OMERS targets airports in strategic partnership

OMERS Strategic Investments, the investment entity of the $43 billion Ontario Municipal Employees Retirement System (OMERS) focused on co-investment opportunities in private markets, has formed a long-term strategic partnership with HAS Development Corporation (HASDC) and Airport Development Corporation (ADC) to pursue airport acquisitions.

OMERS Strategic Investments was formed in March with a specific mandate to secure co-investment relationships with like-minded investors from around the world, and facilitate a move to the fund’s target of about 42 per cent of investments in private markets.

This partnership, with HASDC, an affiliate of the Houston Airport System, and Canadian airport developer, ADC, has been formed specifically to pursue airport acquisition and operation opportunities, initially in Latin America.

The partnership’s long-term strategy is to deliberately expand to other regions of the world to become a key global airport owner and operator.

ADC and HAS Airports have worked together as airport operator and equity investors on a number of projects. In July this year they completed the acquisition of the contract for the development, investment and operation of the Juan Santamaria International Airport in San Jose, Costa Rica, with joint venture Brazilian partner Andrade Gutierrez Concessoes.

It also owns a 45 per cent interest in the newly awarded 20-year concession for the Daniel Oduber Quiros Internal Airport in Liberia, Costa Rica.

Chief executive of OMERS Strategic Investments, Jacques Demers, said it is forging long-term alliances and partnerships on behalf of OMERS and ADC and HAS Airports will form a strategic platform in the execution of the global strategy.

HAS Development Corporation is an affiliate of Houston Airport System, operator of George Bush International Airport, Hobby Airport and Ellington Airport. Airport Development Corporation was the developer of Terminal 3 at Toronto’s Pearson International Airport and the Terminals at Budapest Airport.

Since 2003 OMERS has reduced its exposure to public market investments from 82.2 per cent to 60.2 per cent at the end of 2008, with a target allocation of 57.5 per cent. In that time the exposure to private market investments has increased from 17.8 per cent to 39.8 per cent.

A couple of years ago OMERS implemented an asset allocation mix that would see the fund invest up to 35 per cent in infrastructure and real estate assets. It established Borealis Infrastructure to access infrastructure investments and consolidated the real estate assets under Oxford Properties.

Part of the mandate of OMERS Strategic Investments is to enhance the current and future capabilities of these investment entities and source and close deals more efficiently and effectively.

OMERS also has a plan to actively manage up to 90 per cent of its assets, up from the current level of about 65 per cent, and is in the process of reviewing its asset mix allocations to assess whether any changes should be made.