The Infrastructure Investor 30, Infrastructure Investor magazine’s ranking of the 30 largest infrastructure investors in the world, is giving pensions an idea of how to scale the heights of infrastructure investing: go direct to go large.
All of the pension plans to finish in the top 10 include pension investors with direct investment programmes. These include the Ontario Municipal Employees Retirement System (OMERS) in fifth place, Caisse de Depot et Placement du Quebec in sixth place and the Ontario Teachers Pension Plan in ninth spot.
The Infrastructure Investor 30 measures the amount of capital created for infrastructure investing over the last five years by key participants in the asset class such as pensions, developers and fund managers.
Toronto-based OMERS, which invests directly through its infrastructure investment subsidiary, Borealis, dedicated $6.2 billion of equity to the asset class since January 2005, according to the ranking. Caisse de Depot, which has invested directly in high-profile deals such as the buyout of UK airport operator BAA, was close behind on $6.1 billion. And the Ontario Teachers Pension Plan, which has been investing in infrastructure since 2001, generally invests via the direct route and formed $4.8 billion of capital for infrastructure over the same period.
The direct investment trend holds even beyond the top 10 – only pension managers with direct investment capabilities found their way into the Infrastructure Investor 30 top 15. Toronto-based Canada pension Plan Investment Board, which only goes the direct route for its infrastructure investments, finished in 11th place with $4.25 billion of capital formed for infrastructure, while ABP, the €240 billion Dutch pension manager, finished in 15th place at $3.2 billion. ABP invests in infrastructure through a combination of fund commitments, co-investments and direct investments.
Pensions that had smaller direct investment programmes or relied less heavily on the direct route to make their infrastructure investments finished in the bottom half of the ranking. These included Future Fund, the Australian state wealth fund, as well as AustralianSuper, both of which have generally relied on fund managers to fulfill their portfolio strategies.