Trends and Themes Article

Happy New Year! Like many of you, my family and I had a restful and quieter than usual holiday over the last week of 2020. It gave me a chance to reflect on the year that was and gain some perspective on the year ahead. In spite of COVID-19, OMERS Growth Equity was quite active over the year, working closely with our portfolio companies and adding four new companies to our direct holdings. While many of the themes that we are investing behind have been developed over the last decade, COVID-19 provided a strong tailwind for nearly all of our portfolio companies.

Our investment approach is driven by a long-held belief that in the future we will need to do more with less. Over the coming decades, population growth will continue to slow and there will be relatively fewer workers to support economic growth. As a result, we believe companies and people will become increasingly dependent on technology for efficiency and to boost their productivity. To invest in this theme, we are focusing on identifying the enabling technologies that will help facilitate this change, and the industries and companies we expect will benefit the most. We invest in companies and management teams that we believe can deliver decades of growth, supporting OMERS pension obligations to its members.

This past year, we invested in four new companies:

· Aledade is a US-based healthcare company that helps primary care physicians save costs by utilizing data and analytics. COVID-19 emphasized the need for doctors to take preventative action to keep patients out of hospitals.

· Skillshare is an online community that teaches creative skills through interactive on-demand courses. With a greater emphasis on online commerce comes a heightened need to learn new digital skills such as online marketing and design.

· Dialpad provides unified communications and contact center as-a-service. This enables businesses to transition all of their voice and video conferencing needs to the cloud and leverages artificial intelligence to deliver a number of unique products that help employees become more efficient, at a cheaper cost than traditional on-premises solutions. An increased emphasis on remote work accelerated a transition away from “on-prem” communications solutions.

· Mystery company — one more that we are waiting on the Company to announce before we do that we believe could become one of the larger companies in the software space. More on that later this month!

The disruptions caused by COVID-19 have delivered what amounts to a rapid acceleration of interest in the various solutions offered by these (and other) technology companies. We believe this acceleration is not a one-time event and will endure. Unlike our latest investment, there’s no mystery here — once you discover the benefits that adopting the latest technology provides, it’s tough to go back to paying more for a sub-optimal experience!

As we look ahead to 2021, the themes we have identified will continue to experience strong tailwinds for decades to come — whatever the year to come may bring. We look forward to sharing more about the companies we are investing in, and how they are helping to shape the future.