Caisse de Depot et Placement du Quebec, Montreal, which oversees investments of Quebec's public pension funds, is focusing on distribution instead of production as a way to gain returns from energy when oil prices are sinking.
Its most recent deal, announced May 1, was the joint acquisition (with General Electric Co.'s GE Energy Financial Services) of Southern Star Central Corp., owner of a U.S. natural gas pipeline.'
The co-investment is part of the Caisse's C$11 billion in infrastructure investments, or 5% of total assets. In contrast, the Caisse has 3% in direct investment in energy.
Caisse de Depot has C$225.9 billion ($185.7 billion) under management.
Infrastructure investments at the Caisse returned 13.2% in 2014, said Maxime Chagnon, Caisse spokesman. No performance for direct energy investments was available because the Caisse doesn't disclose returns beyond broad investment categories, Mr. Chagnon added. But the S&P Oil & Gas Exploration and Production Select Industry index was down 29.42% last year, while the S&P/TSX Capped Energy index of Canadian firms returned-16.36%.
In an interview at the money management firm's Montreal office, Roland Lescure, executive vice president and chief investment officer, and Macky Tall, senior vice president, infrastructure and private equity, both said the Caisse's focus on energy distribution has proven to be a successful buffer against oil-price declines.