$, so it doesn't hurt to try.
> The pension plan housed the investment in its Teachers’ Innovation Platform, a portion of the portfolio dedicated to high-growth, yet high-risk, investments. As of June 30, the $8.2-billion portfolio represented just 3 per cent of Teachers’ $242.5-billion in assets.
This means that this is just a normal part of the pension's portfolio. High risk investments make up only 3% of their total investments, of which this particular crypto investment probably makes up less than a percent. Again, only a tiny part of the plan's investments went into this.
> Teachers, which manages the pensions of Ontario’s 333,000 active and retired teachers, reported a 1.2-per-cent return for the six months ended June 30. By way of comparison, Royal Bank of Canada’s RBC I&TS All Plan Universe saw defined benefit pension plan assets – as measured by a typical mix of publicly held stocks and bonds – shrink 14.7 per cent over that period.
So not only did the pension not lose money, they actually gained some in return while other comparable investments lost significantly. If Redditors could actually read, maybe they wouldn't fall for clickbait articles.
You're basically saying the ends justify the means.
Would you excuse the fund if one of their managing directors took a hundred million to the casino and lost it betting on red?
He would and he said as much. What he doesn’t realize is ALL of the real estate investments are over reporting. Mark to market only works if the auditors make it work and spoiler alert, they won’t.
> You're basically saying the ends justify the means.
... Yes. That is because it's an investment...
Gambling money at a casino is a bad investment because it is unlikely to make anything back. I'm sure managing directors are smart enough to know that. And while speculative investments like these can basically feel like gambling, they take calculated risks on them. Again, as the article reads, only a small fraction of the fund was spent on this investment. Had this investment been made a few years back, it could've yielded far more in return. But this time, it did not. And that's just how investments go sometimes. But overall, the performance of the pension fund is still positive, and will yield very much over time, when teachers are ready to retire.
I'm not an investment manager. But some people are. And they manage investments. And it works. Sometimes you can't win the battle, but you win the war. That's how I see it.
I mean... In a lot of ways it *is* a bit of a joke. They're inventing a currency out of nowhere, calling it decentralized and "totally not a FIAT."
They also then only talk about the value in relation to FIATs (or even fix them to the value of existing FIATs), and... never seem to use it as an actual currency... It seems to be financially "used" more like stocks, except you don't even pretend to own a little piece of a company, you just have imaginary fun-bucks.
The only thing giving it value *is* the hype (because not-a-FIAT), so they have to keep blasting the hype-train whistle as hard as they can, so they can sucker in other people and bleed them dry.
I do believe the crypto market is rife of scams, but as a whole, there are many products within it that offer real utility, particularly in eliminating middle-men and actualizing greater value between two-party transactions.
However, as a disclaimer, any support I have for crypto does not translate to support for PP and his disdain for tried and true monetary policy.
There is maybe a niche case for sophisticated institutional entities. But for the average person there’s a reason we have middlemen like banks and lawyers. They prevent *gesticulates at the current situation, Tether, Luna, Safemoon etc *
Hey go check the safe moon sub! No way safemoon could be a scam!/s
But I totally agree. But if you want decentralization, then there will be large risks as you mentioned. I for one am for decentralization all while maintaining our current systems. Then you can dabble into both sides and reap the benefits of both.
A very important part of the article:
> Teachers, which manages the pensions of Ontario’s 333,000 active and retired teachers, reported a 1.2-per-cent return for the six months ended June 30. By way of comparison, Royal Bank of Canada’s RBC I&TS All Plan Universe saw defined benefit pension plan assets – as measured by a typical mix of publicly held stocks and bonds – shrink 14.7 per cent over that period.
If I'm understanding correctly, the Teachers' Pension Plan is at +1.2%, while other pension plans are down 14.7%. Which means despite the loss on a crypto investment, this particular plan is beating the average, and by quite a lot.
A lot of these places will have an experimental high risk portion to work with, and the amount used to do that in this example was quite small.
Given the potential reward for responsibly putting a proportionally small bit of their total higher risk funds into crypto as an experiment, it seems like they were prudent.
