In mild of the continued developments relating to FTKS, we wished to offer further context and transparency round our funding.
In October 2021, Ontario Lecturers’ invested US$75 million in FTKS Worldwide and its US entity (FTKS.US). In January 2022, we made a follow-on funding of USD 20 million in FTKS.US. These investments have been made by way of our Lecturers’ Enterprise Development (TVG) platform, alongside various international traders, to realize small-scale publicity to rising areas of the monetary expertise sector. Our funding represented lower than 0.05% of our complete web belongings and was equal to possession of 0.4% and 0.5% of FTKS Worldwide and FTKS.US, respectively.
TVG was based in 2019 to spend money on rising expertise corporations which are elevating late-stage funding and progress capital. Investments are structured to offer Ontario academics with a return commensurate with the chance taken and to offer proprietary insights that inform investments elsewhere within the Plan. In fact, not all investments on this asset class meet expectations at an early stage, nevertheless, from the very starting, TVG solidly achieved its deliberate objectives.
Ontario Lecturers’ funding departments, together with TVG, conduct strict due diligence on all personal investments. Supported by skilled exterior consultants with monetary, industrial and different related experience, and sometimes in session with funding companions, due diligence is designed to make use of supplies offered by the corporate and different analysis to evaluate the dangers related to a specific funding. Within the case of FTKS, our acquisition course of concerned working carefully with impartial advisors and FTKS to analyze industrial, regulatory, tax, monetary, technical and different issues. Recognizing that no due diligence course of can uncover all dangers, particularly within the context of rising expertise companies, the funding in FTKS was average relative to TVG and the Plan’s general portfolio.
Latest stories point out potential fraud in FTKS, which is of deep concern to all events. We totally help the efforts of regulators and others to overview the dangers and causes of the failure of this enterprise.
Our technique goals to diversify investments throughout asset courses, geographies, time horizons and financial efficiency to mitigate threat and maximize returns. This helps the Plan’s capacity to carry out nicely in a wide range of funding environments and mitigates the unfavourable impression of any funding loss on the fund as a complete. The scale of the funding in FTKS displays our strategy to diversification.
We are going to write down our funding in FTKS to zero on the finish of the yr. The monetary loss from this funding could have a restricted impression on the Plan, given its dimension relative to our complete web belongings and our robust monetary place. Nonetheless, we’re dissatisfied with the end result of this funding, we take all losses significantly and can use this expertise to additional strengthen our strategy.
Up to date on November 17, 2022