When OMERS executives closed a $12.5 billion-plus infrastructure co-investment program in June, they raised money not only from large institutional investors, but also from money managers looking to expand their businesses into infrastructure.
In this way the C$65 billion (US$59.8 billion) Toronto-based pension fund has managed to beat the money management industry at its own fundraising game.
OMERS, the Ontario Municipal Employees Retirement System, long has been spreading its “brand” by setting up several money management subsidiaries, including its infrastructure unit, Borealis Infrastructure.
OMERS' newest infrastructure effort is a novel twist. The pension fund has raised the co-investment money for its Global Strategic Investment Alliance. The alliance is designed as a pool to co-invest with OMERS, which made a $5 billion commitment to the alliance.
The alliance is the first time Borealis Infrastructure will be investing capital for outside investors. (OMERS has had the authority to manage third-party money since 2009.)
Borealis Infrastructure is the general partner of the alliance, which has a 15-year lockup, much longer than the typical private equity fund.
The alliance will invest in stable, revenue-producing large projects including airports, railways, ports, gas pipelines and power generation and distribution, mainly in North America and Europe.
Rosewater Global, another OMERS subsidiary, is providing administrative support to the alliance.
Borealis Infrastructure executives were on the road fundraising for more than two years, and the firm held its first close on capital for the alliance with $7.5 billion in 2012.
The alliance has attracted a diverse group of investors — including Japan's Government Pension Investment Fund, Development Bank of Japan, Pension Fund Association of Japan, a consortium of Japanese companies and pension funds led by Mitsubishi Corp., and money manager McMorgan & Co.
The commitments “provide a strong endorsement of both OMERS' strategy of developing third-party capital relationships with like-minded institutional investors as well as the investing strength of ... Borealis Infrastructure,” George Cooke, chairman of the board of directors of OMERS Administration Corp., which oversees OMERS' investment strategy and administration, said in a written statement released in March when Japan's US$1.25 trillion GPIF committed.
The alliance was aimed at big investors; the minimum commitment was $1.25 billion, Lori McLeod, director, media relations at OMERS, said in an e-mail.