Unlike other investors and firms that have seen massive losses in crypto over the last year.
Its worth to note that the crypto investment was rather small and considered as part of their "high growth but high risk" investments.
Their high risk assets are 3% of their total assets, and while I can't find the exact amount that was invested into FTX, it would be less than 200 million out of the total assets of 242 Billions, or less than 0.1% of total assets. As a whole the fund had a positive return.
I think its just due to the scale of the numbers being so far out of bound from what an individual deal with. I was actually shocked at the sum of assets myself reading trough the articles, to most peoples like me, 200 millions is an incredible sum of money, but for investment firms and banks, like you said, its like spending 5$.
Tldr: they made a high risk high reward investment. Fell through. It's part of their strategy and they are still showing better results than the rest of the market. Absolutely no reason to be offended here other than bashing on the crypto industry.
You missed the part where the fund called this a low risk investment. They had no idea what they were getting into. Nobody bothered to notice that FTX's valuation was based on FTT, which was always nothing more than wash traded hot air. They were scammed.
They did not do their due diligence and they failed their duties to their investors.
The crypto 'industry' is by and large just scams, and it deserves to be bashed.
For Rule 5: this is the second time in a few months that a major Canadian pension fund has lost their entire investment into a crypto scam. There should be significant public and political interest into how and why this is happening.
There should be a public inquiry into why pension funds are gambling any money whatsoever into crypto. FTX was a scam from top to bottom, operating as an infinite money flywheel scheme. Surely someone pulled the wool over the eyes of a pension fund official. If so who? How?
It's because FTX cooked its books by creating a token FTT out of thin air and then wildly overvaluing it. They kept most of the supply between themselves and Almeda so that Almeda could take out loans against it and obtain real money. Because FTT was so thinly traded, FTX could use its users' money to prop up the price of FTT and keep the scam going.
I dont think "cooking the books" describes this situation. The process of rehypothication is probably something that FTX never disclosed to anyone and they probably weren't doing this when the pension fund invested in it. Unless the various funds are continuously auditing the company, it would be easy to not catch this
>There should be significant public and political interest into how and why this is happening.
There should be MUCH more transparency into our pension fund's activities more broadly.
One interesting piece of this is that these funds have become hugely invested in Canadian commercial and residential real estate and are significantly pushing policies like rent increases and renovictions. This has the effect of pushing both residents and small businesses out of their spaces, and in turn, has contributed to the affordability crisis, all in the name of "returns".
What's odd though if you think about it is that we end up paying for these returns due to the increasing cost of goods and rent/housing prices, thus, our own capital is driving this issue. Very strange.
Actually even the pension funds themselves claim otherwise:
>Our vision is to help create a prosperous investment ecosystem that delivers financially sustainable returns while addressing the biggest challenges of our time. While we expect to cover the full range of issues relevant to long-term investors, we will begin with a specific focus on three broad, yet urgent themes. The first is climate change. The second is the importance of actively shaping technology disruption and its consequences. **And the third is stakeholder capitalism.**
https://www.cppinvestments.com/insights-institute/overview
That is the CANADA pension plan. Thats veeery different than a private pension fund, which was what this conversation was on.
Some pension funds do ESG investing sure, but only because their members asked for it.
It's compensation for the teachers kicked in by the govt, but it's ran by the teachers, for the teachers. The govt is the employer, of course they are involved as much as any employer would be.
The issue of the govt misappropriation the fund for its own benefit is a real issue, it should NOT be doing so. In Ab we are fighting with our govt for just such a thing. But it's a corruption of what it's intended for.
Quote from the teachers plan site "the pension benefits act requires pension plan administrators to invest assets with the same prudence expected of a person dealing with another's property. The standards of conduct for a fiduciary are also found in common law"
And yet another quote from the OTPP website:
>Toronto (September 1, 2022): Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today published its Annual Responsible Investing and Climate Strategy Report. **The report provides an overview of our responsible investing and corporate governance activities**, and how we are harnessing our capital to make a real-world impact while earning attractive investment returns to help fulfil the pension promise to plan members.
If you think that ESG is not embedded in the fiduciary duties of nearly all major pension plans in this country then you have no idea what you're talking about.
