Canadian pension funds keeping eyes on Aussie infra
Wednesday, 20 January 2016 11:39am

Port of Brisbane has been listed as one of the more recent success stories among alternative investments by the top 10 Canadian public pension funds.

A study by The Boston Consulting Group (BCG) last month found that Canada's 10 largest public pension funds have 32% of their investments in alternative assets.

The study also said Canada's "Top 10" has tripled their assets under management since 2003, now managing more than $1.1 trillion and equivalent to about 45% of the country's GDP.

The Canadian Top 10 remain prominent global players in the alternative asset management industry, with seven funds named among the top 30 global infrastructure investors and five listed as part of the top 30 global real estate investors.

"While each fund's strategy is designed to meet its unique mandate, the Top 10 similarly focus on creating well-diversified portfolios that align with the funds' relatively long-term payout profiles," a BCG statement said.

"Enabled by their scale, 32% of the Top 10's investments are in alternative asset classes such as infrastructure, private equity, and real estate in Canada and abroad.

"Globally, the Top Ten have invested in such assets as ING Life Korea; Globalvia, a portfolio of infrastructure assets in Europe and Latam; Port of Brisbane, one of Australia's fastest growing container ports; Open Grid Europe, a gas transmission network operator responsible for approximately 70% of Germany's total national shipping volume; and, Camelot Group, the UK's national lottery operator."

An example is Canada's fourth largest public pension fund, the Public Sector Pension Investment Board (PSP Investments), which announced in its 2015 annual report that Australia and New Zealand continues to be a focus area in its real estate portfolio in developed markets. Developed Asia and Australia accounts for 9.8% of PSP's real estate portfolio.

In terms of infrastructure, Australia makes up 8.3% of that PSP investment portfolio. Meanwhile in its natural resources portfolio PSP said it had formed a platform to further invest in Australian cattle assets by committing to a joint-venture partnership, widely reported as a deal with Hewitt Cattle Australia.

In fiscal year 2015, PSP Investments directly engaged with 362 public companies held in its investment portfolios, of which 25% were from the Asia-Pacific region including Australia.

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