Caisse to double down on transport, renewables
LONDON Caisse de dépôt et placement du Québec plans to potentially double its allocation to infrastructure to as much as 15 per cent over the next four years.
In a world of low returns from traditional fixed income markets and concerns around the stability of stock market returns, institutional investors are increasingly looking to invest more in private markets such as infrastructure, among them Australian’s biggest scheme, Australiansuper.
The Caisse currently manages around $326 billion, of which about $22.8 billion, or seven per cent, is in infrastructure, including a 13-percent stake in Britain’s Heathrow Airport and 30 per cent in the Eurostar train system connecting London to Paris and Amsterdam.
“We have about 25 portfolio companies and seven offices for infrastructure. Right now, the plan is to grow the share of infrastructure in the overall mix of (the Caisse),” Emmanuel Jaclot, head of infrastructure at the Caisse told Reuters. “Transport is going to remain at between a third and a half of what we do, and the rest is going to be energy and renewables.”
The Caisse’s infrastructure business has already grown threefold over the last five years, with the fund attracted by the stable and predictable cash flows from assets such as ports, airports, railways, roads and power generation facilities.
With the Caisse seeking to decarbonize its investment portfolios and achieve net zero emissions by 2050, renewables is a particular focus, part of a broader global shift to cleaner energy in the battle against climate change.
Global renewable energy capacity is set to rise by 50 per cent in five years’ time, data from the International Energy Agency showed.
The Caisse holds stakes in big renewable energy companies in North America and India and also owns offshore wind farms in the United Kingdom.
The Canadian pension scheme also continues to invest in fossil fuels, however.
It just bought 90 per cent of TAG, a natural gas pipeline in Brazil, jointly with France’s Engie for US$8.6 billion.
As well as potential public project investments in renewables, the Caisse is also looking to invest more in transport, including in a potential third runway at Britain’s busiest airport Heathrow, Jaclot said.
It also plans to increase its investment in Eurostar, should a plan to merge it with Franco-belgian company Thalys go ahead, to 30 per cent of the merged entity.