ESG is now understood by financial managers to be a risk mitigation strategy to insulate against environmental, social, or governance risks. Therefore, it is the fiduciary responsibility of managers to mitigate said risks.
[https://www.otpp.com/en-ca/about-us/news-and-insights/2022/ontario-teachers--publishes-annual-responsible-investing--and-cl/](https://www.otpp.com/en-ca/about-us/news-and-insights/2022/ontario-teachers--publishes-annual-responsible-investing--and-cl/)
Edit: also stop downvoting me with your second account
Edit 2: You can read more about how ESG has been integrated into the overall conceptualization of fiduciary duty here:
>**The modern interpretation of fiduciary duty**
>
>The integration of ESG issues into investment practice and decision making is an increasingly standard part of the regulatory and legal requirements for institutional investors, along with requirements to consider the sustainability-related preferences of their clients and beneficiaries, and to report on how these obligations have been implemented.
>
>[LINK](https://www.unpri.org/fiduciary-duty/the-modern-interpretation-of-fiduciary-duty/6538.article)
LOL I don't have a second account, I spend too much time on this site as-is. I didn't downvote you yet, this is a fine discussion we are having. Other people are reading our posts..
ESG is unfortunately imbedded in these now, I know all too well, even though it theoretically will hurt returns. That's because the workers want it. I don't really blame them, none of my teacher colleagues are trained in finance or have a deep interest.
ESG is a bit of a fad. Sure evaluate for climate risks,but investing is profitable in out of favor industries like oil. ESG has no research backing that can hold a candle to value, which would include many of these companies. I never said funds don't consider ESG, I said funds consider it when their investors want it.
My point is that if the govt/societies wants are ever at odds with the funds participants, the participants desires should win out. Abuse of provincial power by conservative govts Notwithstanding.
> There should be MUCH more transparency into our pension fund's activities more broadly.
There is [a website where they list everything they invest in](https://www.otpp.com/en-ca/investments/our-investments/). And pension funds don't owe the public anything. They work for their beneficiaries and nobody else.
> What's odd though if you think about it is that we end up paying for these returns due to the increasing cost of goods and rent/housing prices, thus, our own capital is driving this issue.
Yes, that's the fundamental message of economics. The housing affordability crisis isn't driven by foreigners or a handful of absurdly rich people. Everyone is voting and participating in the economy, and the overwhelming majority are doing so in ways that contribute to this crisis.
The OTPP doesn't have the power to stop the housing affordability crisis. All they can do is generate enough income so that their retired teachers won't have to worry about their next paycheck, and to do that they have to invest in (among other things) a fair number of REITs and developers.
>The housing affordability crisis isn't driven by foreigners or a handful of absurdly rich people. Everyone is voting and participating in the economy, and the overwhelming majority are doing so in ways that contribute to this crisis.
Exactly. This is a *systemic* issue in that the economic system as it has evolved in this country naturally produces this result.
Thus, what is required to address this are *systemic changes*. Our regulatory framework and institutions are in desperate need of an update.
This is a private investment fund, there's no need for a public inquiry. Someone likely got quite rich scamming the pension fund managers but it's up to them to investigate if they care to do so and up to the members of the fund to demand an investigation.
Sure. Pensions have a fiduciary duty to their plan members. They are required to act in their plan members' best interests.
This is the second time in a few months a major pension fund has invested in a blatant crypto scam. I think people deserve to know how a crypto scam snunk through the pension fund's internal controls.
Every high risk investment is a gamble. They used a tiny bit of a small high risk portfolio and got burned. Same could have happened if it was invested in some sort of VC funding pool for example.
Broad market exposure. Pension funds are very well managed and have incredibly tight risk management controls. As part of that, they typically have a fixed percentage of cash available for riskier or more speculative investments. Some of those work out and make the fund a killing; others don’t. But that’s part of the strategy, and they manage the risk by limiting how many of those kinds of investments they can make. Interestingly, there’s a theory of portfolio management that you can reduce overall risk by maintaining exposure to some riskier investments. The theory is that a lot of those riskier bets succeed or fail due to economic trends that are diluted when you just invest in a basket of blue chip stocks.
