Big Canadian, Australian funds go shopping

The Canada Pension Plan Investment Board (CPPIB) and Australia’s Future Fund have banded together to buy out the majority of investors in a direct property fund.The big institutions bought $673 million in property assets from 10 of the 12 existing investors in an unlisted property fund run by Colonial First State Global Asset Management (CFS GAM), turning the fund into a retail property-focused investment vehicle called the CFS GAM Property Retail Partnership.

The buy-out of existing investors, described in an announcement as a “recapitalisation and restructure”, will see CFS GAM remain as the manager of the fund.

The partnership currently manages $1 billion of investments in regional and sub-regional shopping centres in Australia, and provides the opportunity for other major institutional investors to join in a ‘clubbing’ arrangement.

Darren Steinberg, head of property at CFS GAM, said the diversified portfolio would have less than 20 per cent gearing, and that parent company Colonial First State, a large Australian financial services provider, would not invest in the partnership but would be paid management fees.

At March 31, the Future Fund invested 4 per cent of its $61 billion (excluding Telstra shares) in property. Among its publicised deals is its 50 per cent stake in the $426 million Lakeside Joondalup Shopping City in Perth, acquired through a joint-venture with Australian manager Lend Lease.

The $122 billion CPPIB has an active interest in Australian property, being an 80 per cent shareholder in the $359 million unlisted Goodman Australian Development Fund. Last year, it and the Ontario Teachers Pension Plan unsuccessfully attempted to take over toll road operator Transurban. Each has a 14 per cent stake in the business.

Sponsored Content

Leave a Comment

Sort content by

CFA to lead industry out of crisis

Protecting the pension system is one of six key themes at the centre of the CFA Institute’s Future of Finance initiative as it aims to empower the investment industry to take leadership in restoring trust. Speaking at the sixty-sixth annual CFA Institute conference in Singapore this week, president and chief executive of the CFA Institute,

Tail risk parity, V 1.0

Just when you thought you were safe, the next reiteration of risk parity has arrived. AllianceBernstein’s tail risk parity takes the concept of risk parity, reallocating assets uniformly according to risk, but it uses tail risk, not volatility, as the core measure. The concept of risk parity is a portfolio diversified according to risk, rather

Retirement: a cause worth working on

There are two things that drive the newly appointed global chief operating officer of State Street Global Advisors, Greg Ehret, in his bid to improve the client experience: the retirement business is a cause worth working on and the clients are the reason the business exists. Ehret was appointed to the new position at SSgA,

Pension funds, where banks no longer go?

There continues to be potential for pension capital appearing where bank lending no longer wants to go. Commentators in the UK and continental Europe have heightened expectations that pension funds will step in to help fill the continent’s bank financing gap. Societe Generale, for instance, recently predicted further “disintermediation” by investors sidestepping banks and looking

Building consensus for investment beliefs at CalPERS

An investment-beliefs workshop for the CalPERS board, held in April, revealed five areas, including active management, where the views of the board and staff lacked consensus. The contentious, or unsettled, topics for discussion were active management, private asset classes, sustainability (environmental, social and governance), investment performance targets and stakeholder considerations. At the board workshop, Janine

Behind PGGM’s ESG index

In 2010 PGGM conducted a study to see if it was possible to reduce the number of companies it invested in from 4000 to 400, based on its environmental, social and governance leanings, and still maintain it’s beta risk/return profile. The idea was that the €133-billion ($174-billion) fund would better know and understand what it

Previous