Borealis co-investment platform raises $11.25bn

The infrastructure arm of OMERS has secured $2.5bn from Japan’s GPIF and DBJ for its Global Strategic Investment Alliance, which has a target of $20bn.

Ontario Municipal Employees Retirement System (OMERS) has sealed a co-investment agreement with Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, and the Development Bank of Japan (DBJ).

The arrangement sets out a plan under which both Asian investors will be offered participation in deals sourced and managed by OMERS through its various investment units.

Its first direct outcome will be a combined $2.5 billion commitment by GPIF and DBJ in the Global Strategic Investment Alliance (GSIA), an unlisted co-investment infrastructure fund set up by OMERS and a consortium of Japanese pension funds led by Mitsubishi Corporation. The vehicle is managed by Borealis Infrastructure, the infrastructure investment unit of the Canadian pension.

GPIF and DBJ’s capital pledges bring the total committed to GSIA to $11.25 billion – more than halfway towards its $20 billion target. The vehicle, which also counts the Japan Bank for International Cooperation, Mizuho Corporation and the Japan’s Pension Fund Association as limited partners, held a first close on $7.5 billion in April 2012.

The fund sealed its maiden deal last year, when its then-five shareholders bought a one-third stake in US power plant Midland Cogeneration Venture (MCV) from Borealis. It is understood that the size of the deal, undisclosed by the transacting parties, stood at around $1 billion.