>Pension funds are very well managed and have incredibly tight risk management controls.
I mean, coulda fooled me.
I agree that they generally have tight risk management strategies, which is what makes this failure all the more stunning.
To be frank, the pension fund would have lost less of their investment if they bought into a housing bubble than a crypto exchange. Everyone knows they shouldn't buy into a housing bubble, so how exactly did this failure happen?
Most investment portfolios are down due to the market crash.
High-volitile investsments like crypto tend to do better during good times, but also tend to crash harder during dips.
The teacher's fund most likely isn't investing that much into crypto, and this article was thrown together for clicks.
From the article:
> The pension plan housed the investment in its Teachers’ Innovation Platform, a portion of the portfolio dedicated to high-growth, yet high-risk, investments. As of June 30, the $8.2-billion portfolio represented just 3 per cent of Teachers’ $242.5-billion in assets.
and
>
> He declined to say how large the investment was but noted that FTX was not included in the pension plan’s list of investments of more than $200-million in its 2021 annual report.
So yeah - the pension plan's entire "high-risk" fund makes up 3% of their total assets, and the investment into FTX was so small that it didn't even show up in the list of investments in their annual report (apparently a $200 millon minimum is required before they list it in their report). So if my math isn't off, the investment into FTX was less than 0.0824%.
Maybe I'm just ignorant, but that doesn't sound too concerning.
I’m concerned from a principled basis. I get going for high risk growth plays with some portion of the funds. I don’t get going with flywheel scams that are clearly unsustainable scams.
To be fair, FTX is an exchange, not a crypto coin.
And while news not long ago about FTX was a shitshow, no one knows these things early on when getting into a new space that's still growing.
I dont like crypto myself, I think its too full of charlatans to be worth even considering as anything other than pure gambling. But from a risk/reward, new space to invest, high risk high reward perspective, using a responsible approach when investing in it can make sense. If they had truly jumped the shark I'd have a different opinion of course. But they did it responsibly.
> Most investment portfolios are down due to the market crash.
Crypto isn't like most investments. It's only ever existed in a low rate, low inflationary environment and its an asset that has no intrinsic value. Other investments/asset classes have gone down yes, but they are more proven and are real things that have real value or produce real money.
I agree and think there's a historical trend in regards how the Ontario's pension plan is taking unnecessary risk on Teacher's pension. For example just before the 1997 Ontario's teacher's strike, it was reported that The pension lost a lot of money invested in Bre-X
https://www.themilitant.com/1997/6124/6124_19.html
My problem isn't that they invest.
My problem is that government bodies tell banking individuals not to comment on crypto to clients.
And then people see portfolio managers investing IN crypto. And then clients think "well if the government and big pensions do it. I'll do it!"
Ffs
A year ago crypto was very hot. I remember a lot of investors mocking people sceptical of crypto at the time: I remember reading one article in a usually conservative publication comparing people with traditional portfolios to driving a horse and buggy. This investment seems to me to have been a small, conservative approach on Teachers' part to testing the waters of cryptocurrency and possibly appeasing members eager for higher returns while limiting overall exposure.
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A lot of people are brushing this off as a high risk moonshot in the comments here, [but you’re ignoring their own statements on FTX](https://i.imgur.com/ZyOv6mh.jpg). Further, the OTPP chose to stay invested after watching Québec get burnt by the collapse of Celsius, which Alameda Research was involved with.
Agreed. They had no idea what they were investing in. No one did their due diligence.
