Two of Canada’s biggest pension fund managers plan to spend a total of $1.35 billion cash to buy nearly half of a new partnership with a Mexican company that develops and operates infrastructure businesses.
Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan would own a combined 49% of the partnership and the rest would be owned by Ideal, one of the largest infrastructure companies in Latin America.
Ideal’s contribution to the partnership is its 99% equity interest in a company with the Arco Norte toll road, which passes by Mexico City and provides a link to major trade corridors.
The concession gives Autopista Arco Norte rights to the 223-kilometre toll road for the next 30 years.
CPPIB’s share of the new partnership would be 29% and OTPP’s share would be 20%, subject to approvals. They didn’t disclose how much cash each fund would pay for its share.
The pension fund managers said in a joint statement that the Arco Norte toll road fits a strategy of investments with stable cash flows to support retirement benefits.