Quebec Pension Will Own and Finance New Public Transportation Projects

public transit

Canada’s second largest pension fund has agreed to take over Quebec’s new public transit projects.

Under an agreement reached between the Caisse de dépôt et placement du Québec and the Quebec government, the pension fund will finance and own the province’s new public transit projects.

More from the Montreal Gazette:

The Caisse de dépôt et placement du Québec and the Couillard government will unveil Tuesday an agreement that will see the pension fund take over financing and ownership of new public transit projects in the province, according to a published report.

Quoting sources familiar with the new deal, The Globe and Mail reported Monday night that the Caisse will assume ownership over new transit assets along with the responsibility for building them. It will become project owner for new transit projects. Sources described the arrangement as a “new way of financing and running public transportation infrastructure,” essentially privatizing the plan for new public transportation projects but with an established investor.

Infrastructure “is not government-owned, directly or indirectly,” the newspaper quoted one person close to the situation as saying. “It will be run like a private business.”

The first two projects have already been revealed. From CBC.ca:

The first two projects are a light-rail transit system on the new Champlain Bridge in Montreal and the Train de l’Ouest to improve commuter train service to the West Island and Montreal’s Trudeau International Airport.

The Caisse, which manages public pension plans in Quebec, is aiming to complete the projects, worth $5 billion, before the end of 2020.

Other projects proposed by the government would be added and financed by equity investment and long-term debt.

The Caisse de dépôt et placement du Québec manages $214 billion in assets and is Canada’s second largest pension fund.

 

Photo by  Claire Brownlow via Flickr CC License

Quebec Pension Part of Investor Group Buying PetSmart

Petsmart

Caisse de Depot et Placement du Quebec, the entity that manages Quebec’s public pension plans, is part of the consortium of investors that agreed to buy PetSmart over the weekend.

Details from the New York Times:

PetSmart agreed on Sunday to sell itself to a group led by the investment firm BC Partners for about $8.7 billion, months after the retailer came under pressure from two hedge funds.

[…]

PetSmart has long been seen as a good target for private equity firms, given its relatively strong cash flow and low debt. In a leveraged buyout, private equity firms generally finance the majority of the purchase price with borrowed money.

PetSmart operates more than 1,300 pet stores in the United States, Canada and Puerto Rico.

“The question is, ‘Why haven’t there been more people interested in PetSmart?’” said Raymond Svider, a managing partner of BC Partners. “The category of pet products has been growing in the U.S. and abroad consistently for a number of years.”

The retailer disclosed in August that it was exploring a sale after Jana Partners, the big activist investor, emerged as a major shareholder. The pet supply company had already been weighing its strategic options as its sales had begun to slow.

By that time, Jana and another firm, Longview Asset Management, had begun agitating for a sale of the company. Jana now has a stake of 9.75 percent.

The monthslong auction of PetSmart eventually drew the interest of some of the biggest private equity firms, including Apollo Global Management, Kohlberg Kravis Roberts and Clayton Dubilier & Rice.

Ultimately, BC Partners, a European-American firm with about $15 billion under management, and some of its own investors emerged as the winner. (Longview, which owns a stake of roughly 9 percent in PetSmart, will roll over about a third of its holdings into the newly private retailer, cashing out the rest of its shares.)

Under the deal’s terms, the consortium will pay about $83 a share in cash, about 6.8 percent higher than PetSmart’s closing price on Friday and about 39 percent higher than the closing price on July 2, the day before Jana emerged as a shareholder.

Caisse de Depot et Placement du Quebec manages $214 billion in assets.

 

Photo by  Mike Mozart via Flickr CC License

Canada Pension To Invest Up To $500 Million In Mexico Real Estate Projects

Canada blank mapCaisse de depot et placement du Quebec, the entity that manages Quebec’s public pension assets, has unveiled plans to invest up to $500 million in residential and urban housing projects in Mexico.

First up: a $100 million investment in two yet-unbuilt condo complexes.

From the Yucatan Times:

Ivanhoe Cambridge, the real estate unit of the Caisse de depot et placement du Quebec, a public pension funds manager, is teaming up with United States-based Black Creek Group with an investment of up to US $500 million.

Its first project, reported to be its first foray into Mexico, will be a residential development in the borough of Cuajimalpa in Mexico City consisting of two residential condominium buildings with 479 units in total.

It will invest $100 million in the 46,500-square-meter project.

Black Creek is a private-equity firm and real estate company with 17 years’ experience in Mexico in building infrastructure, retail and residential developments, targeting low and middle-income Mexican families. Another market is second homes for American and Canadian baby-boomers.

“With this investment, Ivanhoe Cambridge is setting a major foothold in Mexico, which will provide excellent access to opportunities, including long-term investments in a portfolio of high-quality assets,” said Rita-Rose Gagne, an executive vice-president with Ivanhoe Cambridge.

“The investment is part of Ivanhoe Cambridge’s strategy of developing a long-term, active presence in growth markets. The economic growth and demographic trends in Mexico are producing a large and sustained local demand for commercial and residential real estate.”

Caisse de depot et placement du Quebec manages around $180 billion (USD) of assets.

Video: CFO of Canada’s 2nd Largest Pension Asset Manager Talks Investment Strategy

 

Here’s a 24-minute talk with Maarika Paul, chief financial officer at Caisse de Depot et Placement du Québec, Canada’s second-largest pension fund.

Paul touches on infrastructure, e-commerce and real estate investing, as well as investing in Europe.

The video was taken at the Bloomberg Canadian Fixed Income Conference in New York.


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