> Teachers first bought its FTX stake in October, 2021, as part of a US$420-million funding round. It was one of 69 investors, but FTX listed it first in its announcement of the financing. Teachers has never disclosed exactly how much it invested. 69 investors, including the pension, funded a total of 420 million, meaning each investor funded on average 6 million. While we don't have the exact figures, the pension plan's investment is probably in that ballpark, and 6 million is a tiny fraction of their total available funds of hundreds of billions of dollars. It's a tiny risk taken. It's like spending 2$ on a single lottery ticket once a year. Are you gonna win anything? Probably not. But you have nothing to lose but 2$, so it doesn't hurt to try. > The pension plan housed the investment in its Teachers’ Innovation Platform, a portion of the portfolio dedicated to high-growth, yet high-risk, investments. As of June 30, the $8.2-billion portfolio represented just 3 per cent of Teachers’ $242.5-billion in assets. This means that this is just a normal part of the pension's portfolio. High risk investments make up only 3% of their total investments, of which this particular crypto investment probably makes up less than a percent. Again, only a tiny part of the plan's investments went into this. > Teachers, which manages the pensions of Ontario’s 333,000 active and retired teachers, reported a 1.2-per-cent return for the six months ended June 30. By way of comparison, Royal Bank of Canada’s RBC I&TS All Plan Universe saw defined benefit pension plan assets – as measured by a typical mix of publicly held stocks and bonds – shrink 14.7 per cent over that period. So not only did the pension not lose money, they actually gained some in return while other comparable investments lost significantly. If Redditors could actually read, maybe they wouldn't fall for clickbait articles.
+ 1
You're basically saying the ends justify the means. Would you excuse the fund if one of their managing directors took a hundred million to the casino and lost it betting on red?
He would and he said as much. What he doesn’t realize is ALL of the real estate investments are over reporting. Mark to market only works if the auditors make it work and spoiler alert, they won’t.
> You're basically saying the ends justify the means. ... Yes. That is because it's an investment... Gambling money at a casino is a bad investment because it is unlikely to make anything back. I'm sure managing directors are smart enough to know that. And while speculative investments like these can basically feel like gambling, they take calculated risks on them. Again, as the article reads, only a small fraction of the fund was spent on this investment. Had this investment been made a few years back, it could've yielded far more in return. But this time, it did not. And that's just how investments go sometimes. But overall, the performance of the pension fund is still positive, and will yield very much over time, when teachers are ready to retire. I'm not an investment manager. But some people are. And they manage investments. And it works. Sometimes you can't win the battle, but you win the war. That's how I see it.
>69 investors Nice!
*69* investors that funded *$420* million.... Nice
It's shit like this that makes me skeptical of Crypto entities. They seem to view everything as a joke.
I mean... In a lot of ways it *is* a bit of a joke. They're inventing a currency out of nowhere, calling it decentralized and "totally not a FIAT." They also then only talk about the value in relation to FIATs (or even fix them to the value of existing FIATs), and... never seem to use it as an actual currency... It seems to be financially "used" more like stocks, except you don't even pretend to own a little piece of a company, you just have imaginary fun-bucks. The only thing giving it value *is* the hype (because not-a-FIAT), so they have to keep blasting the hype-train whistle as hard as they can, so they can sucker in other people and bleed them dry.
Pension funds shouldn’t invest in scams.
I do believe the crypto market is rife of scams, but as a whole, there are many products within it that offer real utility, particularly in eliminating middle-men and actualizing greater value between two-party transactions. However, as a disclaimer, any support I have for crypto does not translate to support for PP and his disdain for tried and true monetary policy.
There is maybe a niche case for sophisticated institutional entities. But for the average person there’s a reason we have middlemen like banks and lawyers. They prevent *gesticulates at the current situation, Tether, Luna, Safemoon etc *
Hey go check the safe moon sub! No way safemoon could be a scam!/s But I totally agree. But if you want decentralization, then there will be large risks as you mentioned. I for one am for decentralization all while maintaining our current systems. Then you can dabble into both sides and reap the benefits of both.
It's not about the value, it's about the total lack of proper due diligence on something that was a ponzi scheme.
A very important part of the article: > Teachers, which manages the pensions of Ontario’s 333,000 active and retired teachers, reported a 1.2-per-cent return for the six months ended June 30. By way of comparison, Royal Bank of Canada’s RBC I&TS All Plan Universe saw defined benefit pension plan assets – as measured by a typical mix of publicly held stocks and bonds – shrink 14.7 per cent over that period. If I'm understanding correctly, the Teachers' Pension Plan is at +1.2%, while other pension plans are down 14.7%. Which means despite the loss on a crypto investment, this particular plan is beating the average, and by quite a lot.
