The Auto Toyo Optics MC 1:2.8 28mm is a celebrated wide-angle prime, designed for 35mm film SLR cameras during the 1970s and 80s.

Manufactured by Toyo Optics USA (TOU), this lens offers a 34.7-degree diagonal angle of view and a close focusing distance of 25cm.

Known for its solid construction and manual focus operation, it remains a popular choice for film photography enthusiasts today.

Historical Context: Toyo Optics USA

Toyo Optics USA (TOU) emerged as a significant player in the lens manufacturing landscape during the mid-20th century. While often overshadowed by larger Japanese brands, TOU carved a niche by producing high-quality lenses, frequently rebadged or supplied to other companies like Five Star.

The company focused on providing affordable alternatives, particularly appealing to enthusiasts seeking capable optics without the premium price tag. The Auto Toyo Optics MC 28mm exemplifies this approach, offering a robust and optically sound wide-angle solution for the popular 35mm film format during its golden age.

TOU’s legacy lies in its contribution to accessible photography.

The Rise of Wide-Angle Prime Lenses in the 1970s-80s

The 1970s and 80s witnessed a surge in the popularity of wide-angle prime lenses, driven by evolving photographic styles. Street photography and landscape work benefited immensely from the immersive perspectives these lenses offered. The Auto Toyo Optics MC 28mm entered this market, providing photographers with a compact and capable tool.

These primes encouraged deliberate composition and a more intimate connection with the subject. Unlike zoom lenses, they demanded a thoughtful approach. The 28mm focal length became a favorite for its versatility, balancing wide views with manageable distortion.

Technical Specifications

The Auto Toyo Optics MC 28mm f/2.8 boasts a 28mm focal length, a maximum aperture of f/2.8, and a 34.7-degree viewing angle.

It features a 25cm minimum focus and robust, all-metal construction.

Focal Length and Aperture

The Auto Toyo Optics MC 28mm lens centers around a classic 28mm focal length, making it ideal for a diverse range of photographic scenarios. This wide-angle perspective captures expansive scenes while maintaining manageable distortion.

Its maximum aperture of f/2.8 provides a good balance between light gathering capability and depth of field control.

This allows for shooting in lower light conditions and achieving pleasing background blur, enhancing subject isolation. The combination of focal length and aperture delivers versatile performance for both casual and serious photographers.

Lens Mount Compatibility: Konica AR and Pentax PK

The Auto Toyo Optics MC 28mm was originally designed with compatibility for both Konica AR and Pentax PK camera systems. This dual mount capability broadened its appeal to photographers using either of these popular film SLR platforms.

Specifically, the lens functions seamlessly with all Konica AR mount cameras, offering a direct and reliable connection.

Similarly, it’s fully compatible with Pentax PK mount bodies, providing a robust and functional pairing for Pentax users.

Diagonal Angle of View: 34.7 Degrees

The Auto Toyo Optics MC 28mm boasts a diagonal angle of view measuring 34.7 degrees. This wide-angle perspective is crucial for capturing expansive scenes and creating a sense of depth within photographs.

This angle is particularly well-suited for landscapes, architecture, and street photography, allowing photographers to include more of the environment in their compositions.

The 34.7-degree field of view offers a balance between width and natural perspective.

Minimum Focusing Distance: 25cm (Close Focus)

The Auto Toyo Optics MC 28mm lens features a minimum focusing distance of 25cm, enabling close-up photography while still maintaining a wide-angle perspective. This capability expands creative possibilities beyond traditional landscape or architectural shots.

Photographers can utilize this close focus to emphasize foreground elements or create unique compositions with interesting perspectives.

The 25cm distance allows for detailed shots, adding versatility to this classic lens.

Build Quality and Design

The Auto Toyo Optics MC 28mm boasts a solid metal construction, ensuring durability and a premium feel. Its design prioritizes robust build quality and manual operation.

Solid Metal Construction

The Auto Toyo Optics MC 28mm distinguishes itself through its remarkably durable solid metal construction. This isn’t merely aesthetic; the all-metal build contributes significantly to the lens’s longevity and tactile experience.

Unlike many contemporary lenses utilizing plastic components, this lens feels substantial and well-engineered. This robust design not only withstands the rigors of use but also provides a reassuring sense of quality.

The metal barrel and focusing ring offer a smooth, precise operation, indicative of the craftsmanship employed during its production. This solid build is a key factor in its continued appeal to collectors and users alike.

Manual Focus Operation

The Auto Toyo Optics MC 28mm features a purely manual focus operation, a characteristic common to lenses of its era. This necessitates direct, hands-on control over focusing, demanding a deliberate and engaged approach to photography.

Photographers utilizing this lens must rely on their skill and the camera’s focusing aids – typically a split-image or microprism collar – to achieve sharp results.

While lacking the convenience of autofocus, this manual system fosters a deeper connection between photographer and image, encouraging careful composition and precise focusing techniques.

Physical Dimensions and Weight

The Auto Toyo Optics MC 28mm boasts a compact and manageable form factor, typical of lenses designed for 35mm film cameras. Its overall size is approximately 55mm in length.

Constructed with solid metal, the lens feels substantial in hand, contributing to its durable build quality. While specific weight figures vary slightly, it generally weighs around 200-250 grams.

This relatively lightweight design makes it a comfortable companion for extended shooting sessions, whether on a street photography walk or a landscape expedition.

Optical Performance

The Auto Toyo Optics MC 28mm delivers sharp images with good resolution, benefiting from its multi-coated (MC) optics.

Users report satisfactory performance, though chromatic aberration and vignetting are present, typical for lenses of this era.

Multi-Coated (MC) Optics

The “MC” designation in the Auto Toyo Optics MC 28mm signifies the presence of multi-coating on the lens elements. This crucial feature reduces internal reflections, significantly enhancing light transmission and contrast.

Multi-coating minimizes flare and ghosting, resulting in clearer, more vibrant images, particularly in challenging lighting conditions.

While not as advanced as modern coatings, the multi-layer coating on this lens was a notable improvement for its time, contributing to its overall optical quality and image sharpness.

It helped to deliver pleasing results on both color and black and white film.

Image Sharpness and Resolution

The Auto Toyo Optics MC 28mm generally delivers good sharpness across the frame, especially when stopped down to f/5.6 or f/8. Center sharpness is notably strong, providing detailed images.

Resolution is considered quite respectable for a lens of its era, capable of resolving fine details on high-quality film.

Photographers often praise its “strong construct satisfactory” performance, noting that it produces pleasingly sharp images with good clarity, even wide open at f/2.8.

Edge sharpness can be slightly softer.

Chromatic Aberration and Distortion

The Auto Toyo Optics MC 28mm exhibits relatively well-controlled chromatic aberration for a lens of its age, meaning color fringing is generally minimal, even in high-contrast scenes.

Distortion is present, as expected with a wide-angle lens, but it’s mostly of the barrel distortion variety – lines bowing outwards.

This distortion is typically not severe and can be easily corrected in post-processing if desired.

Overall, these optical aberrations are manageable and don’t significantly detract from image quality.

Vignetting Characteristics

The Auto Toyo Optics MC 28mm displays noticeable vignetting, particularly at its widest aperture of f/2.8. This manifests as darkened corners in images, a common trait for lenses of this focal length and era.

Stopping down the aperture to f/4 or f/5.6 significantly reduces the vignetting effect, resulting in more even illumination across the frame.

Some photographers even appreciate the subtle vignetting as a stylistic element, adding a vintage feel to their images.

It’s a characteristic, not necessarily a flaw.

Using the Auto Toyo Optics MC 28mm

This 28mm lens excels in street photography and landscapes, offering a unique perspective. Its manual focus requires practice, but delivers rewarding results.

It’s a versatile tool for creative image-making.

Ideal Photographic Applications

The Auto Toyo 28mm’s wide-angle perspective makes it exceptionally suited for capturing expansive scenes. Street photography benefits from its ability to include context and draw viewers into the environment.

Landscape photographers will appreciate the broad field of view, ideal for showcasing grand vistas. While less conventional, the lens can also be employed for portraiture, creating unique compositions with environmental storytelling.

Its manual focus encourages deliberate composition, fostering a more thoughtful approach to image creation, making it a versatile choice for diverse photographic pursuits.

Street Photography with a 28mm Lens

The Auto Toyo 28mm excels in street photography due to its ability to capture a wider scene, immersing the viewer in the environment. This focal length allows photographers to include compelling foreground elements and contextual details, enhancing narrative power.

Its compact size and manual focus promote discreet operation, crucial for candid shots. The lens encourages a more engaged approach, requiring deliberate framing and focusing, resulting in impactful and authentic street scenes.

The 28mm perspective offers a unique blend of intimacy and breadth, perfect for storytelling.

Landscape Photography Considerations

The Auto Toyo 28mm presents unique challenges and opportunities for landscape photography. While not a traditional landscape focal length, its wider perspective can emphasize foreground interest and create a sense of spaciousness.

Careful composition is key, as the lens can exaggerate perspective. Utilizing strong leading lines and incorporating a prominent foreground element will enhance depth.

The manual focus encourages deliberate framing, and the solid build is suitable for outdoor conditions, yielding compelling landscape images.

Portraiture with a Wide-Angle Lens

The Auto Toyo 28mm isn’t a conventional portrait lens, but creative photographers can achieve striking results. Its wide angle necessitates close proximity to the subject, creating a unique intimacy and emphasizing the surrounding environment.

Be mindful of potential distortion, particularly near the edges of the frame. Careful posing and focusing on the eyes are crucial.

This lens excels at environmental portraits, showcasing the subject within their context, offering a distinctive aesthetic.

Mounting and Adapting the Lens

The Auto Toyo 28mm natively mounts to Konica AR and Pentax PK cameras. Adapters enable use on modern digital bodies, expanding its versatility and photographic applications.

Konica AR Mount Cameras

The Auto Toyo Optics MC 28mm is directly compatible with all Konica AR mount cameras, offering a seamless integration for classic film photography. This includes popular models like the Konica Autoreflex, Konica FS-1, and Konica T3.

