Japan, Canada pension fund consortium makes first investment

The group operates under the banner of the Global Strategic Investment Alliance (GSIA) and held a first close of $7.5 billion on its infrastructure fund in April last year. The overall target is $20 billion, which would make it the largest infrastructure vehicle in the world.

The debut transaction will see GSIA buy one third of a stake in MCV previously held by OMERS though its Borealis Infrastructure arm. This was acquired last year from EQT Partners and Fortistar, a New York-based firm that invests in power generation operations. Borealis also originates and manages investments for GSIA.

MCV is the largest natural gas fired, combined cycle cogeneration plant in the US - which means it puts excess thermal energy produced during power generation to use.

It is capable of producing up to 1,633 megawatts of electricity and is one of the core infrastructure assets in Michigan, providing electricity to Consumers Energy and steam and electricity to Dow Chemical based on long term contracts.

"We're very pleased to have completed our first transaction with our GSIA partners, and look forward to announcing our next acquisition in the near future," said Jacques Demers, president and CEO of OMERS Strategic Investments, in a statement.

OMERS has so far contributed $5 billion to the GISA fund, with $2.5 billion coming from Mitsubishi Corp, Japan's Pension Fund Association, Japan Bank for International Cooperation and Mizuho Bank.

The fund is unique in that it has bypassed the traditional asset manager approach whereby funds are sponsored by private equity firms or investment banks. In this sense, it represents another move by LPs to become more proactive investors.

Canada's pension funds are widely seen as being at the forefront with Canada Pension Plan Investment Board (CPPIB) making investments in infrastructure, and Ontario Teachers' Pension Plan committing capital directly to corporate assets rather than go through a third-party fund manager.

OMERS, which has more than $55.1 billion in assets under management, has made a number of infrastructure investments in North America and Europe via Borealis.

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• Topics
• North America
• North Asia
• Buyouts
• LPs
• Infrastructure
• Ontario Municipal Employees Retirement Scheme
• mitsubishi
• EQT Partners
• Japan
• Canada
• Infrastructure
• LPs