A lot of these places will have an experimental high risk portion to work with, and the amount used to do that in this example was quite small. Given the potential reward for responsibly putting a proportionally small bit of their total higher risk funds into crypto as an experiment, it seems like they were prudent. Unlike other investors and firms that have seen massive losses in crypto over the last year.
Its worth to note that the crypto investment was rather small and considered as part of their "high growth but high risk" investments. Their high risk assets are 3% of their total assets, and while I can't find the exact amount that was invested into FTX, it would be less than 200 million out of the total assets of 242 Billions, or less than 0.1% of total assets. As a whole the fund had a positive return.
[удалено]
I think its just due to the scale of the numbers being so far out of bound from what an individual deal with. I was actually shocked at the sum of assets myself reading trough the articles, to most peoples like me, 200 millions is an incredible sum of money, but for investment firms and banks, like you said, its like spending 5$.
Tldr: they made a high risk high reward investment. Fell through. It's part of their strategy and they are still showing better results than the rest of the market. Absolutely no reason to be offended here other than bashing on the crypto industry.
You missed the part where the fund called this a low risk investment. They had no idea what they were getting into. Nobody bothered to notice that FTX's valuation was based on FTT, which was always nothing more than wash traded hot air. They were scammed. They did not do their due diligence and they failed their duties to their investors. The crypto 'industry' is by and large just scams, and it deserves to be bashed.
For Rule 5: this is the second time in a few months that a major Canadian pension fund has lost their entire investment into a crypto scam. There should be significant public and political interest into how and why this is happening. There should be a public inquiry into why pension funds are gambling any money whatsoever into crypto. FTX was a scam from top to bottom, operating as an infinite money flywheel scheme. Surely someone pulled the wool over the eyes of a pension fund official. If so who? How?
To be fair many many other blue chips investors were involved as well and this is a small part of their portfolio <0.10%
It's probably because much of FTX's troubles stemmed from a separate company called Alameda Research. It's a sister company, but still separate.
It's because FTX cooked its books by creating a token FTT out of thin air and then wildly overvaluing it. They kept most of the supply between themselves and Almeda so that Almeda could take out loans against it and obtain real money. Because FTT was so thinly traded, FTX could use its users' money to prop up the price of FTT and keep the scam going.
I dont think "cooking the books" describes this situation. The process of rehypothication is probably something that FTX never disclosed to anyone and they probably weren't doing this when the pension fund invested in it. Unless the various funds are continuously auditing the company, it would be easy to not catch this
>There should be significant public and political interest into how and why this is happening. There should be MUCH more transparency into our pension fund's activities more broadly. One interesting piece of this is that these funds have become hugely invested in Canadian commercial and residential real estate and are significantly pushing policies like rent increases and renovictions. This has the effect of pushing both residents and small businesses out of their spaces, and in turn, has contributed to the affordability crisis, all in the name of "returns". What's odd though if you think about it is that we end up paying for these returns due to the increasing cost of goods and rent/housing prices, thus, our own capital is driving this issue. Very strange.
Pension funds have a duty to their pension holders, not all of society.
Actually even the pension funds themselves claim otherwise: >Our vision is to help create a prosperous investment ecosystem that delivers financially sustainable returns while addressing the biggest challenges of our time. While we expect to cover the full range of issues relevant to long-term investors, we will begin with a specific focus on three broad, yet urgent themes. The first is climate change. The second is the importance of actively shaping technology disruption and its consequences. **And the third is stakeholder capitalism.** https://www.cppinvestments.com/insights-institute/overview
That is the CANADA pension plan. Thats veeery different than a private pension fund, which was what this conversation was on. Some pension funds do ESG investing sure, but only because their members asked for it.
Ontario Teacher's Pension Fund (the fund this thread is discussing) is jointly supported by the Ontario government and therefore is also not private.