Users report a secure and reliable connection, allowing for full manual control over aperture and focus. The lens’s robust build quality ensures a stable mount on these vintage Konica bodies.

When using with Konica AR cameras, photographers can fully utilize the lens’s optical capabilities and enjoy the unique character of this classic wide-angle prime.

Pentax PK Mount Cameras

The Auto Toyo Optics MC 28mm also boasts compatibility with Pentax PK mount cameras, expanding its usability to a wider range of classic film SLRs. This includes models like the Pentax K1000, Pentax ME, and Pentax P30n.

While designed initially for Konica AR, its adaptability to Pentax PK offers enthusiasts more options. Users confirm a solid connection and full manual operation on these cameras.

Photographers appreciate the lens’s performance when paired with Pentax bodies, delivering sharp images and a classic aesthetic.

Adapting to Modern Digital Cameras

The Auto Toyo Optics MC 28mm, despite its vintage, can be adapted for use on modern digital cameras via readily available adapters. These adapters, often featuring a PK to mirrorless mount, allow photographers to enjoy the lens’s unique character on contemporary systems.

Successful adaptation requires careful selection of a compatible adapter, ensuring proper fit and functionality. Users report excellent results with adapters on Sony E-mount and Fujifilm X-mount bodies.

However, remember that manual focus and aperture control are essential when using this lens digitally.

Condition and Collectibility

The Auto Toyo Optics MC 28mm’s value depends heavily on its condition; serial number 800089 is noted. Good condition examples are desirable among collectors and film users.

Assess for haze, scratches, and smooth focus operation.

Assessing the Condition of a Used Lens

Evaluating an Auto Toyo Optics MC 28mm requires careful inspection. Begin by checking the glass elements for scratches, haze, fungus, or separation. Rotate the aperture blades to ensure smooth operation without oil.

Examine the focus ring for smoothness and any play. The metal body should be free of significant dents or corrosion.

Confirm the Konica AR or Pentax PK mount is undamaged. A “strong construct satisfactory” condition is highly valued, indicating minimal wear and optimal performance.

Identifying Key Serial Numbers (e.g., 800089)

The serial number on the Auto Toyo Optics MC 28mm, such as 800089, is typically engraved on the lens barrel. This number can assist in determining the approximate production date, though precise records are scarce.

While not directly linked to specific features, tracking serial numbers helps collectors and enthusiasts document lens variations.

eBay listings frequently include the serial number for identification purposes, aiding in verifying authenticity and assessing the lens’s history.

Market Value and Rarity

The Auto Toyo Optics MC 28mm isn’t exceedingly rare, but prices fluctuate based on condition and included accessories. Expect to find examples ranging from $50 to $150 on platforms like eBay.

Excellent condition lenses with original packaging command higher prices. The Konica AR mount versions may be slightly more valuable due to the decreasing availability of Konica cameras.

Overall, it represents a relatively affordable entry point into vintage wide-angle photography.

User Reviews and Experiences

User satisfaction with the Auto Toyo Optics MC 28mm is generally high, praising its robust build and satisfactory image quality for film photography.

Photographers consistently highlight the lens’s strong construction and performance.

General User Satisfaction

Overall, user satisfaction with the Auto Toyo Optics MC 28mm lens is remarkably positive, particularly among film photography enthusiasts. Many reviewers commend its solid, all-metal construction, noting a reassuringly robust feel.

The lens consistently receives praise for delivering sharp images, especially when stopped down slightly. Users appreciate its ability to produce pleasing results for street photography and landscapes. While a manual focus lens, it’s considered easy to operate and offers a tactile experience.

Despite its age, the Auto Toyo Optics MC 28mm continues to garner favorable feedback, proving its enduring appeal.

Reported Strengths of the Lens

Key strengths consistently highlighted by users of the Auto Toyo Optics MC 28mm include its robust build quality, featuring a solid metal construction that inspires confidence. The lens delivers commendable sharpness and resolution, particularly at smaller apertures.

Photographers appreciate the 25cm close focusing distance, enabling creative compositions. Its compact size and lightweight design contribute to comfortable handling. The multi-coated optics effectively minimize flare and ghosting, enhancing image clarity.

Many users also value its affordability and availability on the used market.

Potential Weaknesses and Limitations

Despite its strengths, the Auto Toyo Optics MC 28mm does exhibit some limitations. Users report noticeable vignetting, especially at wider apertures, requiring post-processing correction. Chromatic aberration can be present, particularly in high-contrast scenes, though generally manageable.

Being a manual focus lens, precise focusing demands practice and patience. The lack of autofocus may deter some modern photographers. While build quality is solid, older units may show signs of wear.

Finally, adapting to digital cameras requires compatible adapters.

Comparison with Contemporary Lenses

Compared to other 28mm primes of the era, the Auto Toyo Optics MC 1:2.8 28mm offers a compelling value proposition, balancing image quality with affordability.

It stands as a strong contender in today’s market.

Comparing to Other 28mm Primes of the Era

The Auto Toyo Optics MC 28mm competed with notable 28mm lenses from manufacturers like Olympus and Pentax during the 1970s and 80s. While some contemporaries boasted faster apertures or more advanced coatings, the Toyo offered a robust build and respectable sharpness.

Many users found its image rendering pleasing, with a character distinct from the clinical precision of some German lenses.

Its multi-coating, while not the most modern, provided adequate flare control for the period, and its manual focus operation appealed to photographers seeking direct control over their images.

Value Proposition in Today’s Market

The Auto Toyo Optics MC 28mm presents a compelling value for photographers exploring film or adapting vintage lenses to digital systems. Its affordability, often found on eBay, makes it an accessible entry point into classic lens experiences.

Despite its age, the lens delivers satisfying image quality, particularly for street and landscape photography.

The robust metal construction ensures durability, and its manual focus encourages deliberate shooting. It’s a cost-effective alternative to pricier modern lenses.

Maintenance and Care

Regular cleaning of the lens elements with appropriate solutions is crucial. Proper storage in a dry environment protects against fungus and ensures longevity for this classic lens.

Cleaning the Lens Elements

Maintaining the optical clarity of the Auto Toyo Optics MC 28mm requires gentle cleaning practices. Begin by using a blower to remove loose dust and debris from the lens surface.

Follow this with a soft, lint-free microfiber cloth lightly moistened with a lens cleaning solution specifically designed for coated optics.

Avoid harsh chemicals or abrasive materials, as these can damage the multi-coating.

Circular motions are best, working from the center outwards. For stubborn marks, consider a dedicated lens cleaning pen, but use it sparingly.

Regular preventative cleaning is key to preserving image quality.

Proper Storage Techniques

Protecting your Auto Toyo Optics MC 28mm from environmental factors is crucial for longevity. Store the lens in a cool, dry place, away from direct sunlight and extreme temperatures.

A dedicated lens case or pouch is highly recommended to shield it from dust, moisture, and accidental impacts.

Silica gel desiccant packs within the case can absorb excess humidity, preventing fungus growth.

When not in use for extended periods, loosen the focus ring slightly to avoid potential sticking.

Avoid long-term storage in leather cases, as they can release harmful chemicals.

Resources and Further Information

Explore online lens databases like the Pentax Lens Review Database for specifications and reviews. eBay listings offer purchase options, while photography forums provide user experiences and insights.

Online Lens Databases (e.g., Pentax Lens Review Database)

Dedicated online resources, such as the Pentax Lens Review Database, provide valuable technical specifications and user-submitted reviews specifically for the Auto Toyo Optics MC 28mm f/2.8. These databases often detail the lens’s close focus capability of 25cm and its solid metal construction.

Researchers and enthusiasts can find detailed information regarding the lens’s performance characteristics, including reported strengths and potential limitations. These platforms serve as central hubs for collective knowledge, aiding in assessing the lens’s condition and market value.

Accessing these databases is crucial for understanding the lens’s historical context and its place within the broader landscape of vintage optics.

eBay Listings and Auction Sites

eBay and similar auction platforms are primary sources for locating Auto Toyo Optics MC 28mm f/2.8 lenses. Listings frequently highlight compatibility with Konica AR and Pentax PK mount cameras, often noting the serial number, such as 800089.

Potential buyers can assess the lens’s condition through provided photographs and descriptions, paying attention to reported functionality and cosmetic wear. These sites offer a dynamic marketplace, reflecting current market values and rarity.

Careful examination of listings is essential for verifying authenticity and ensuring a satisfactory purchase.

Photography Forums and Communities

Online photography forums, like the Pentax Lens Review Database and Board is Very Busy, provide valuable insights into the Auto Toyo Optics MC 28mm. Users share experiences, reviews, and discuss the lens’s strengths – notably its solid construction and satisfactory performance.

These communities are excellent resources for troubleshooting, learning about adaptations to modern cameras, and gauging overall user satisfaction. Discussions often cover ideal applications, such as street and landscape photography.

Engaging with these forums offers a wealth of practical knowledge.

MTF Charts and Analysis

MTF data specifically for the Auto Toyo Optics MC 28mm is limited, however, understanding MTF charts helps assess sharpness and optical performance characteristics.

Analyzing available data reveals potential strengths and weaknesses.

Understanding MTF Charts

MTF (Modulation Transfer Technology) charts graphically represent a lens’s ability to resolve fine details across the image frame. Higher percentages indicate better sharpness. Charts display resolution at varying spatial frequencies, mimicking different detail levels.

Sagittal and Meridional lines show performance in two planes. MTF50, a common metric, indicates the spatial frequency at which contrast drops to 50%. Analyzing these charts for the Auto Toyo Optics MC 28mm, even with limited data, can provide insights into its resolving power and potential softness at certain apertures or image corners.

Available MTF Data for the Auto Toyo Optics MC 28mm

Comprehensive MTF data for the Auto Toyo Optics MC 28mm is surprisingly scarce. Unlike modern lenses, detailed manufacturer specifications weren’t widely published. Pentax Lens Review Database offers user-submitted observations, suggesting good center sharpness even wide open.

