Canada’s largest pension fund would join a consortium of other institutional investors and fund managers to purchase GIP’s 42 percent stake in Gatwick, the source said. Analysts estimate Gatwick could be worth over £7 billion ($9.08 billion; €7.92 billion), putting GIP’s stake at around £3 billion.
GIP acquired the entire airport in 2009 through a £1.5 billion investment from its first fund, which raised $5.64 billion and is nearing the point where the firm will divest the fund’s portfolio. Since then, GIP has sold down its position and brought in investors including the Abu Dhabi Investment Authority, the California Public Employees’ Retirement System, the Future Fund of Australia and the National Pension Service of Korea.
Gatwick is London’s second-largest airport and the UK’s second-busiest. The airport has experienced steady annual growth since GIP’s investment, though it lost a government bid to build a second runway in 2013. Last week, Gatwick chief executive Stewart Wingate announced the airport is exploring ways to increase flight capacity by using a standby runway more regularly, potentially boosting the asset’s value.
Many investors consider airports coveted infrastructure assets due to steady, GDP-linked cashflows and multiple revenue streams. Scott Lawrence, head of CPPIB’s infrastructure programme, told Infrastructure Investor in a keynote interview last June, that airports top the list of assets he’s interested in to grow the pension’s infrastructure portfolio from C$28.6 billion ($21.9 billion; €19.1 billion) to at least C$40 billion within five years.
CPPIB, whose total AUM stood at C$356.1 billion in March, has yet to invest in an airport. In 2008, the pension attempted to buy a 40 percent stake in New Zealand’s Auckland International Airport, but the deal ultimately fell apart.
CPPIB declined to comment for this story.