This content is from: Portfolio

CPPIB, AustralianSuper Team Up on Infrastructure

The two institutions — along with ADIA’s Tawreed and Transurban Group — will own a 51 percent stake in Australia’s WestConnex toll road.

A consortium of investors that includes the Canada Pension Plan Investment Board and AustralianSuper has won a mandate to invest in the WestConnex toll road project in Australia. 

The toll road is the largest infrastructure project in Australia and aims to connect Western Sydney and South Western Sydney with the city, port, and airport, according to CPPIB. The project will also ease congestion and open up public transit and bike lanes in Sydney, its website showed. 

CPPIB, along with Australia’s largest retirement fund, AustralianSuper; Transurban Group, an Australian and North American toll road developer; and Tawreed, a subsidiary of the Abu Dhabi Investment Authority, make up the Sydney Transport Partners consortium. CPPIB and AustralianSuper announced that it had won the investment mandate Thursday. 

“WestConnex is a vital infrastructure development serving one of the fastest population and economic growth regions in Australia,” said Scott Lawrence, managing director and head of infrastructure at CPPIB, in a statement. 

The consortium will own a 51 percent stake in WestConnex, which represents A$9.26 billion ($6.69 billion) of total proceeds to the State of New South Wales for that stake, according to CPPIB’s announcement. 

Of that investment, CPPIB will own 20.5 percent. Its equity investment will worth A$1.7 billion at closing, a CPPIB spokesperson said via email. It’s unclear how much the other investors will own. 

AustralianSuper and a spokesperson for Tarweed could not be reached for comment. 

Appetite for infrastructure investments like this has been strong, according to Preqin. A report published August 16 showed that the asset class secured $25 billion during the second quarter of 2018 — a high since the first quarter of 2017.

[II Deep Dive: The Rise of Infrastructure Mega Funds]

CPPIB has been investing quite a bit of money in Australian markets, and particularly in infrastructure. According to its announcement, the pension fund has sunk C$11 billion ($8.41 billion) into the country. “Australia is an important investment market for CPPIB,” said Suyi Kim, senior managing director and head of Asia Pacific at CPPIB, in a statement. “We are a significant, long-term investor in Australia with investments in a wide range of assets across the country.”

The fund holds a 25 percent stake in the NorthConnex tunnel project, a 25 percent stake in the Westlink M7 toll road, a majority stake in communications infrastructure provider BAI Communications, and a 33 percent stake in rail freight operator Pacific National, according to its announcement. 

Similarly, AustralianSuper has an infrastructure worth more than A$13 billion. The fund has significant investments in NSW Ports and Transurban Queensland.

Related Content