However, formal MTF charts are largely absent. Users often rely on real-world testing and sample images to assess performance. While lacking precise figures, anecdotal evidence points to a lens capable of delivering pleasingly sharp results, particularly when stopped down slightly from its maximum aperture of f/2.8.

Legacy and Influence

The Auto Toyo Optics MC 28mm, though from a smaller manufacturer, contributed to the era’s lens design. It continues to be favored by film photographers today, demonstrating lasting quality.

The Impact of Toyo Optics on Lens Design

Toyo Optics, while not as widely recognized as some contemporaries, played a significant role in the landscape of 1970s and 80s lens manufacturing. The Auto Toyo Optics MC 28mm exemplifies their commitment to producing high-quality optics at a competitive price point.

Their designs often prioritized robust build quality and sharp image rendition, characteristics appreciated by photographers then and now. Though information is limited, the lens demonstrates a focus on delivering practical performance, influencing subsequent lens development by showcasing attainable quality for enthusiasts.

The lens’s enduring appeal speaks to the effectiveness of their optical formulas and manufacturing processes.

Continued Use in Film Photography

The Auto Toyo Optics MC 28mm maintains a dedicated following within the film photography community. Its manual focus operation and solid metal construction appeal to photographers seeking a tactile and deliberate shooting experience.

The lens’s optical qualities, delivering sharpness and reasonable distortion control, make it well-suited for various film formats. Enthusiasts appreciate its affordability and availability on the used market, offering a vintage aesthetic and reliable performance.

It remains a practical and enjoyable lens for those committed to analog photography.

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This year, large majorities in both houses of Virginia’s General Assembly passed landmark legislation to extend equal collective bargaining rights to most public-sector workers. The Assembly’s collective bargaining bill proposed replacing Virginia’s Jim Crow-era ban on public employee collective bargaining with a new law affirming public-sector workers’ rights and creating a legal pathway to a union contract for those who choose to unionize. The Assembly bill was poised to put Virginia on a transformative path to narrowing one of the largest public-sector pay gaps in the nation and improving public education and services for all Virginians by reducing crisis-level shortages of educators, first responders, health care workers, corrections staff, and other frontline workers. Strengthening collective bargaining rights is also one of the most powerful policy levers states have available to confront primary economic challenges affecting all workers today: an affordability crisis driven by the failure of wages to keep pace with inflation, growing income inequality, and persistent racial and gender labor market disparities.

Once the Assembly’s bill reached her desk, Virginia Governor Abigail Spanberger had the opportunity to strengthen it or sign it into law. Instead, Governor Spanberger put forward her own heavily amended version of the bill last week, weakening the proposed collective bargaining framework so extensively that her version would lock Virginia into an unstable, ineffective system in which collective bargaining would remain merely “optional” and where employers and workers would remain perpetually uncertain about what rules might apply to them from year to year depending on what appointees of future governors might decide. The governor’s amended bill will now be considered by the Assembly in its one-day veto session this week. Below, we analyze some of the many substantive differences between the Assembly bill and the governor’s bill, as well as the likely economic impacts.

Virginia’s ability to reap economic benefits of collective bargaining will depend on strength of any new law 

EPI has previously analyzed the economic importance of strengthening collective bargaining rights in Virginia, where the state’s long-standing ban on public-sector collective bargaining has suppressed workers’ wages and union membership. Our most recent analysis showed that state and local government employees in Virginia earn, on average, 26.7% less than private-sector peers with similar education and experience. Virginia’s public-sector pay gap is the second highest in the nation while its public-sector unionization rate (at 14.1%) is the fourth lowest, outcomes that our 50-state data show are closely correlated with the strength or weakness of a state’s collective bargaining laws. Recent EPI research further shows that beyond helping states narrow public-sector pay gaps and improve conditions for directly affected workers and the public they serve, stronger collective bargaining laws are highly correlated with widely shared benefits including higher wages, more equitable state economies, and healthier democracies.

State public-sector collective bargaining laws are complex and highly variable. In our prior research, we grouped state laws into three categories based on assessment of whether collective bargaining is:

1) illegal: state law prohibits public employers and unionized workers from entering into collective bargaining agreements.

2) permitted: collective bargaining is “optional” insofar as it is allowed in certain jurisdictions but occurs only if both parties agree to engage in it; whether parties are required to negotiate over wages or other terms and conditions of work is not defined in state law.

3) required: once a group of workers has gone through the process of forming a legally certified union, employers have a “duty to bargain” over pay (at a minimum), and there is a specified process for both parties to follow in negotiating to reach agreements that result in a legally binding collective bargaining agreement.

Currently, Virginia’s collective bargaining law straddles the first two categories: collective bargaining is illegal for units of state government in Virginia, but the state has recently (since 2021) permitted local governments to enact their own collective bargaining systems.

As shown in Table 1, data show that average public-sector pay gaps vary across states depending on the strength of their collective bargaining laws. Virginia’s large public-sector pay gap is an extreme outlier, currently exceeding even the average among all states with the weakest laws (where collective bargaining is illegal).

Table 1 Governor’s bill deletes essential elements of a strong collective bargaining system

Virginia lawmakers now face a choice between two dramatically different visions for collective bargaining: an Assembly bill that would move Virginia into the stronger “required” category, and the governor’s substitute bill that would lock Virginia into the weaker “permitted” category.

The Assembly’s collective bargaining bill includes clear language recognizing the rights of public employees to choose whether to unionize; setting forth consistent rules, timelines, and processes for workers and employers to follow for union elections and contract negotiations; and establishing a new, independent state labor board to support and administer the new framework across all covered state and local jurisdictions. The Assembly bill also has limitations—for example, it falls short of equalizing rights of all public employees by excluding most higher education workers—but it does provide a clear, strong roadmap for implementing a robust, effective collective bargaining system modeled on proven best practices from other states to serve as a solid foundation for Virginia to build on.

The governor’s amended version of the bill weakens all these key elements of the statutory framework proposed by the Assembly and the proposed labor board’s role in enforcing a clear statutory framework. In many important sections of the bill, the governor’s amendments include changing the word “shall” to the word “may”—a critical change that converts entire sections of statutory rules and requirements into mere suggestions, rather than legally enforceable expectations applying equally to all workers and employers. Another repeated pattern throughout the governor’s bill is the deletion and replacement of a host of detailed statutory guidelines with directives that such guidelines should instead by “determined by the board” or that the board “shall adopt regulations” to answer critical questions about workers’ rights and employer obligations in the unionization and collective bargaining process.

Table 2 summarizes just a few of the key differences between the Assembly bill and the governor’s bill. The Assembly bill proposes a framework similar to those successfully implemented in many other states, including statutory language defining the topics parties are required to negotiate over, clear rules for union elections and negotiations procedures, and binding arbitration to ensure that negotiations will eventually conclude with a contract settlement. These standard elements are essential to a strong, effective collective bargaining system that enables workers to have an equal voice at the bargaining table—but the governor’s bill removes all of these elements.

Table 2

The stark contrast between the scope of bargaining as defined in the Assembly bill versus the governor’s bill is especially salient. The strength of any collective bargaining system depends on clear, consistent rules for which topics unions and employers must be willing to discuss in negotiations and which subjects must (or may) legally be incorporated into a collective bargaining agreement. When subjects of bargaining are “permitted” but not required, parties may try to pick and choose what to discuss, one party may refuse to negotiate over matters that are important to the other, and non-mandatory topics are generally not considered as part of arbitration procedures and often therefore never get included in final contracts. Alarmingly, the governor’s bill leaves the scope of bargaining completely undetermined, giving the labor board discretion to determine when and whether it is “appropriate” to require parties to negotiate even over topics as basic as wages.

This change alone would lead us to categorize the governor’s bill as a model for “permitting” (but not requiring) collective bargaining, making it unlikely to significantly narrow Virginia’s public-sector pay gap or achieve other important economic outcomes associated with stronger collective bargaining laws. As shown above in Table 1, workers in states where collective bargaining is “permitted” but not required continue to experience pay gaps far above average (and far greater than in most states with strong collective bargaining laws).

At a minimum, any collective bargaining legislation in Virginia should be measured against the status quo and whether it represents progress toward achieving full and equal collective bargaining for all workers. Here, the governor’s bill falls woefully short and could even represent a step backwards for some workers. At best, the governor’s bill would lock Virginia into a system where collective bargaining becomes “permitted” for more workers than are currently covered by local collective bargaining ordinances. At worst—depending on rules yet to be determined by a future labor board—the governor’s bill could erode existing rights of some local government workers who might find themselves in the future governed by weaker state collective bargaining procedures than those they’ve been able to win at the local level since 2021.

The governor’s bill includes additional significant changes too numerous to cover in detail here. Among other notable amendments that weaken the proposed framework for collective bargaining or its implementation, the governor’s bill:

• delays application of the new law to January 1, 2030, for local governments
• excludes Virginia Port Authority workers from coverage
• maintains exclusion of most higher education workers from coverage (including faculty, professional staff, researchers, graduate assistants, etc.) and specifies that this exclusion extends to health care workers at university hospitals and health care facilities

In the short term, the numerous exclusions, delays, and weaknesses introduced or expanded by the governor’s bill would leave Virginia workers with a limited patchwork of different rights covering different localities and occupations. In the long term, this would create permanent uncertainty about whether and when various rules covering particular groups of workers might be changed by the labor board.

It’s clear that the fight to ensure every employee in Virginia has a voice on the job has only just begun. Collective bargaining is a fundamental right, not intended to be left up to the whims of individual local elected officials or to-be-determined future members of a new state labor board. Collective bargaining is both a labor issue and a civil rights issue, as NAACP Virginia State Conference leaders recently pointed out. Nowhere is this clearer than in Virginia, where the denial of collective bargaining rights to generations of workers is directly rooted in a history of white supremacist backlash against Black worker organizing. Virginia lawmakers still have a chance to enact meaningful collective bargaining legislation in 2026, but doing so will first require rejecting the damaging amendments put forward by Governor Spanberger.

