Ontario teachers pension fund gains $500 million by cashing in on GameStop stock rebellion

Wall Street's hedge funds are set to lose tens of billions of dollars after a mob of traders on Reddit's WallStreetBets page sent GameStop, AMC Entertainment, and other stocks skyrocketing in recent days. However, some Canadian entities are cashing in on what is being touted as the "biggest short squeeze in 25 years." Ontario Teachers' Pension Plan—the largest shareholder in U.S. mall owner Macerich Co.—reportedly sold its entire holding for nearly $500 million when the stock soared. According to data compiled by Bloomberg, the Teachers fund sold 24.56 million shares last Wednesday at an average price of $20.25 a share.

The fund is said to have owned 16.4% of Macerich, a real estate investment trust based in Santa Monica, California, which has been struggling for years. To make matters worse, it was immensely impacted by the Coronavirus pandemic that forced malls to shut down and pushed consumers toward e-commerce. The stock lost 84% of its value over a three-year period ending December 31, until shares more than doubled in the space of three weeks last month. According to HuffPost, this turn of events came to be after at-home traders on r/WallStreetBets began pumping it up as the "landlord" of retailers like GameStop and AMC Cinemas.

Macerich shares jumped 68% in four trading sessions and reached about $26 at one point on January 27, giving Ontario Teachers a way out. "We've been a long-term investor with Macerich and throughout this relationship, they have been a valued partner," Dan Madge, a spokesman for the Teachers fund, said in a written statement. "Moving forward, we are focused on scaling and diversifying our global real estate platform, and growing our existing Canadian real estate business." The fund's massive cash-in was this week followed by news that it has joined forces with IFM Investors to acquire Canadian district energy operations owned by Enwave Energy Corporation.

"Enwave is a fully integrated district energy business that provides innovative, sustainable district cooling and heating solutions to over 320 customers across a range of sectors in Canada. Spanning Toronto, London, Windsor, and Charlottetown, Enwave's distribution network is well diversified across services and customers. Enwave's focus on providing clean, low-carbon energy is well-aligned with the overall responsible investing practices and net-zero carbon emissions pledges made by both IFM Investors and Ontario Teachers,'" the organization said in a press release.

"Enwave is a prime example of an investment that we believe can be both commercially attractive and contribute to broader sustainability efforts. It provides district energy solutions to a high-quality portfolio of clients in Canada, helping them reduce greenhouse gas emissions and improve energy efficiency. We are also very excited about Enwave’s strong management team, stable inflation-linked cash flows, and high growth potential given the under-penetration of district energy in North America," Dale Burgess, senior managing director, Infrastructure & Natural Resources at Ontario Teachers, said in a statement.

"Enwave will be an attractive addition to our infrastructure portfolio. Its provision of essential district energy services providing investors with highly defensive, utility-like exposure coupled with leading sustainability attributes will help IFM Investors deliver on our purpose to protect and grow the long-term retirement savings of working people.  We are looking forward to working with Ontario Teachers' and continuing to grow Enwave’s footprint of sustainable district energy solutions throughout North America." said Kyle Mangini, Global Head of Infrastructure at IFM Investors.