The Ontario Municipal Employees Retirement System today reported an 8.7% rate of return in 2007, exceeding its benchmark of 5.6%.

“OMERS strong 2007 returns were due to the successful execution of our active management investment strategy, anchored by the strong returns realized by the three private market lines of business – real estate, infrastructure and private equity,” said John Sabo, chairman of the OMERS Administration Corporation Board of Directors, in a release.

In 2007, investments boosted the fund by about $1.4 billion. And over the last four years, they have added $4.2 billion.

Net assets grew to $51.5 billion in 2007, from $47.6 billion, thanks to a strong performance in real estate, infrastructure and private equity investments. “tempered by lower returns in the more volatile public market investments.”

Last year, OMERS increased the long-term asset mix target for private markets from 37.5% to 42.5% and decreased the target for public market investments from 62.5% to 57.5%.

And since 2003, OMERS has increased its exposure to private market investments from 17.8% to 29.8%, while reducing its exposure to public equities and interest-bearing investments from 82.2% to 70.2%.

The OMERS primary pension plan received $1.9 billion in pension contributions in 2007, compared with $1.8 billion in 2006. Pension and other benefit payments totalled $1.8 billion, an increase of $100 million.

OMERS provides pension services to more than 380,000 active and retired members and about 910 employers.