Voucher programs—which use public funds to finance private education—have been sweeping state and federal legislatures over the past few years. These bills are harmful to public schools, especially public schools in rural communities. Yet, this week, the “Keep Public Funds in Public Schools Act” was introduced in the Senate, which would repeal the national private school voucher program passed in the 2025 reconciliation bill, thereby protecting rural communities from these programs. Often framed as “school choice” programs, vouchers give parents the equivalent of per-pupil public school funding to send their child to any private or homeschool program they choose.

But diverting public funds away from public K–12 schools and toward private schools does not guarantee educational opportunities will be expanded for all students—and this is especially true in rural communities. Most obviously, because students in rural communities often don’t have a private school option and therefore cannot use the vouchers, state voucher programs—which are financed by all the taxpayers in a state—amount to an education subsidy for wealthy urban families at the expense of strong public schools. Moreover, for rural areas that can support multiple school systems, voucher programs introduce a potentially large cost for the students that remain in public schools, as any sharp drop in public school enrollment will raise the fixed cost per pupil of running schools. For example, school facilities and staff that are efficient for 1,000 students in a school may no longer be efficient if enrollment were to drop to 800 or 900.

Voucher programs work like this: Parents who wish to send their kid to private school can receive public funding to cover part of the tuition or education-related expenses, rather than paying out of pocket. In states with vouchers programs, this added cost to government of paying for private educational expenses makes a big dent in state budgets—see examples here, here, and here. These programs also often entail fraud and abuse of funds and strip away funding for public schools. As a share of K–12 budgets, voucher spending accounted for as much as 26% in 2025, squeezing public schools of sorely needed funds. Moreover, recent reports have documented accounts of voucher funding getting used for high-end concert tickets and rideshare apps like Uber and Lyft. For wealthy parents in urban districts who were already planning to send their kids to private school, these slippery regulations and extra funding for education expenses are a feature, not a bug, of voucher programs. Vouchers are disproportionately taken up by students already attending private school, compared with those who consider a private school option when voucher laws get passed in their state.

For students in rural areas with no private school option, voucher programs simply mean there is less to spend on public schools, which leads to teacher shortages, fewer educational opportunities, and worse building maintenance. In rural communities with homeschooling or private school options, voucher programs impose an added cost to public education when students transition from public to private school.

We call this cost the fiscal externality of voucher programs, and it is borne by school districts, students, and their families when voucher-driven declines in student enrollment intersect with the fixed nature of many school costs. In rural districts, many key education costs—such as interest on bonds issued in the past, heating, electricity for school buildings, bus drivers, and even some staff—cannot easily adjust to student enrollment declines.

While public schools’ fixed costs do not decline when they lose students to voucher programs, their revenue does. Thus, when students in rural areas take up vouchers to leave public school for private school or homeschool, public schools have less revenue to cover the same level of fixed costs. The costs that can be adjusted—such as supplies or certain personnel—will get forced down due to shrinking school budgets. These variable costs are crucial for effectively educating children, meaning students who remain in public schools will pay the price of voucher program takeup.

This fiscal externality therefore leaves districts unable to deliver the same level of instruction to the remaining public school pupils. When students leave public schools in rural areas with voucher programs, there are fewer resources available on a daily basis to educate kids—fewer teachers and other staff members and fewer curriculum and education supplies. Education quality suffers.

How large is the fiscal externality that voucher programs impose on public schools in rural districts? Take the McComb Local School District in Ohio, which had 627 students in 2022 and is classified as a rural district according to the U.S. Census. Using EPI’s Fiscal Externality Calculator, we estimate that a 5% decline in enrollment would lead to an increased cost of $520 per pupil for the remaining students in the district, or a total of $309,530.

The key assumption is that there is some fraction of schools’ costs that is fixed and can’t be adjusted in the near term when enrollment falls. We assume that instruction and services costs (the cost of teachers and services like transportation, counseling, nurses, and school administrators) can only partially adjust to changes in enrollment. Specifically, we assume that when enrollment declines, instruction costs are only able to adjust by 50% of the enrollment decline, and service costs are only able to adjust by 20%. We assume that capital and building and maintenance costs can’t be adjusted at all. (Users can set their own adjustment rates for their school districts using the fiscal externality calculator here. The method behind this calculation is detailed in our report.)

Under these assumptions, aggregating all the rural Ohio districts using the rural categorization of school districts from the National Center for Education Statistics, a voucher-driven 5% enrollment decline would impose a fiscal externality of just over $206 million on Ohio public schools.

Rural districts have the most to lose when states enact voucher programs. For rural communities, vouchers are not a cost-free policy that simply expands education options for children—they are a subsidy for wealthy urban and suburban families at the expense of strong public schools. Voucher programs also introduce a large potential cost for the students that remain in rural public schools. The public spending declines associated with the introduction of vouchers will reliably cause significantly worse educational outcomes at a time when states should be spending more—not less—on public schools. States that promote voucher programs at the expense of funding for strong public education are signaling that rural students are not a priority. 

Key takeaways:

• Recent Democratic proposals to exempt broad swaths of the middle class from federal income taxes accept a damaging frame of taxes as a pure drain on affordability.
• But taxes aren’t a drain on affordability; they fund the public services and social insurance programs that make a decent life possible for middle-class families.
• Progressive taxes on the ultrarich and corporations are essential and should be the immediate priority, but they cannot sustain the public sector alone, let alone expand it in ways needed.
• Middle-class tax rates have fallen by a third since 1979, yet economic anxiety remains high. Tax-cutting has failed because it has left the private-sector drivers of inequality untouched and starved public services.

For decades, anti-tax politicians have tried to smuggle in large tax cuts for the ultrarich and corporations by loudly offering tax cut crumbs to the middle class. Key to this effort has been framing taxes as a pure drain on typical families’ ability to afford a secure economic life. Any success in this dishonest campaign to foster anti-tax sentiment is a disaster for working people—and that’s why some recent tax policy ideas from Democrats and the rhetoric around them are so deflating.

Two things are true about taxes in the United States. First, taxes on the richest families and corporations are far too low. Second, it is broad-based taxes on the middle-class that are the foundation of a functioning public sector and a decent society.

Progressive taxes on the ultrarich and corporations are mostly needed to reduce the potential gains to the rich and powerful from rigging the rules of markets. When the powerful rig these rules and hugely disproportionate shares of income concentrate at the top—like in the United States today—progressive taxes can also raise significant revenue.

But if sharply progressive taxes succeed in reducing the incentive for rigging the rules of markets and if other policies help lead to more broadly shared income growth in the country, this means that progressive taxes will raise a lot less revenue over time.

To be clear, this would be a victory for a better society. For example, the purpose of a carbon tax is to lower greenhouse gas emissions and if it’s highly successful, it will by definition stop raising much revenue. Progressive taxes aimed at reducing inequality will see the revenue they raise start to decline when they are their most successful. Right now, we do have deep inequality in the U.S. and progressive taxes will raise a lot of money—but we shouldn’t make the public sector’s resources dependent on this remaining true forever.

But more importantly, taxing only the very rich has never been the primary foundation of public-sector resources and can’t be going forward. The revenue needed to support programs that provide social insurance and income support (Social Security and Medicaid, for example), as well as public investment and services like highways, transit, and public education requires broad-based taxation. Without Social Security providing secure retirement, Medicare, Medicaid, and the Affordable Care Act providing access to health care, and public schools providing universal education, a decent life for the middle-class would be entirely unaffordable. And without middle-class taxes supporting all of these things, they would collapse.

If typical Americans lose faith that paying broad-based taxes to support public services and investments is a good deal, it will be a disaster for their ability to afford a decent life. Sadly, some recent Democratic proposals capitulate to this view of taxes as a “pure burden” rather than an investment in the country and its people.

Senators Chris Van Hollen (D-MD) and Cory Booker (D-NJ) have both floated ideas that would draw a line below which nobody would pay any federal income tax (Van Hollen’s line is $92,000 for a married couple while Booker’s is $75,000). Both proposals pay for this with tax increases on the rich. If these tax increases on the rich were standalone pieces of legislation, they’d be excellent. But they are instead paired with tax benefits that mostly miss the bottom of the income distribution. In Booker’s proposal, the gains from the higher standard deduction that zeroes out taxes for many are actually largest for families between the 60th and 80th percentiles, and gains persist on average through the 99th percentile. Van Hollen’s bill phases out the “alternative maximum tax” that zeroes out taxes for many, and the biggest gains hit in the middle of the income distribution, but the proposal still provides gains on average for families between the 60th and 80th percentiles.

Both proposals clearly aim to address the affordability challenge that politicians have seized on, but in doing so both frame taxes as a pure drain on affordability, with Booker even calling his the “Keep Your Pay Act.” But taxes aren’t a drain on affordability. They provide the resources needed to run the public sector, and the public sector in turn does a great deal to make life more secure and more affordable over people’s lifetimes.

Social Security and Medicare, for example, both rely on payroll taxes on workers’ wages. But they also provide income for these workers in retirement. Instead of draining affordability, these programs smooth income over the lifecycle to ensure working families can afford a decent life even when they can no longer work. Food stamps and Medicaid are financed by taxes and provide benefits to people who otherwise would not be able to afford the most basic necessities: food and health care. The same people who receive Medicaid and food stamps in one era of their lives will contribute to them through taxes in other periods when they have found steady work. Again, the taxes collected are recycled back into families’ incomes in ways that minimize suffering and severe affordability crises throughout their lives.

State and local taxes—often borne quite heavily by the broad middle class—pay for public education. This education—both K–12 and higher education—is incredibly valuable and necessary for anyone operating in modern economies. Without the taxes to support education, families would have to dig into their own pockets to pay for private schooling, and it would be delivered less efficiently and much less equitably.

