CPPIB expands infrastructure investments

The C$105.5 billion ($90 billion) Canadian Pension Plan Investment Board (CPPIB) has vastly expanded its infrastructure investments, with its proposal to acquire all the stapled securities of Macquarie Communications Infrastructure Group being accepted by security holders.

CPPIB’s proposal represents a total equity value of MCG at $1.28 billion and the total consideration for the transaction, including amounts used to repay debt, is expected to be approximately $1.7 billion. The Australian-based Macquarie Communications Infrastructure Group owns interest in Arqiva (48 per cent), Airwave (50 per cent) and Broadcast Australia (100 per cent).

Senior vice president, private investments at CPPIB, Mark Wiseman, said the transaction enables the board to
expand its infrastructure portfolio with the acquisition of a diversified group of high-quality infrastructure assets that it believes will deliver stable cash flows to the CPP Fund for many years to come.

“We are pleased that MCG’s security holders voted overwhelmingly in favour of our proposal. As a long-term investor, we look forward to working with each MCG portfolio company management team to continue developing and growing their respective businesses,” he said.

As at March the CPPIB had 4.3 per cent allocation to infrastructure.

The other asset classes were public equities (44 per cent), private equities (13.4 per cent), fixed income (27.9 per cent), real estate (6.5 per cent) and inflation-linked bonds (3.9 per cent).

The CPPIB uses a total portfolio approach as an overall principle for designing its portfolio and making investment decisions.

This approach focuses on the risk/return characteristics of the investments rather than traditional
asset labels.

Its infrastructure investments include gas, water, and communications including interests in AWG, PSE, TDF, Transelec, Wales & West Utilities.

Before joining CPPIB, Wiseman was formerly head of the Ontario Teachers’ Pension Plan’s private equity fund and co-investment program. He works alongside Graeme Bevans, vice president and head of infrastructure, in the private investments department.