CPPIB, Ontario Teachers’ increase positions in Mexican infrastructure

The Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan are increasing their positions in Mexican infrastructure firm Impulsora del Desarrollo y el Empleo en América Latina.

IDEAL has 18 concessions throughout Mexico, including 13 toll roads, three logistics terminals and two wastewater treatment plants, as well as an electronic toll collection service business and an operations business. The CPPIB and Ontario Teachers’ had previously partnered with IDEAL on two toll roads.

In the new agreement, the pension funds committed to launch a tender offer on the Mexican stock exchange for shares in IDEAL at MXN$43.96, subject to certain conditions. If the tender is successful, the CPPIB will take a 23.7 per cent interest in IDEAL and the Ontario Teachers’ will take 16.3 per cent. IDEAL’s existing majority shareholders will retain their position.

Read: CPPIB and Teachers’ invest in Mexican toll road

In addition, the partnership will form an infrastructure investment trust, which will be managed by an IDEAL subsidiary and funded by certain shareholders of IDEAL and the two pension funds. The trust will purchase partial stakes in four of IDEAL’s toll roads. Once it’s formed, the CPPIB and the Ontario Teachers’ will launch a secondary offering to reduce their ownership of the trust to minority positions and make room for other investors.

“This investment in IDEAL provides CPPIB with the valued opportunity to access a diversified portfolio of assets with stable cash flows, while also providing the opportunity for future growth through development opportunities in Mexico’s infrastructure sector,” said Scott Lawrence, managing director and head of infrastructure at the CPPIB, in a press release.

Dale Burgess, the Ontario Teachers’ senior managing director of infrastructure and natural resources, said the investment in IDEAL is an important addition to the fund’s infrastructure portfolio. “IDEAL is a leading Mexican infrastructure platform and provides Ontario Teachers’ new capabilities to further invest in projects in the region.”

Read: Ontario Teachers’ partners with Alphabet, Sidewalk Labs to launch infrastructure holding company

Ivanhoé Cambridge, the real estate arm of the Caisse de dépôt et placement du Québec, is making a €60 million investment in Spanish real estate investment trust Árima Real Estate.

Ivanhoé Cambridge is the company’s largest shareholder and contributed the funds as part of Árima’s €150 million euro capital-raising round.

Stanislas Henry, the firm’s head of strategic partnerships for Europe, will be appointed to Árima’s board of directors, audit and control committee and remuneration and appointments committee. Ivanhoé Cambridge will also participate in Árima’s investment committee.

“We are very pleased to invest in Árima to support its future growth,” said Karim Habra, Ivanhoé Cambridge’s head of Europe and Asia-Pacific, in a press release. “The management team has a strong track record of performance and has built, in a very short time, an impressive portfolio of high-quality, value-add properties and a promising development pipeline. Madrid’s office market is anticipating a sustained rental growth and we believe Árima is the right investment vehicle to take advantage of that cycle.”

The fundraising round will allow Árima to continue with its investment strategy of acquiring assets with added value potential, active portfolio management and investing in assets’ repositioning in order to maximize their occupation, quality and value.

Read: Caisse boosts stake in Indian solar producer, CPPIB in Brazilian real estate joint venture