Other taxes finance infrastructure and other key public goods and services, without which life would be harder and more expensive for most families.

Cutting taxes even fails on the crass political grounds of buying voters’ short-term goodwill. It’s often underrecognized (mostly, again, because of conservative campaigns to hide this fact), but taxes for the middle class have been cut a lot in recent decades. Figure A below shows the percentage point change in tax rates of households at different parts of the income distribution between 1979–2019. We stop at 2019 to compare equivalent points of the business cycle. Tax rates tend to fall sharply during recessions, which can obscure the full extent of legislative changes to tax rates. Further, cutting taxes temporarily during recessions can make some sense—tax cuts are one form of fiscal stimulus that can be used to fight recessions (unless these tax cuts are quite well-targeted on low- and moderate-income families, they tend to be less efficient stimulus than spending measures).

Figure A

The largest tax cuts have gone to the bottom fifth of households—a key policy victory of recent decades. The expansion of refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit—credits that are paid directly to lower-income families even if their amount is greater than the families’ tax liability—have essentially made the problem of taxing families into poverty almost nonexistent. These tax cuts should clearly be kept. But all households, not just those with very low incomes, have seen sizable tax cuts. Tax rates for households in the middle of the income distribution have been cut by a third since 1979.

And yet, does anybody feel like this tax-cutting has led to most U.S. households feeling great about their place in the economy and their prospects for affording a decent life today? Do these voters express warm feelings about the policymakers from both parties who provided these middle-class tax cuts?

The tax-cutting strategy has failed to make these households happy for two reasons. First, it leaves the private-sector drivers of inequality untouched, and as governments have collected less in taxes, employers and corporations have contributed less to middle-class families’ wages. Second, lower taxes have starved public-sector capacity and led to a degradation of public services. Strangely, the newly fashionable “abundance” movement often frames this degradation as a problem of public-sector excesses, but it’s clearly driven by disinvestment. In short, middle-class families value public services and the decades-long campaign to cut taxes has harmed the ability to provide them. The lessons for today’s tax debates should be clear.

The failure of tax-cutting to foster economic security and happiness is not all that surprising for scholars of U.S. attitudes toward taxes, who argue that Americans are not universally anti-tax. Instead, Americans view paying taxes as a patriotic good and a moral obligation. But they are angry about paying their taxes when they think others are shirking their part of the social contract, particularly when they think the richest people and corporations aren’t paying their fair share.

Because we are starting with such high levels of inequality and because of this public cynicism about the rich ever being forced to pay their fair share, the first priority—by far—for policymakers today should be to enact significant stand-alone tax increases on the ultrarich and corporations. The revenue raised solely from the ultrarich could close today’s fiscal gap, the difference between today’s budget deficits and what is needed to put them on a sustainable path going forward. And this act would convince the rest of Americans that the ultrarich are not always prioritized in policymaking and would make future debates about the costs and benefits of higher taxes for higher levels of public goods much healthier.

But we can’t run a decent society based on just taxing the rich and telling everybody else that taxes are an unfair drain. Oliver Wendell Holmes famously said that taxes are the price you pay for civilization. But if the taxes are paid only by the rich, we will get the civilization they want. That doesn’t seem good enough to me.

Julie Shu and Cassandra Robertson of The Century Foundation wrote a comment on how pension funds can support growth and build an economy that supports workers:

Private equity firms have increasingly come under fire for actions that are making life more difficult and unaffordable, such as driving up the prices of single-family homes, closing hospitals that aren’t profitable enough, and laying off workers at companies they have purchased. New efforts by public pension funds are hoping to counter these bad practices and instead promote investments that benefit communities and workers. 

Public pension funds have the ability to drive investment in our economy to promote shared prosperity while seeking competitive risk-adjusted returns. These funds represent over $6 trillion in capital, and are the collective retirement savings of millions of teachers, firefighters, nurses, sanitation workers, and other public employees who have earned these benefits through years of service. These funds are invested across the economy, in private equity, in real estate, and in public markets. The largest asset managers in the world rely on pension fund dollars to help fill their portfolios. 

Recognizing this power, public pension funds are increasingly instituting policies to ensure that their money works for the people who contributed it, not against them. In line with the funds’ fiduciary duty to seek diversified, consistent, risk-adjusted returns for their participants, funds are thinking deeply about what prompts growth and prosperity. Some states are using their pension funds to invest in affordable housing or infrastructure, leveraging their capital to build the future workers hope to see. But one of the most powerful innovations is a new movement of public pension funds adopting workforce principles and requiring asset managers abide by them across their portfolio. Such principles—consistent with the fiduciary duty that fund managers have—promote investments that simultaneously maximize returns and worker well-being.

Private financial markets have grown rapidly over the past two decades and play an increasingly prominent role in the U.S. economy—and in the portfolios of institutional investors, including workers’ pension funds. Today, the private equity industry manages $11 trillion in assets, and companies owned by private equity employ about one out of every thirteen U.S. workers, or 11.7 million workers nationwide. Over half of the capital that private equity firms manage comes from public pension funds and other institutional investors. These large funds, such as the California and New York City public employee retirement system funds, invest the earnings of hard-working people who spent their careers in public service. The size of these pension funds is only expected to increase in the future. By requiring asset managers to adopt workforce principles across their portfolio to ensure that their workers are treated fairly and their rights are protected as a condition of receiving investments, pension funds are not only determining how their workers’ retirement savings are invested, but also ensuring that those investments create good jobs for other workers. 

Why does this matter?

Private equity firms are focused on the short-term profits from any given deal. Public pension funds also seek competitive, risk-adjusted returns—but in addition to that, as universal owners, they are also incentivized to seek sustainable, long-term economic growth as aligned with their fiduciary duty. 

The history of the private equity model has shown that while it can provide a good rate of return to investors, it also can have significant negative externalities for workers, communities, and the economy. When public companies are taken private, this can result in significant job losses and negatively impact whole communities. For example, when Toys R Us was bought by two private equity companies and eventually forced into bankruptcy in 2018, over 30,000 employees were laid off. The private equity firm Cerberus loaded up Steward Health Care with debt, running it into bankruptcy in 2024 and closing many of its hospitals. While this left many without access to care, the private equity company made over $800 million in profit. Some deals strip companies for parts, selling the land out from underneath a company’s buildings and leasing it back at exorbitant rates, as with Red Lobster. 

Purchase of a company by a private equity firm can also lead to lower employment, lower wages, and lower productivity. Overall, this can lead to greater inequality, which will subsequently impact other parts of the portfolio through reduced economic growth, and—if the acquisition were funded with public pension fund dollars—may not benefit the very people funding the investments. 

The push to make things better.

In order to promote not only better jobs for workers but also a better economic future for the country as a whole, public pension funds are increasingly requiring better treatment of workers across their investment portfolio. As long-term, fully diversified investors with commitments decades out, public pension funds recognize that a high-road approach toward workers can be an important tool to facilitate long-term positive returns (aligned with their fiduciary duty) that depend on overall GDP growth.  

This is where the new principles being adopted by public pension funds for their private equity investments come in. These principles include industry standard wages, freedom of association, and other measures that support the workforce. The University Pension Plan of Ontario has identified inequality as a systemic risk, as they believe inequality can lead to instability and lower overall investment returns. Labor leaders, such as Sean McGarvey, Randi Weingarten, Gwen Mills, and Rebecca Pringle, have made a clear case that supporting good jobs encourages healthy returns and is therefore an advantageous strategy for investors. This perspective is supported by a large body of research.

First, research from MIT demonstrates that good jobs lead to better productivity and more competitive companies. Higher compensation can reduce turnover and increase productivity across industries, including airports, manufacturing, warehouses, and retail. Turnover can cost an employer between 5 percent and 95 percent of an employee’s annual salary, depending on the industry. Greater productivity is essential for economic growth, a key tool for pursuing higher returns. 

Second, strong safety standards are crucial to not only worker health but also investment return. Injuries and unsafe practices can be expensive and lead to reputational risk. Research from California shows that putting worker safety first reduces employee injuries and costs, while buttressing the bottom line. 

Third, pension funds often push for union neutrality since unionization can lead to better trained workers with lower turnover and higher productivity. Capital and infrastructure projects that use union labor have higher productivity and cost less, in part because of the higher skill level of the workforce. 

Finally, adherence to high-road labor practices can lead to better performance in public markets as well. Just Capital, a research organization, has found that the companies they rank as having positive worker practices outperformed the market overall. This is confirmed by evidence that investments in compensation lead to long-term higher market returns. Implementing strong workforce principles can therefore advance productivity and profitability for both private and public companies. 

For fully diversified, long-term investors such as public pension funds who touch all parts of the economy, higher productivity and lower inequality is a strong strategy to promote growth and protect future returns. Treating workers with dignity can help to achieve these goals.

Looking ahead.

Worker power and worker rights are not at odds with competitive risk-adjusted returns. They are self-reinforcing. As unions and pension trustees continue to advocate for workers in investment decisions, they are building a more sustainable economic foundation that benefits everyone. The choice is clear: pension funds can either perpetuate a business model that ultimately undermines their own portfolios, or they can champion an approach that recognizes workers as valuable assets whose wellbeing directly correlates with sustainable, broad-based economic growth. The latter path not only honors the legacy of the working people whose careers built these pension funds, but also helps ensure those funds remain robust for future generations of retirees. 

This comment caught my attention for many reasons.

First, as public pension funds become larger and manage more assets across public and private markets, what role do they play, if any, in growing the economy and supporting workers?

Last month, I discussed how OMERS' economic contribution to Ontario grew to $15.3 billion, delivering stability and social value for members and communities: 

A growing economic impact

The new report shows that OMERS activities contributed to:

• $15.3 billion in provincial GDP (an 11% increase from 2023 and a 28% increase from 2020).

• 135,200 jobs across Ontario, including almost 40,000 jobs in rural communities.

• Nearly $4.2 billion in combined federal and provincial tax revenue.

