Key Takeaways
- • Ontario Teachers' Pension Plan will write down its entire $95 million FTX investment to zero, realizing a complete loss on capital deployed across two funding rounds in October 2021 and January 2022.
- • The pension fund, which manages CAD$221 billion ($165 billion) in total assets, stated the FTX loss will have "limited impact" given its size relative to total net assets, representing less than 0.05% of invested capital.
- • OTPP invested through Teachers' Venture Growth as part of a strategic diversification initiative targeting emerging fintech sector exposure, but the investment was made without access to comprehensive financial statements from FTX.
- • The pension plan has committed to strengthening its investment due diligence methodology following the loss, acknowledging disappointment with the outcome while emphasizing its strong overall financial position.
- • Ontario Teachers joins Sequoia Capital, BlackRock, SoftBank, and Temasek in marking FTX investments to zero following Sam Bankman-Fried's cryptocurrency exchange bankruptcy filing in November 2022.
Summary
Ontario Teachers' Pension Plan, one of the world's largest pension funds managing CAD$221 billion in assets, announced it will write down its $95 million investment in FTX to zero following the cryptocurrency exchange's bankruptcy proceedings. The loss represents a complete capital write-off barely one year after the pension plan made its initial investment in Sam Bankman-Fried's platform.
The Ontario Teachers investment was deployed across two separate funding rounds: an initial commitment in October 2021 via a Series B round, followed by additional capital in January 2022 through a Series C funding round. The capital was allocated through Teachers' Venture Growth, the pension plan's venture investment vehicle, as part of a broader strategy to gain exposure to emerging fintech sector opportunities and diversify its portfolio across asset classes, geographies, and time horizons.
Despite the magnitude of the loss in absolute terms, OTPP characterized the impact as immaterial to its overall financial position. The pension plan emphasized that the $95 million represents less than 0.05% of its total net assets, and stated the loss will have "limited impact" given its strong financial position. Nevertheless, the fund acknowledged it takes all losses seriously and expressed disappointment with the outcome of the investment.
A significant concern raised in available accounts centers on OTPP's investment methodology at the time: the pension plan reportedly made the $95 million commitment to an organization without access to comprehensive financial statements—a notable gap in standard institutional due diligence protocols. In response to this loss, Ontario Teachers stated it will strengthen and fortify its investment approach for future transactions to prevent similar outcomes.
Ontario Teachers' writedown follows similar actions by other major institutional investors caught in the FTX collapse. Sequoia Capital, the prominent Silicon Valley venture firm, wrote down $213.5 million in FTX-related investments to zero on November 9, 2022. Additional major institutions including BlackRock, SoftBank, and Singapore's Temasek also marked their FTX stakes to zero following the cryptocurrency exchange's November 2022 bankruptcy filing.
The Ontario Teachers investment was deployed across two separate funding rounds: an initial commitment in October 2021 via a Series B round, followed by additional capital in January 2022 through a Series C funding round. The capital was allocated through Teachers' Venture Growth, the pension plan's venture investment vehicle, as part of a broader strategy to gain exposure to emerging fintech sector opportunities and diversify its portfolio across asset classes, geographies, and time horizons.
Despite the magnitude of the loss in absolute terms, OTPP characterized the impact as immaterial to its overall financial position. The pension plan emphasized that the $95 million represents less than 0.05% of its total net assets, and stated the loss will have "limited impact" given its strong financial position. Nevertheless, the fund acknowledged it takes all losses seriously and expressed disappointment with the outcome of the investment.
A significant concern raised in available accounts centers on OTPP's investment methodology at the time: the pension plan reportedly made the $95 million commitment to an organization without access to comprehensive financial statements—a notable gap in standard institutional due diligence protocols. In response to this loss, Ontario Teachers stated it will strengthen and fortify its investment approach for future transactions to prevent similar outcomes.
Ontario Teachers' writedown follows similar actions by other major institutional investors caught in the FTX collapse. Sequoia Capital, the prominent Silicon Valley venture firm, wrote down $213.5 million in FTX-related investments to zero on November 9, 2022. Additional major institutions including BlackRock, SoftBank, and Singapore's Temasek also marked their FTX stakes to zero following the cryptocurrency exchange's November 2022 bankruptcy filing.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.