“Iconic teams almost always grow in value”: OMERS CEO Blake Hutcheson on investing in the Leafs

“Iconic teams almost always grow in value”: OMERS CEO Blake Hutcheson on investing in the Leafs

The pension plan leader is betting that his fund’s investment in MLSE will be a win for his members—even if the teams lose

OMERS CEO Blake Hutcheson

You’re responsible for the pensions of 600,000 civil servants—$130 billion in assets. Is that as stressful as it sounds?
There’s a huge sense of purpose that comes with knowing that our work affects one in 11 homes in Ontario. It was especially motivating during the pandemic. Our members are mostly front-liners, such as child care workers and first responders. Heroes.

OMERS hit a rough patch at the outset of the pandemic. How did you respond?
We’re a bit more conservative than Bay Street in how we manage risk. A lot of our holdings are in real estate, so we woke up with our malls, airports and theatres all shut down. But it’s funny that people focus on those few weeks. From June 2020 to June 2023, we morphed our portfolio by becoming more liquid, selling down retail and hospitality stocks.

So your strategy is more tortoise than hare?
I’m not sure I want OMERS to be characterized as a tortoise! But we are about steady gains across generations. I’m from Huntsville, and my grand­father would always say that you must leave the campsite better than you found it. That’s how I approach my job.

How does a kid from Huntsville end up in charge of a massive corporation?
I grew up in an entrepreneurial family. My Scottish ancestors arrived via Ireland in 1847 and quickly learned how easily they could starve to death. My grand­father was in timber, and then my father figured out how to harvest sand and gravel. Their success allowed me to attend great schools: Upper Canada College, the London School of Economics and Columbia, where I studied real estate. That’s how I ended up running OMERS’s real estate firm, Oxford Properties. Then, in 2020, they asked me to take over the whole company.

OMERS recently bought a five per cent stake in MLSE for $547 million. Be honest: was that a shrewd move or the fulfillment of your childhood dream to own a sports empire?
Ha! I’m focused on working with terrific partners. Still, how great is it to have 600,000 Ontarians with an ownership stake in our teams? I travel around to speak with members, and there’s already a lot of excitement. First, they want to be sure they can retire comfortably. Then they ask me about MLSE.

What’s your relationship like with the new MLSE CEO, Keith Pelley?
I don’t know Keith, but I’ve heard great things about him as a person and a business mind. We look forward to hearing about his vision.

Related: Can MLSE chairman Larry Tanenbaum transform his losing legacy?

The Leafs are reportedly worth $3.7 billion—the NHL’s most valuable franchise. I guess profits can soar even when the product is mediocre?
We’re optimistic about our teams winning in the future, but as an investment, there are other factors. The Leafs are an iconic team with a long history and a huge reach. Teams such as these almost always grow in value.

Based on all the billionaires who want to own franchises?
Based on scarcity. In a rare-asset environment, value tends to go up as more people can afford to buy.

When the Ontario Teachers’ Pension Plan bought in to the Leafs 30 years ago, the team choked and everyone blamed the teachers. Are you concerned?
That was then, and this is now—we’re in a different time with a different owner.

Sure, but sports fans tend to criticize franchise owners, even in the best of times.
Look, I get it. I’m a sports fan myself. Fans invest their hearts and souls, their time, and their hard-earned dollars in their teams, and they want to see them win. We all want to win.

I know OMERS is a silent partner here, but do you at least get good seats?
No, we don’t.

Leafs Nation or We the North?
Both. I also love the Argos and TFC. Sadly, we do not own the Toronto Rock. Lacrosse is the game I grew up playing. I’m in a Huntsville summer league with a lot of OMERS members. I’ve got their backs in terms of retirement, and they’ve got my back on the field.

Isn’t lacrosse pretty violent for a man your age? For a man of any age?
You won’t blow out your knee or get chronic injuries playing, but I have a lot of scars. It’s not a game to play if you’re worried about drawing a little blood. I love it with all my heart.

This interview has been edited for length and clarity.