• In total, more than 832,000 Ontarians - the equivalent of 1 in 11 households - benefited from OMERS activities in 2025.

Impact across all regions of Ontario

OMERS contribution to economic activity is felt across every region:

• Greater Toronto Area: 71,500 jobs; $7.9B GDP contribution

• Southwestern Ontario: 25,800 jobs; $2.7B GDP

• Eastern Ontario: 16,800 jobs; $1.7B GDP

• Central Ontario: 14,900 jobs; $2.4B GDP

• Northern Ontario: 6,200 jobs; $0.6B GDP

And that's just OMERS. Imagine if we did a detailed study on the economic impact of all of the Maple 8 funds and how they contribute to the Canadian economy (if I remember correctly, it was done a few years ago).

Now, on to my second point, what is the economic impact large global pension funds, sovereign wealth funds and other large institutional investors have on the global economy?

It's huge, they provide stable, long-term capital and help public and private companies grow.

When these companies grow, they hire more people and the multiplier effect of all this activity on the global economy isn't trivial.

Third, what role can global pension funds and institutional investors play in public policy?

Here is the tricky part. In the US where public pensions report to state treasurers who have their own political agenda, there is more political interference in the decision-making process.

In Canada, our large public pension funds operate at arm's length from the government, they have independent boards who focus on the best interests of members.

There is no political interference but governments still maintain power (by nominating board members) and in extraordinary circumstances, can step in if they deem it necessary (think of the purge at AIMCo).

Having said this, all of Canada's large public pension funds take responsible investing very seriously and report to their members on activities related to it.

But responsible investing isn't the primary objective; rather it's a complement to investment activities to garner better risk-adjusted returns over the long run.

There are a lot of things I agree with the comment above and some things, I do not agree with.

They paint a mostly negative view of private equity, choosing Cerberus as an example, but that old way of managing assets is dead or on its way out.

If you look at what Pete Stavros at KKR is doing, they're literally forging a new path to capitalism, sharing profits with workers if they deliver and help add value to companies they acquire.

No doubt, private equity funds have a shorter investment horizon than pension funds but the smart ones extend if they can add value to their companies and reap bigger rewards.

Do pension funds have influence on private equity funds?

Yes, they do, but I wouldn't over-emphasize it. 

KKR didn't implement its new model because public pension funds forced it to. They realized it makes great economic sense, aligning the interests of workers with their interest in adding value to companies they acquire.

But pension funds can make sure that private equity funds align with their interests as well.

For example, University Pension Plan of Ontario (UPP) states diversity is a systemic risk and they make sure all the public and private companies they invest with know their views. 

So, at some level, global pension funds and other large institutional allocators have an influence, especially with smaller private equity funds.

Lastly, a big topic these days is the impact of AI on work. I tend to agree with a Harvard study that says AI doesn't reduce work, it intensifies it. 

But pension funds investing with top venture capital funds are more privy to information on how AI will shape our economy, good and bad.

Do they have a role in supporting work, or will they invest in funds that destroy work? 

Probably a mix of both if I am truthful. 

The key thing I want to make clear here is that as pension funds get bigger and command ever more assets, policymakers will lean on them to help support the economy and if their objectives coincide, they will answer the call.

Those are just some of my reflections on pensions and public policy and how they can contribute to economic growth and and build an economy that supports workers.

Below, in this episode of Blue Skies, Erin O'Toole is joined by Jim Leech, former CEO of the Ontario Teachers' Pension Plan and a well-respected voice on business issues, to discuss the current debate about whether governments should mandate public pension plans like the CPP to invest more in Canada. 

They also explore the development of the 'Canadian Model' for pension governance and why it has gained international acclaim. They also engage in a wider discussion of issues related to Canadian economic competitiveness and financial security for pensioners.

This discussion took place a year ago but it's well worth listening to it because Erin and Jim cover a lot.

 Sarah Rundell of Top1000Funds reports on how CalSTRS' One Fund approach navigates uncertainty:

Scott Chan is shocked the market hasn’t reacted more to the crisis emulating from the US-Israel-Iran conflict. But the CalSTRS CIO is confident its one fund approach allows it to position dynamically and ensure diversification no matter what is presented.

So warned CalSTRS’ CIO Scott Chan speaking at the $392 billion pension fund’s March investment committee meeting, explaining to trustees that many unknowns lie below that will impact global trade flows, the equity bull market, and in the shape of currents like AI and America’s burgeoning housing crisis, young people’s ability to tap into the American dream.

The impact of the conflict in Iran is also gathering force below the surface of an apparently benign market.

Chan said he “was shocked” that the market hasn’t reacted more to the crisis – notwithstanding the sharp rise in oil prices. He attributed the absence of a market reaction to enduring uncertainty of how events will play out.

“The market is pricing efficiently what it knows,” he said, adding: “Right now with the uncertainty, I don’t care who you talk to, if they tell you they know what’s going to happen, you should probably walk the other way.”

In the first few weeks of the conflict, CalSTRS strategy has involved rebalancing from its slight overweight to growth assets, ensuring “ample” liquidity and staying mindful of emerging opportunities. For example, the energy crisis potentially opens the door to investment opportunities in markets that are net importers of oil through the Strait of Hormuz like India, Japan, China and South Korea, where sharp falls in the KOSPI represented a potential buying opportunity.

Away from geopolitics, Chan noted other currents building like trends in fiscal policy intervention and the formation of new trade alliances that are rewriting supply chains and redirecting how capital flows. As governments grapple to manage huge deficits, he flagged the risk and opportunity in interest rate volatility and the importance of diversification, discipline and staying dynamic.

Reflecting on market impacts closer to home, Stephen McCourt, managing principle and co-CEO, Meketa, argued that new Fed chair Keven Warsh won’t necessarily push for lower rates. “If Trump’s interest is to get the Fed to lower interest rates irrespective of data, Warsh is an unusual selection.” Coupled with inflationary concerns, he said it explains why markets have priced in fewer rate cuts for 2026.

Chan said the CalSTRS’ One Fund approach, its version of a total portfolio approach, will support the investor’s demand to dynamically allocate and diversify to maximise returns in the current complex environment. It allows the team to invest tactically to position the portfolio to benefit from volatility and has required putting in place cultural and organisational structures, notably a total fund team that maps a common language of risk, and how portfolio risk is shifting.

Recent strategies include increasing capital to asset backed private credit that is less cyclical, more stable and adds diversification with a similar return to other forms of private credit. Elsewhere, strategies include rebalancing the portfolio and pursuing opportunities when the markets are discounted.

CalSTRS generated an unofficial 13 per cent return over the last calendar year, well above the 7 per cent actuarial goal, with the value of the portfolio increasing by $42.5 billion, net of fees, contributions and benefits.

The global equity portfolio rose 22.8 per cent, led by strong non-U.S. equity market performance and interest rates fell, driving strong performance in fixed income markets.

The $58.8 billion private equity portfolio yielded a positive return over the past six months and outperformed the Custom State Street Index, which is used to evaluate performance against other institutional investors.  Staff have increased co-investments, which now represent 24.6 per cent of the private equity allocation and continue to work toward the goal of 33 per cent co-investments. 

Clearly, CalSTRS is doing well, and here CIO Scott Chan explains how their One fund approach dynamically allocates and diversifies to maximize returns in the current complex environment. 

[...] It allows the team to invest tactically to position the portfolio to benefit from volatility and has required putting in place cultural and organisational structures, notably a total fund team that maps a common language of risk, and how portfolio risk is shifting.

Recent strategies include increasing capital to asset backed private credit that is less cyclical, more stable and adds diversification with a similar return to other forms of private credit. Elsewhere, strategies include rebalancing the portfolio and pursuing opportunities when the markets are discounted.

Whatever they are doing, it's working, CalSTRS delivered a gain of 13% over the last calendar year, outperforming its large Canadian peers (but underperforming Norway's giant sovereign wealth fund which gained 15.1% in 2025).

Again, it's all about asset allocation and CalSTRS is more exposed to liquid public markets (similar to Norway's Fund) but also has a sizable private equity/ private markets portfolio which seems to be performing relatively well. 

Again, outperfoming its required rate of return (7%) by 600 basis points last calendar year is nothing to sneeze at, but keep in mind, their fiscal year ends at June 30 , so these are not official returns.

No doubt, their One Fund approach is proving very useful in this environment and they managed to diversify globally properly to take advantage of opportunities.

So, kudos to CalSTRS, Scott Chan, and his investment and risk teams, they're executing nicely in a difficult environment.

Moreover, for the 11th time, CalSTRS has been named one of the Best Places to Work in Money Management by Pensions & Investments magazine:

This 14th annual survey and recognition program is dedicated to identifying and honoring the top employers in the money management industry.

“As their employees attest, the companies named to this year’s Best Places to Work list demonstrate a commitment to building and maintaining a strong workplace culture,’’ Pensions & Investments Editor-in-Chief Julie Tatge said. “In doing so, they’re helping their employees, clients and businesses succeed.’’ 

The Best Places to Work award winners are chosen based on workplace policies, practices, philosophy, systems and demographics, as well as an employee survey.

“We’re honored to receive this award, which is a testament to our team’s commitment to protect the more than 1 million California public educators and beneficiaries who rely on us to help secure their future,” CalSTRS Chief Executive Officer Cassandra Lichnock said. “The award affirms that our greatest asset is our innovative, inclusive and passionate workforce.”

"This is an acknowledgement of the amazing teamwork and passion of our investments team and our colleagues across the organization,” CalSTRS Chief Investment Officer Scott Chan said. “I'm so grateful to the team for embracing our organization's mission and continuing to strive for innovation and collaboration.”

The 2025 Best Places to Work in Money Management award winners are posted online.

Good for them, this is a well-deserved acknowledgement.

Below, in this episode of How I Invest, a conversation with Scott Chan, Chief Investment Officer of CalSTRS, to explore how he oversees a staggering $350 billion in assets (March 2025). 

