Teachers' Pension Fund Tries and Succeeds at Private Equity

The Ontario Teachers' Pension Plan, which pays out almost twice the amount it collects in contributions, is making up the shortfall by trying its hand at the private equity game.

The approach is working. Over the last four years, the plan's private equity portfolio has garnered an average return of 24%, reports CNBC's Melissa Lee. The Ontario Teachers' fund employs an in-house private equity staff of 55.

"We operate the fund as a business--for us that's very important," said Ontario Teachers' Claude Lamoureaux. "And our [private equity] people, they have the same attitude."

A teacher who signs on for the pension plan may still be cashing its checks 70 years down the line. For that reason, the fund focuses on long-term investments--including the Toronto Maple Leafs and Canada's Yellow Pages--that will bring stable returns over time.