Canadian pension plans were the first to look at international infrastructure investments, says Krista Hill in Financial Post

Canada's Pension Plans in the Thick of U.K. Selloff

June 25, 2010

The talk of privatizing government-owned enterprises in Ontario has gone quiet. But the selloff continues in the United Kingdom, with Canadian pension plans bidding on several projects there.

For example, the British government announced earlier this week that it would sell a franchise to operate the high-speed rail line that links London with the Channel Tunnel. Media reports speculate that Ontario Teachers' Pension Plan or Borealis Infrastructure (a unit of OMERS) will bid. Goldman Sachs Infrastructure Partners and partners Infracapital (the infrastructure arm of Prudential unit M&G) are also expected to bid.

Canadian pension plans are becoming permanent fixtures in the U.K. auction circuit and "Canadian plans were the first to look at these investments internationally," says Krista Hill.

There is talk that Teachers is preparing a complete takeover of utility Northumbrian Water, of which it already owns 27%. Teachers recently boosted its stake in Bristol Airport from 35% to 49% and it is also finalizing a deal to buy Camelot Group, which runs the United Kingdom's National Lottery. OMERS has a long history in the U.K. market, having made investments in British Associated Ports and Scotia Gas Networks.

Despite years of experience, the U.K. market is "pretty competitive, and prices are not as attractive as they once were," says Michael Feldman.

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