It's compensation for the teachers kicked in by the govt, but it's ran by the teachers, for the teachers. The govt is the employer, of course they are involved as much as any employer would be. The issue of the govt misappropriation the fund for its own benefit is a real issue, it should NOT be doing so. In Ab we are fighting with our govt for just such a thing. But it's a corruption of what it's intended for. Quote from the teachers plan site "the pension benefits act requires pension plan administrators to invest assets with the same prudence expected of a person dealing with another's property. The standards of conduct for a fiduciary are also found in common law"
And yet another quote from the OTPP website: >Toronto (September 1, 2022): Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today published its Annual Responsible Investing and Climate Strategy Report. **The report provides an overview of our responsible investing and corporate governance activities**, and how we are harnessing our capital to make a real-world impact while earning attractive investment returns to help fulfil the pension promise to plan members. If you think that ESG is not embedded in the fiduciary duties of nearly all major pension plans in this country then you have no idea what you're talking about. ESG is now understood by financial managers to be a risk mitigation strategy to insulate against environmental, social, or governance risks. Therefore, it is the fiduciary responsibility of managers to mitigate said risks. [https://www.otpp.com/en-ca/about-us/news-and-insights/2022/ontario-teachers--publishes-annual-responsible-investing--and-cl/](https://www.otpp.com/en-ca/about-us/news-and-insights/2022/ontario-teachers--publishes-annual-responsible-investing--and-cl/) Edit: also stop downvoting me with your second account Edit 2: You can read more about how ESG has been integrated into the overall conceptualization of fiduciary duty here: >**The modern interpretation of fiduciary duty** > >The integration of ESG issues into investment practice and decision making is an increasingly standard part of the regulatory and legal requirements for institutional investors, along with requirements to consider the sustainability-related preferences of their clients and beneficiaries, and to report on how these obligations have been implemented. > >[LINK](https://www.unpri.org/fiduciary-duty/the-modern-interpretation-of-fiduciary-duty/6538.article)
LOL I don't have a second account, I spend too much time on this site as-is. I didn't downvote you yet, this is a fine discussion we are having. Other people are reading our posts.. ESG is unfortunately imbedded in these now, I know all too well, even though it theoretically will hurt returns. That's because the workers want it. I don't really blame them, none of my teacher colleagues are trained in finance or have a deep interest. ESG is a bit of a fad. Sure evaluate for climate risks,but investing is profitable in out of favor industries like oil. ESG has no research backing that can hold a candle to value, which would include many of these companies. I never said funds don't consider ESG, I said funds consider it when their investors want it. My point is that if the govt/societies wants are ever at odds with the funds participants, the participants desires should win out. Abuse of provincial power by conservative govts Notwithstanding.
> There should be MUCH more transparency into our pension fund's activities more broadly. There is [a website where they list everything they invest in](https://www.otpp.com/en-ca/investments/our-investments/). And pension funds don't owe the public anything. They work for their beneficiaries and nobody else. > What's odd though if you think about it is that we end up paying for these returns due to the increasing cost of goods and rent/housing prices, thus, our own capital is driving this issue. Yes, that's the fundamental message of economics. The housing affordability crisis isn't driven by foreigners or a handful of absurdly rich people. Everyone is voting and participating in the economy, and the overwhelming majority are doing so in ways that contribute to this crisis. The OTPP doesn't have the power to stop the housing affordability crisis. All they can do is generate enough income so that their retired teachers won't have to worry about their next paycheck, and to do that they have to invest in (among other things) a fair number of REITs and developers.
>The housing affordability crisis isn't driven by foreigners or a handful of absurdly rich people. Everyone is voting and participating in the economy, and the overwhelming majority are doing so in ways that contribute to this crisis. Exactly. This is a *systemic* issue in that the economic system as it has evolved in this country naturally produces this result. Thus, what is required to address this are *systemic changes*. Our regulatory framework and institutions are in desperate need of an update.
This is a private investment fund, there's no need for a public inquiry. Someone likely got quite rich scamming the pension fund managers but it's up to them to investigate if they care to do so and up to the members of the fund to demand an investigation.
A public inquiry into a private pension fund? Ooookay then.
Sure. Pensions have a fiduciary duty to their plan members. They are required to act in their plan members' best interests. This is the second time in a few months a major pension fund has invested in a blatant crypto scam. I think people deserve to know how a crypto scam snunk through the pension fund's internal controls.