Scott shares insights on CalSTRS’ collaborative investment model, their approach to private and public markets, and why they aim to be the "global partner of choice." He also discusses the importance of structural alpha, liquidity management, and identifying long-term supply-demand imbalances.

Great discussion, listen carefully to his insights and approach. 

Mary McDougall and Alexandra Heal of the Financial Times report Canadian pension funds count cost of private equity slump:

A number of Canada’s biggest investors lost money on their private equity holdings last year as a downturn in the buyout sector continued to weigh on returns at some of the world’s largest retirement funds.

Ontario Teachers’ Pension Plan, which manages C$279bn ($206bn) of assets, and the C$145bn Ontario Municipal Employees Retirement System reported returns of minus 5.3 per cent and minus 2.5 per cent respectively for their private equity portfolios in 2025. For OTPP, it was the worst performance for this asset class since 2008 and for Omers since 2020.

La Caisse, Quebec’s C$517bn state pension fund, also reported weak private equity results. The group said its PE portfolio returned 2.3 per cent last year, well below the 12.6 per cent gain in its benchmark index, half of which is made up of listed stocks.

The Healthcare of Ontario Pension Plan, which published results this week alongside OTPP, reported private equity returns of 3.6 per cent in 2025. Its broader private markets portfolio returned 2.1 per cent, compared with 11.7 per cent for its listed holdings.

“Those are pretty dismal numbers, in private equity returns should be at 15 per cent minimum,” said one Canadian pension investor.

Rising interest rates since 2022 have weighed on private equity investment, with higher borrowing costs hitting dealmaking, returns and exit options.

Canada’s pension system is a major private equity investor with more than 20 per cent of public sector pension money allocated to the asset class, according to think-tank New Financial.

Dale Burgess, executive managing director of equities at OTPP, said private equity investors had been “navigating increased cost of capital, more constrained exit markets and greater operating complexity, creating a drag on returns”.

OTPP’s PE portfolio dropped in value from C$60.4bn to C$50.8bn last year, partly driven by full or partial sales of its investments in insurance brokerage BroadStreet Partners, Indian hospital chain Sahyadri Hospitals and Canadian retirement home provider Amica Senior Lifestyles.

To address the challenges, OTPP said it had made a “strategic shift” towards investing in areas where it believes it has a competitive edge, particularly the financial, services and technology sectors.

Omers said its C$25.6bn private equity portfolio had a net investment loss of C$700mn last year, with challenges in its industrial holdings and “weak performance across our earlier-stage growth and venture portfolios”. In recent months Omers has announced sales in its private equity portfolio including California-based care manager Paradigm and Toronto-based home care business CBI Health.

La Caisse blamed its disappointing private equity results on “slow earnings growth for portfolio companies and lower multiples in the technology and healthcare sectors”.

Overall returns across the pension companies were boosted by buoyant stock markets last year. OTPP’s total portfolio net return was 6.7 per cent, compared with 6 per cent for Omers and 9.3 per cent for La Caisse.

A quick note on the paltry returns in PE portfolios of some of Canada's Maple 8 funds (from the ones that reported thus far).

Last week, I spoke with OTPP's former CEO Jim Leech and asked him point-blank: "What's going on with OTPP's PE portfolio?"

Jim was in good spirits. He had just come back from skiing with his grandchildren in British Columbia and told me: "I don't know. All I can tell you is there is a lot more competition nowadays compared to when I was heading up Teachers' Private Capital." 

From my vantage point, covering all these pension plans/ funds, clearly 2025 wasn't a great year in Private Equity, and it wasn't a particularly great year in private markets.

Jim Leech is right, the game has changed significantly, there's way too much competition in private equity and that has spread to infrastructure, real estate and private credit.

Alternatives used to be a niche market, now there’s not much "nichiness" going on. Everyone is doing the same thing, the big giants keep raising bigger funds, and everyone is waiting for some serious financial crisis (aka dislocation in the markets) to put a lot of dry powder to work.

All I know is there is reason to be concerned, the Maple 8 funds shifted billions collectively into private markets over the last 20 years and that game seems stale these days.

Private Equity remains an important asset class but there are a lot of discussions taking place at these large shops.

If you underperform your benchmark over one year or even three years, it's a tough pill to swallow but you'll survive. 

If you underperform your benchmark in PE for 5 years, you're in deep trouble.

I'm not sure the situation is that dire, but it's definitely not the best of times for private markets, especially private equity and real estate.

Things might be slowly changing for the better -- I think they are -- but investors are anxious and worried.

Don't forget, in Canada, the whole "raison d'etre" of shifting into private markets was to manage more internally and add value without paying excessive fees.

If you can't deliver there, your whole "value add" proposition is in trouble.

Still, I don't want to take one or two bad years and extrapolate. I think there's a lot of generalizing going on in private equity/ private credit and I want to be very careful because the level of pessimism is a bit absurd in my opinion.

Private equity stocks are finally popping this week, too soon to tell whether they're turning the corner and headed back up for good but I'm paying attention.

All this to say, no doubt, private equity is in a slump but it's not dying and going away, that's just plain silly.

Does the industry need a good shakeout? You bet, it's already underway.

The dispersion of returns of top PE funds and top private credit funds with bottom ones has grown considerably over the last few years. 

Only the best will survive and that's the way it should be.  

Below, private equity returned fewer profits to investors for a fourth straight year as the industry sat on $3.8 trillion of unsold assets and struggled to raise money for new funds. Bloomberg's Allison McNeely reports (watch this clip here as I cannot embed it below).

Also, Orlando Bravo, founder and managing partner of Thoma Bravo, sits down with CNBC's Leslie Picker to discuss the impacts of artificial intelligence on the software sector.

Third, KKR Co-CEO, Scott Nuttall discusses the firm’s evolution into a diversified global investment platform and its dealmaking priorities with Bloomberg’s Dani Burger at Bloomberg Invest 2026 in New York.

Fourth, Ares Management Corporation Co-Founder & CEO, Michael Arougheti, discusses the private credit cycle, firm growth and the push to expand access beyond traditional institutional investors. He spoke with Bloomberg’s Dani Burger at Bloomberg Invest 2026 in New York.

Lastly, Apollo Global Management Inc. Chief Executive Officer Marc Rowan warned that a shakeout is coming for private credit firms as the industry faces a wave of concerns about rising defaults on loans to software companies.

For weeks, private credit executives have faced questions from investors over whether the $1.8 trillion industry can withstand sustained pressure if the software sector is upended by artificial intelligence in the coming years. Rowan’s comments came as business development companies have been hit by redemptions in recent weeks amid those broader investor concerns.

“This will be a shakeout — I don’t think it is going to be short term,” Rowan said in an interview with Bloomberg News Editor-in-Chief John Micklethwait at Bloomberg Invest in New York. “It was foreseeable. It was predictable. And all you can do is have been a good underwriter, a good risk manager, have done a small number of stupid things.”

Monte Stewart of Canada CRE News reports Sagard, La Caisse are investing $490M in US-based IOS Properties:

Sagard Real Estate and La Caisse are launching a partnership to invest about $490 million in industrial outdoor-storage properties across major U.S. infill markets.

The partnership will pursue an industrial outdoor storage (IOS) strategy focused on key U.S. seaport markets where tenant demand is driven by proximity to major ports, population centres and trade infrastructure, said the companies. Priority markets include Southern California, the greater New York City and northern New Jersey region, the San Francisco Bay Area, Houston, and the Baltimore–Washington, D.C., metropolitan area.

The initiative brings together Sagard Real Estate (SRE), a U.S.-based real estate investment advisor and subsidiary of Montreal-based Sagard, and La Caisse. The partnership has an initial target gross asset value of CAD 490 million (US$360 million), with the option to scale through additional commitments.

“Our partnership with Sagard enables us to create a dedicated IOS platform that strengthens our real estate portfolio construction strategy through diversification into alternative sectors,” said Rana Ghorayeb, executive vice-president and head of real estate at La Caisse. “IOS is a critical supply chain asset class, benefiting from strong structural tailwinds: E-commerce growth, global trade, and nearshoring. By leveraging Sagard’s fully integrated regional teams and proven off-market sourcing capabilities, we gain privileged access to high-quality opportunities.”

Sagard Real Estate President Mark Bigarel said the organizations worked closely to develop the strategy and target markets.

“This partnership brings together two like-minded organizations with aligned values and complementary strengths,” he said. “With La Caisse’s scale and long-term vision, combined with our operator-driven expertise, we are well-positioned to capture compelling opportunities in markets with strong fundamentals and durable demand drivers.”

The partnership has completed its first acquisition in the Meadowlands submarket serving the greater New York City area. The fully leased IOS property functions as an operational hub with strong connectivity to Manhattan and the Port of New York and New Jersey.

“Our IOS program focuses on some of the most strategically important U.S. logistics and trade markets, and this first closing directly advances our investment objectives,” said Chad Messer, deputy CIO and portfolio manager at Sagard Real Estate. “With limited supply and high demand for well-located outdoor-storage facilities near major seaports and population hubs, we believe this strategy is uniquely positioned to generate attractive, risk-adjusted returns through disciplined sourcing, value creation, and active management.”

Sagard Real Estate said the partnership reflects both organizations’ commitment to building a scalable IOS platform across major U.S. port and population-centre markets, supported by long-term capital and durable demand fundamentals. 

Nolan Keegan of Hoodline also reports big-money yard grab hits Meadowlands as Sagard, La Caisse roll out $360M storage play:

Two heavyweight investors are teaming up to turn unglamorous pavement into a serious cash play. Sagard Real Estate and La Caisse have launched a new U.S. joint venture aimed at buying and operating industrial outdoor storage yards near major ports, with an initial gross asset target of CAD 490 million (about USD 360 million) and a first deal already inked in the Meadowlands submarket. The focus is on fenced, paved yard space used by contractors, trailer operators and equipment fleets at a time when infill land near key seaports is getting scarce. Executives are pitching the strategy as a way to lock in steady income from a niche corner of the logistics chain where well-located sites are hard to find.

