Canada Pension Plan Investment Board invests in Associated British Ports

TORONTO – The Canada Pension Plan Investment Board and a British partner are spending about C$2.9 billion to acquire at least 30 per cent ownership in a company that owns and operates 21 ports in England, Scotland, and Wales.

The board and Hermes Infrastructure are buying their initial stake in Associated British Ports from GS Infrastructure Partners and Infracapital. They could potentially buy an additional 3.33 per cent, which would make them one-third owners of ABP.

Borealis Infrastructure, which is an arm of the Ontario-based OMERS plan for current and retired employees of Ontario municipal governments, will remain one of ABP’s shareholders as well as the Government of Singapore Investment Corp.

CPPIB will be providing a “majority” of the money for the ABP deal, said Cressida Hogg, global head of infrastructure for the Toronto-based fund manager. She declined to be more specific.

The board has bid before on port assets but had been unsuccessful until ABP which Hogg said was a “must-have asset.”

“What we see is that growth is really picking up in the U.K,” Hogg said in an interview from London.

“We think that the volumes of port traffic in and out of the country are going to be sustainable for the very long term and ABP will benefit from that.”

CPPIB invests money that’s not currently required to pay beneficiaries of the Canada Pension Plan.

The Associated British Ports deal is the second major investment in the United Kingdom this month by CPPIB, which manages about $238.8 billion in assets on behalf of the Canada Pension Plan, including $13.1 billion on global infrastructure.

The board already had a large presence in the U.K., with about $14.3 billion in investments in several sectors as of Dec. 31, 2014. Earlier this month, the CPPIB bought a portfolio of 40 student residences across the United Kingdom for $2.1 billion.