HOOPP’s new CEO says investing world is changing, portfolios have to be more adaptable

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Annesley Wallace’s first day as chief executive officer of the $123-billion Healthcare of Ontario Pension Plan was April 1.

One day later, U.S. President Donald Trump announced his “Liberation Day” tariffs, and markets took a nose dive. That kicked off what one analyst dubbed “Liquidation Day,” as investors scrambled to understand what would happen next.

Ms. Wallace was a new face at HOOPP and, luckily, she spent the months leading up to that day having dozens of one-on-one meetings to get to know staff before a transition with her predecessor CEO, Jeff Wendling, in March.

“It wasn’t like I was walking into a room saying, ‘Nice to meet you, I’m Annesley, and could we talk right now about what we’re seeing in the market?’ ” she said in an interview.

She stopped short of calling the tariff fallout a full-on crisis, but nevertheless, “it accelerates the learning curve dramatically.”

More than that, the chaos and uncertainty rattling investors this year has underscored a core tenet of a new 2030 strategic plan, just released, that Ms. Wallace drafted with HOOPP’s board: The fund needs to be better able to adapt when things go sideways.

“The world is changing in a way that I think we should anticipate more of this happening,” she said.

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Large pension fund managers that invested in an era of low interest rates and inflation, taking relatively low risks and holding big bond portfolios, found that some of the normal correlations in markets “just broke,” she said.

Prices for stocks and bonds have at times fallen together in recent years, instead of moving in opposite directions as expected. And more recently, safe havens such as the U.S. dollar are looking less reliable.

“You can’t take for granted some of what you used to skip over, quite honestly,” she said.

HOOPP has had good annual returns of late – 10 per cent in 2024 and 9.4 per cent the year before – and is more than fully funded with 111 per cent of its expected obligations to pensioners.

For the next five years, making HOOPP’s portfolio more adaptable so it can be resilient to shocks is one of the three pillars of Ms. Wallace’s plan. And that means digging in to do some of the wonk-ish work to make sure it can adapt when markets act in unpredictable ways.

Ms. Wallace came to HOOPP with plenty of experience in the pension sector. She spent 11 years at Ontario Municipal Employees Retirement System (OMERS), where she was global head of a $32-billion infrastructure division, and also chief pension officer.

She also brings corporate experience in strategy and operations, at engineering and construction company AtkinsRéalis – then known as SNC-Lavalin – and more recently at pipeline company TC Energy.

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When Ms. Wallace arrived at HOOPP early this year, she parked herself next to the capital markets and investing teams in a corner office with a view of Toronto Harbour. Once she took over as CEO a few months later, instead of moving to Mr. Wendling’s office behind a glassed-in reception desk, she stayed put.

She chose proximity to the investing staff as she works to tweak the way HOOPP builds its portfolio to use a “total portfolio approach.” It is a popular investing philosophy among large pension funds that aims to move away from using rigid targets to divide money between asset classes, or assuming certain types of investments will necessarily carry similar levels of risk.

In effect, the real estate team has to show why its investment is a better bet than a competing deal from the private equity or infrastructure teams, taking into account how that will tilt the balance of expected return and underlying risk across the whole fund.

Over time, that could lead HOOPP to emphasize certain types of investments over others, depending on the economic backdrop.

The attributes investors look for in different kinds of assets “have become more complicated,” she said. As energy infrastructure shifts from extracting fossil fuels to building wind, solar and batteries, as well as capturing carbon emissions, it is “not the same thing” for investors.

HOOPP has the largest relative share of its portfolio invested in Canada – 50 per cent, or nearly $62-billion – of any of the country’s eight largest pension fund managers.

HOOPP plans to allow self-employed Ontario doctors to join pension plan for the first time

Ms. Wallace said she is “very hopeful” there will be big infrastructure projects where HOOPP could take part, as the federal government promises to make major investments in areas such as energy and defence to build a more robust economy that relies less on the United States.

But after years of false starts and drawn-out approval processes, there needs to be “the commitment to actually get the projects built,” she said, and to find “the right business models” to fund them.

“Then my belief is that the capital from the pension plans will be there,” she said.

Ms. Wallace kept HOOPP’s chief investment officer, Michael Wissell, in place to lead the revamped investment approach. But she shook up her leadership team, bringing in new chief financial officer Reena Carter from OMERS and promoting Linda Halley to chief risk officer.

Another priority for Ms. Wallace is to expand HOOPP’s membership, which includes nearly 479,000 nurses, medical technicians and other health care workers. One of Mr. Wendling’s last major moves as CEO was to open the plan to Ontario’s self-employed doctors, and hundreds have since applied to join, she said.

HOOPP also reached an agreement to have employees at SickKids Hospital in Toronto join the plan at the end of this year.

Hospital staff make up 80 per cent of HOOPP’s membership, but only about four in five eligible members at the largest employers choose to join, and Ms. Wallace wants to raise participation rates.

Small health care providers such as mental-health clinics, hospices, long-term care homes and Indigenous health access centres are among the fastest-growing segment of HOOPP.

“Those are areas that are quite likely to continue to grow in terms of demand,” she said, “so we want to be there to support that growth.”