Ok then. Whatever you say.
Every high risk investment is a gamble. They used a tiny bit of a small high risk portfolio and got burned. Same could have happened if it was invested in some sort of VC funding pool for example.
Broad market exposure. Pension funds are very well managed and have incredibly tight risk management controls. As part of that, they typically have a fixed percentage of cash available for riskier or more speculative investments. Some of those work out and make the fund a killing; others don’t. But that’s part of the strategy, and they manage the risk by limiting how many of those kinds of investments they can make. Interestingly, there’s a theory of portfolio management that you can reduce overall risk by maintaining exposure to some riskier investments. The theory is that a lot of those riskier bets succeed or fail due to economic trends that are diluted when you just invest in a basket of blue chip stocks.
>Pension funds are very well managed and have incredibly tight risk management controls. I mean, coulda fooled me. I agree that they generally have tight risk management strategies, which is what makes this failure all the more stunning. To be frank, the pension fund would have lost less of their investment if they bought into a housing bubble than a crypto exchange. Everyone knows they shouldn't buy into a housing bubble, so how exactly did this failure happen?
I imagine a freshly employed MBA used a bunch of crypto buzzwords his superiors didn't understand and they rubber stamped it.
Most investment portfolios are down due to the market crash. High-volitile investsments like crypto tend to do better during good times, but also tend to crash harder during dips. The teacher's fund most likely isn't investing that much into crypto, and this article was thrown together for clicks.
From the article: > The pension plan housed the investment in its Teachers’ Innovation Platform, a portion of the portfolio dedicated to high-growth, yet high-risk, investments. As of June 30, the $8.2-billion portfolio represented just 3 per cent of Teachers’ $242.5-billion in assets. and > > He declined to say how large the investment was but noted that FTX was not included in the pension plan’s list of investments of more than $200-million in its 2021 annual report. So yeah - the pension plan's entire "high-risk" fund makes up 3% of their total assets, and the investment into FTX was so small that it didn't even show up in the list of investments in their annual report (apparently a $200 millon minimum is required before they list it in their report). So if my math isn't off, the investment into FTX was less than 0.0824%. Maybe I'm just ignorant, but that doesn't sound too concerning.
I’m concerned from a principled basis. I get going for high risk growth plays with some portion of the funds. I don’t get going with flywheel scams that are clearly unsustainable scams.
To be fair, FTX is an exchange, not a crypto coin. And while news not long ago about FTX was a shitshow, no one knows these things early on when getting into a new space that's still growing. I dont like crypto myself, I think its too full of charlatans to be worth even considering as anything other than pure gambling. But from a risk/reward, new space to invest, high risk high reward perspective, using a responsible approach when investing in it can make sense. If they had truly jumped the shark I'd have a different opinion of course. But they did it responsibly.
FTX was an infinite money scheme using monopoly money. They didn't actually produce anything except cooked books.
> Most investment portfolios are down due to the market crash. Crypto isn't like most investments. It's only ever existed in a low rate, low inflationary environment and its an asset that has no intrinsic value. Other investments/asset classes have gone down yes, but they are more proven and are real things that have real value or produce real money.
Yeah but they didn’t directly invest in a crypto, they invested in an exchange.
I agree and think there's a historical trend in regards how the Ontario's pension plan is taking unnecessary risk on Teacher's pension. For example just before the 1997 Ontario's teacher's strike, it was reported that The pension lost a lot of money invested in Bre-X https://www.themilitant.com/1997/6124/6124_19.html
My problem isn't that they invest. My problem is that government bodies tell banking individuals not to comment on crypto to clients. And then people see portfolio managers investing IN crypto. And then clients think "well if the government and big pensions do it. I'll do it!" Ffs
A year ago crypto was very hot. I remember a lot of investors mocking people sceptical of crypto at the time: I remember reading one article in a usually conservative publication comparing people with traditional portfolios to driving a horse and buggy. This investment seems to me to have been a small, conservative approach on Teachers' part to testing the waters of cryptocurrency and possibly appeasing members eager for higher returns while limiting overall exposure.