Ontario Teachers’ Pension Plan is the latest FTX investor to break even

It’s relatively rare for an institutional investor to make a public statement about a loss on a venture capital investment, but nothing about FTX International’s $32 billion implosion and bankruptcy is normal.

Citing recent reports of possible fraud at FTX, the Ontario Teachers’ Pension Plan said the development “is deeply troubling to all parties” and that it fully supports efforts by regulators and others to review the risks and causes of failure at the company.

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The pension scheme also said it would strengthen its investment methods for future deals after it zeroed out its $95 million investment for less than a 1% stake in FTX.

The FTX loss amounts to less than 0.05% of the pension plan’s total net assets and remains in a strong financial position, according to a statement on the Ontario Teachers’ Pension Plan website.

“We are disappointed with the outcome of this investment, take all losses seriously and will use this experience to further strengthen our approach,” the Ontario Teachers’ Pension Plan said Thursday.

The Ontario Teachers’ Pension Plan currently manages $242.5 billion in assets for 333,000 current and future pensioners.

It is the latest major venture capital investor to issue FTX loss statements. SoftBank said it lost $100 million, and Singapore’s sovereign wealth fund Temasek invested between $200 million and $300 million in FTX, according to a report. Sequoia said it reduced the $214 million it invested in FTX to zero.

The Ontario Teachers’ Pension Plan invested $75 million in FTX in 2021, plus a $20 million investment in January, through its three-year Teachers’ Venture Growth (TVG) platform to “gain small-scale exposure to an emerging financial technology sector .

“Of course, not all investments in this early-stage asset class perform, however, since the beginning, TVG has consistently achieved its intended goals,” the pension plan added.

The pension fund conducted “robust due diligence” on all private investments and is supported by external advisers.

With FTX, the pension plan worked closely with third-party advisors to explore commercial, regulatory, tax, financial, technical and other issues.

“Recognizing that no due diligence process can uncover all risks, especially in the context of an emerging technology business, the investment in FTX was moderate relative to TVG and the overall plan portfolio,” the pension fund said.

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