For the Ontario Teachers' Pension Plan, Toronto, infrastructure investing is nothing new.
The C$247.2 billion ($184.8 billion) fund has C$40 billion allocated to infrastructure and made its first direct investment in private infrastructure in 2000, Dale Burgess, OTPP's executive managing director of infrastructure and natural resources, said in an email.
OTPP's earlier investments were in airports and transportation infrastructure. "While that is still a key area of focus for us — we currently own five European airports — we have built a truly global and diverse portfolio," Mr. Burgess said. "More recently, we've further balanced our portfolio by focusing on utilities, electricity transmission and renewable energy infrastructure."
Today, the majority of the fund's infrastructure investments are direct investments made by its in-house team.
Although most of the fund's assets are operating businesses, OTPP is willing to invest earlier in the development stage, and last year entered a joint venture with Corio Generation to fund the development of offshore wind projects worldwide, Mr. Burgess said.
By 2050, OTPP plans to achieve net zero across its portfolio, which means renewables will play a major part.
In addition to its Corio Generation investment, in recent years OTPP has acquired Cubico Sustainable Investments, a renewable infrastructure company that it owns with Public Sector Pension Investment Board, Montreal, which had a total of C$230.5 billion in assets under management as of March 31, 2022; acquired nearly 50% of infrastructure firm Equis Development; and purchased a 25% stake in the electricity transmission network business of a SSEN Transmission, which transports electricity generated from renewable resources, including onshore and offshore wind and hydropower, from the north of Scotland to more than one-quarter of the land mass of the U.K.
"We intend to keep a diversified portfolio across different segments in infrastructure, although the mix may change over time to reflect market trends," Mr. Burgess said. "Emerging areas like climate and digital will be areas we may explore more over time."
Looking ahead, there remains "intense competition for infrastructure assets, so we need to think creatively about where and how we invest, and remain disciplined on our valuations," Mr. Burgess said. "We're also operating in an uncertain geopolitical environment, with numerous factors influencing how and where we invest in infrastructure."
Factors that influence how and where OTPP invests include the type and stability of legal system, receptiveness to foreign capital and availability of scaled infrastructure opportunities, a spokesman said in an email.
As of Dec. 31, OTPP's infrastructure portfolio was made up of 47% energy infrastructure, 39% transportation and logistics, 11% water and 3% other.
