Institutional Excitement: Canada's biggest pension funds doubling down on aftermarket investments

Toronto, Ontario -- Canada's largest institutional investors are looking on the auto aftermarket and recycling sector with renewed interest.

According to a disclosure filed with the Securities and Exchange Commission, the Ontario Teachers', which manages $255 billion of retirement savings, increased its investment in LKQ during the first quarter of 2025.  The firm purchased 6,513 shares of the auto parts company, raising its total investment to about $350,000. 

Filings show an even more dramatic investment in the auto recycling sector was made by the $590 billion Canada Pension Plan. Its investment board purchased 35,056 shares in Copart, bringing its total investment in the auto recycling company up by more than eight percent to US$25,399,000.

The investments came during a period in which the Trump administration imposed a series of sweeping tariffs, including on on foreign auto mobiles and auto parts. Some experts have speculated that the tariffs could prove to be a substantial benefit to U.S.-domiciled auto recycling companies by driving up prices for used and non-OEM parts.

Not everyone is convinced tariffs will benefit auto parts companies. In a presentation to investors in February, Jeff Liao, chief executive officer of Copart, rhetorically asked himself what the impact of the tariffs would be for the company. 

“It's, frankly, similar to an inquiry that we get from time to time about whether high used car prices or low used car prices are better for our business. The reality is that we're somewhat ambivalent.”

He went on to say a tariff-oriented trade policy would have a broadly neutral impact on the business. 

“As you know, in general, the effects of tariffs are largely inflationary for each of the factors that in turn affect our business with the corresponding downstream effects on our unit volume, our selling prices and our operating profit.”

“Inbound tariffs in isolation would increase the cost of repair parts for vehicles, which, all else [being] equal, would increase total loss frequency and drive increased volume to Copart.”