In a company release, Sagard Real Estate said the partnership will target Southern California, the greater New York City and northern New Jersey region, the San Francisco Bay Area, Houston and Baltimore/Washington, D.C., and that the joint venture can expand further if additional capital is committed, according to Sagard Real Estate. La Caisse, the Quebec pension giant that reported net assets of CAD 517 billion as of Dec. 31, 2025, is serving as the strategic capital partner in the vehicle, per La Caisse.

Why yard space is suddenly a prime asset

Executives describe industrial outdoor storage, or IOS, as a structural investment play tied to the rise of e-commerce, global trade flows and nearshoring, all colliding with a finite supply of infill yard sites near big population centers and ports. "IOS is a critical supply chain asset class, benefiting from strong structural tailwinds - e‑commerce growth, global trade, and nearshoring," said Rana Ghorayeb, La Caisse’s head of real estate, in the companies' announcement via Sagard Real Estate. Sagard added that the partnership will lean heavily on regional sourcing and off-market access as the backbone of its value-creation strategy.

First Meadowlands deal plants the flag

The joint venture’s debut purchase is a fully leased IOS hub in the densely built-out Meadowlands submarket serving the greater New York City area. The partners say the property’s strong connectivity to Manhattan and the Port of New York and New Jersey underpins long-term structural demand for the site. Industry coverage has highlighted the CAD 490 million (roughly USD 360 million) initial target for the program and noted that the partners have not released detailed information about the specific location, according to Bisnow.

Local fallout: better yards, tougher land markets

Institutional buyers can upgrade yard operations with improvements like paving, lighting and security, but their arrival can also tighten local land markets and fuel community pushback over truck trips and shifting land uses. That tension is already apparent in Southern California, where investors have been converting underused parcels and flex properties into IOS yards, according to goes all in on industrial storage land grab coverage and a MacLeod & Co. market report that points to tight supply and rising per-acre pricing.

What this means for other port cities

Because the joint venture includes an option to scale, industry watchers expect more acquisitions in major seaport markets and even fiercer competition for infill industrial land, according to observers cited by Bisnow. For the full details on the strategy and initial rollout, see the companies’ press announcement and the original distribution via WebWire and the firms’ releases. 

Last week, La Caisse issued a press release stating it is launching an industrial outdoor storage joint venture strategy with Sagard Real Estate:

Sagard Real Estate (SRE), a leading U.S.-based real estate investment advisor and subsidiary of Sagard, a global multi-strategy alternative asset management firm, and La Caisse (formerly CDPQ), a global investment group, today announced the launch of a new partnership focused on an Industrial Outdoor Storage (IOS) strategy across major U.S. infill markets, with an initial target gross asset value of CAD 490M (USD 360M) and the option to scale the partnership through further commitments.

This partnership between two major Québec institutions will deploy an IOS strategy focused on key U.S. seaport markets where strong tenant demand is driven by proximity to major ports, population centers, and trade infrastructure. Priority markets include Southern California, greater New York City/northern New Jersey, the San Francisco Bay Area, Houston, and the Baltimore/Washington, D.C., metropolitan area.

“Our partnership with Sagard enables us to create a dedicated IOS platform that strengthens our real estate portfolio construction strategy through diversification into alternative sectors,” said Rana Ghorayeb, Executive Vice-President and Head of Real Estate at La Caisse. “IOS is a critical supply chain asset class, benefiting from strong structural tailwinds—e-commerce growth, global trade, and nearshoring. By leveraging Sagard’s fully integrated regional teams and proven off-market sourcing capabilities, we gain privileged access to high-quality opportunities.”

“We are proud to partner with La Caisse on this new IOS strategy. Our teams have worked closely to define the markets, lifecycle, and we look forward to executing on this together,” said Mark Bigarel, President of Sagard Real Estate. “This partnership brings together two like-minded institutions with aligned values and complementary strengths. With La Caisse’s scale and long-term vision, combined with our operator-driven expertise, we are well-positioned to capture compelling opportunities in markets with strong fundamentals and durable demand drivers.”

The partnership has closed its first acquisition, an IOS investment in the highly infill Meadowlands sub-market, serving the greater New York City area. The location of the fully leased operational hub offers strong connectivity to Manhattan and the Port of New York and New Jersey, supporting long-term structural demand.

“Our IOS program focuses on some of the most strategically important U.S. logistics and trade markets, and this first closing directly advances our investment objectives,” said Chad Messer, Deputy CIO and Portfolio Manager, Sagard Real Estate. “With limited supply and high demand for well-located outdoor storage facilities near major seaports and population hubs, we believe this strategy is uniquely positioned to generate attractive, risk-adjusted returns through disciplined sourcing, value creation, and active management.”

The partnership affirms Sagard Real Estate and La Caisse’s commitment to advancing IOS across major U.S. port and population-center markets, establishing a scalable platform supported by long-term capital and durable demand fundamentals.

ABOUT SAGARD REAL ESTATE

Sagard Real Estate is a real estate investment advisor and operator providing investment management services throughout the U.S., including portfolio management, acquisitions, debt origination, asset management, development, and property management for investors. With US$6.0 billion in assets under management, Sagard Real Estate offers commercial real estate investment strategies through separate accounts and commingled funds. Founded in 1997, the firm is headquartered in Denver and maintains regional investment offices in New York City, Charlotte, Austin, Los Angeles, and San Francisco metro areas. Sagard Real Estate is a part of Sagard, a multi-strategy alternative asset management firm.

For more information, visit www.sagard.com/realestate or follow us on LinkedIn.

ABOUT SAGARD

Sagard is a global multi-strategy alternative asset management firm with more than US$33B under management1, 190 portfolio companies, and 440 professionals.

We invest in venture capital, private equity, private credit, and real estate. We deliver flexible capital, an entrepreneurial culture, and a global network of investors, commercial partners, advisors, and value creation experts. Our dynamic and supportive ecosystem gives our partners the advantage they need to learn, grow and win at every stage. The firm has offices in Canada, the United States, Europe and the Middle East.

For more information, visit www.sagard.com or follow us on LinkedIn.

1As of September 30, 2025

ABOUT LA CAISSE

At La Caisse, formerly CDPQ, we have invested for 60 years with a dual mandate: generate optimal long-term returns for our 48 depositors, who represent over 6 million Quebecers, and contribute to Québec’s economic development.

As a global investment group, we’re active in the major financial markets, private equity, infrastructure, real estate and private credit. As at December 31, 2025, La Caisse’s net assets totalled CAD 517 billion. For more information, visit lacaisse.com or consult our LinkedIn or Instagram pages.

Alright, it's Monday, most people are off in Ontario, Alberta and British Columbia this week, so I expect it to be quiet in the pension world (not in markets).

This joint venture between Sagard Real Estate and La Caisse caught my attention last week for two reasons.

First, last September, I wrote about how OTPP is launching a JV with Sagard Real Estate to invest in US industrial properties.

The real estate subsidiary of Sagard is now launching a joint venture with La Caisse focused on an Industrial Outdoor Storage (IOS) strategy across major US infill markets, with an initial target gross asset value of CAD 490M (USD 360M) and the option to scale the partnership through further commitments. 

Clearly, Sagard Real Estate is attracting top Canadian pension funds because of its expertise and experience in traditional and niche strategies.

Second, I like this strategy because instead of playing pure logistics, it's more defensive and really deals with the scarcity of land issue near major ports. From the second article:

The focus is on fenced, paved yard space used by contractors, trailer operators and equipment fleets at a time when infill land near key seaports is getting scarce. Executives are pitching the strategy as a way to lock in steady income from a niche corner of the logistics chain where well-located sites are hard to find. 

The article also states:

Institutional buyers can upgrade yard operations with improvements like paving, lighting and security, but their arrival can also tighten local land markets and fuel community pushback over truck trips and shifting land uses.

But La Caisse and Sagard Real Estate both espouse sustainable investing and I doubt you'll see community pushback.

In short, I like this joint venture because if it's done correctly, you can realize great risk-adjusted returns in this Industrial Outdoor Storage (IOS) space. 

As Rana Ghorayeb, Executive Vice-President and Head of Real Estate at La Caisse states in the press release:  

“IOS is a critical supply chain asset class, benefiting from strong structural tailwinds—e-commerce growth, global trade, and nearshoring. By leveraging Sagard’s fully integrated regional teams and proven off-market sourcing capabilities, we gain privileged access to high-quality opportunities.” 

I also like what Chad Messer, Deputy CIO and Portfolio Manager, Sagard Real Estate

“Our IOS program focuses on some of the most strategically important U.S. logistics and trade markets, and this first closing directly advances our investment objectives. With limited supply and high demand for well-located outdoor storage facilities near major seaports and population hubs, we believe this strategy is uniquely positioned to generate attractive, risk-adjusted returns through disciplined sourcing, value creation, and active management.” 

There you have it, it's all about generating great risk-adjusted returns during volatile and uncertain times.

Lastly, speaking of volatile and uncertain times, earlier today I learned Iran hit key UAE oil port and Dubai airport.

Keep in mind, La Caisse invested US$2.5 billion in 2022 to acquire stakes in DP World’s key Dubai assets, including the Jebel Ali Port, Jebel Ali Free Zone, and National Industries Park. This partnership made CDPQ a major partner in the Middle East's largest port. 

I hope the people working there are safe and these assets were not hit in these strikes but clearly we are now seeing the risk of war on key infrastructure assets in that region.

Below, in this epsiode of The Weekly Take from CBRE, Spencer Levy explores the world of Industrial Outdoor Storage (IOS) with Brian Fiumara & Myles Harnden from CBRE and Nick Firth from Industrial Outdoor Ventures. From its unique benefits and challenges to capital markets and pricing, environmental and regulatory concerns, and future outlook, get the inside scoop on this exciting new asset class.

Also, Industrial Outdoor Storage (IOS) is booming, a discussion with expert Vytas Norusis, Senior Valuation Services Director at Colliers.