Connor, Clark & Lunn Infrastructure and Graham Group have launched Connor, Clark & Lunn GVest Traditional Infrastructure LP, the two firms announced Monday.

The new limited partnership will enable individual investors to invest directly in basic infrastructure assets and participate in the anticipated surge in infrastructure spending, CC&L and Graham say.

The launch comes as Canada is set to make record investments in basic infrastructure such as roads, bridges, hospitals and water treatment plants to stimulate the economy.

“A massive amount of infrastructure spending needs to occur over the next decade and a significant proportion of it will have to be funded by the private sector, in part through public-private partnerships (P3)” says Matt O’Brien, president of Connor, Clark & Lunn Infrastructure. “Spending on this infrastructure will not only help our economy and communities, but also provide attractive investment opportunities.”

CC&L GVest Traditional Infrastructure LP brings together the asset management capabilities and infrastructure investment expertise of CC&L Financial Group, Canada’s second largest independent asset manager, with Graham, a leader in Canadian infrastructure construction and among the most active players in the P3 market. Graham has participated in over 40% of Canada’s largest P3 projects over the past three years, worth in excess of $3 billion.

“Global spending on infrastructure is expected to exceed $25 trillion over the next two decades,” says Tim Heavenor, president of Gracorp Capital Advisors, the infrastructure investment entity of Graham, Canada’s fifth largest construction company. “Canada could spend over $100 billion and still have a long way to go.”

The two firms note that civil and social infrastructure assets produce stable cash flow (yield) over long periods of time — frequently in excess of 20 years. Backed by long term contracts with the government, their payment streams do not vary with economic cycles or equity market returns — providing diversification, stability and a partial hedge against inflation.

“Until now, only large institutional investors and pension plans have been able to invest in this asset class,” says O’Brien. “Connor, Clark & Lunn GVest Traditional Infrastructure LP allows smaller institutional and high net worth investors to invest directly in the assets themselves.”

Connor, Clark & Lunn Infrastructure invests in North American infrastructure companies and projects with long lives, highly attractive risk-return characteristics and the potential to generate stable cash flow. CC&L Infrastructure is part of the Connor, Clark & Lunn Financial Group, a multi-boutique asset management company whose affiliate investment managers are responsible for the investment of approximately $30 billion on behalf of institutional, private and retail clients.

IE