The Healthcare of Ontario Pension Plan leaned heavily on strong stock markets to report a 7.7-per-cent investment gain last year, even as returns from private markets were sluggish against a turbulent economic backdrop.
HOOPP’s one-year results trailed the benchmark return that the plan uses to measure its performance, which was 8.6 per cent. That relative underperformance was partly attributed to challenges with two specific investments – one in infrastructure and another in private credit.
But a 22.2-per-cent return from HOOPP’s portfolio of publicly traded stocks, which it bulked up last year after U.S. President Donald Trump announced broad and punitive tariffs, kept the plan’s investment gains near their longer-term average.
Over 10 years, HOOPP’s average annual return was 7.8 per cent.
Net assets increased to $132-billion last year, from $123-billion a year earlier. The plan is 109-per-cent funded, meaning it has $1.09 for every dollar it expects to pay out in pensions.
The fallout from tariffs and a period of high inflation undermined some of the bedrock economic assumptions that long-term investors such as pension plans have relied on for years. At the same time, valuations for private assets such as real estate and private equity came under pressure as buyers and sellers struggled to agree on prices and deal-making slowed.
“It was obviously a year full of lots of complexity,” HOOPP chief executive officer Annesley Wallace said in an interview. “Particularly in that context, we feel good about the 7.7-per-cent return.”
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HOOPP invests on behalf of more than 504,000 members and 870 employers in Ontario’s health care sector, including nurses, medical technicians and, more recently, physicians.
In infrastructure – typically one of the most stable asset classes, producing steady cash flows – a single HOOPP investment in the U.S. renewable energy sector ran into problems. That dragged down the portfolio’s return, which was 1.8 per cent last year, underscoring the volatility in renewable energy after the Trump administration reversed course on climate policies and offshore wind development.
HOOPP did not name the problematic infrastructure investment.
Similarly, in private credit, HOOPP’s 0.9-per-cent annual return was hampered by “issuer-specific performance challenges in a single credit investment,” according to the pension plan’s annual report released on Tuesday.
Investors have been jittery about private credit as a number of lenders have grappled with ways to meet clients’ requests for redemptions, most recently U.S. giants such as Blue Owl Capital Inc. OWL-N and Blackstone Inc. BX-N
“We see opportunity in private credit,” Ms. Wallace said, but she emphasized the importance of “being disciplined” about where to make loans.
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All of HOOPP’s portfolios of private assets ended the year with positive returns, with private equity gaining 3.6 per cent and real estate up 1.1 per cent.
The pension plan ended 2025 with 49 per cent of its assets invested in Canada and 29 per cent in the United States.
Ms. Wallace said the plan is keen to make more Canadian-based investments if the right deals are available, some of which might be smaller in scale and faster to get off the ground than the major, nation-building projects that the federal government has flagged for fast-track approvals.
“There’s lots of active discussions,” she said.
HOOPP is also defending a years-long dispute with Dutch tax authorities over transactions in the Netherlands from 2013 to 2018. A Dutch court ruled that HOOPP wrongly claimed about $340-million of dividend tax refunds through a trading strategy that took advantage of the pension fund’s favourable tax status in the country. HOOPP is appealing the decision.
“We continue to defend ourselves against those allegations,” Ms. Wallace said. “We have very strong governance and risk management.”
In recent weeks, the Caisse de dépôt et placement du Québec reported a 9.3-per-cent gain for 2025, the Ontario Municipal Employees Retirement System (OMERS) was up 6 per cent and Ontario Teachers’ Pension Plan reported a 6.7-per-cent return on Tuesday.