Ontario Teachers in talks with Prague airport

The C$106bn Ontario seeks to follow in the wake of Canada Pension Plan Investment Board’s deal with Auckland International Airport, with a direct investment in Prague Airport.

Canada’s largest single-professional pension, the Ontario Teachers’ Pension Plan, is in talks to acquire a 50 percent stake in Prague Airport in partnership with France’s state-owned operator Aeroports de Paris.

The C$106 billion ($105 billion; €67 billion) fund told PERE it was in talks with the state-run Czech Republic airport as part of its infrastructure investment strategy.

More than 12 million passengers passed through Prague Airport each year, making the terminal the largest airport in the Czech Republic and the second biggest in Central Europe.

A spokeswoman for the Ontario fund said they were working with Aeroports de Paris and Prague Airport regarding a possible deal although no financial terms were disclosed. Infrastructure was a key element of Ontario’s investment allocation strategy, she added, as the returns were tied to inflation thereby providing a hedge for us inflation-protected pensions.

In 2007, Ontario partnered with Victorian Funds Management to buy a 48.25 per cent stake in the UK’s Birmingham International Airport for C$918-million, a portfolio that included investments in ports, toll roads and gas and water utilities.

The news comes as pensions funds increasingly start looking to the real estate and infrastructure asset class.

Last week Canada Pension Plan Investment Board won its bid to take a minority stake in Auckland International Airport in a deal worth an estimated C$1.4 billion.

Just under a third of shareholders in the New Zealand airport agreed to the C$119 billion Canadian fund’s offer of NZ$3.6 ($2.9; €1.8) per share for a 39.2 percent stake.