CDPQ consolidates infra activities

The Canadian pension is moving all its infrastructure investment activities to a dedicated subsidiary as part of a broader restructuring.

La Caisse de dépôt et placement du Québec (CDPQ) is consolidating its infrastructure investment activities and operations under CDPQ Infra, a subsidiary the Canadian pension fund established in July 2015.

Through the reshuffle, La Caisse aims to boost its investments in the sector and build its operational expertise as an owner-operator of major infrastructure projects in Québec and elsewhere, according to a statement.

Macky Tall, who was named president and chief executive of CDPQ Infra when it was launched, will head the subsidiary. The reorganisation brings a change to Tall’s job title from senior vice president for infrastructure to executive vice president of La Caisse. He also becomes a member of the pension’s executive and investment-risk committees.

Tall, who previously reported to Andreas Beroutsos, executive vice president for private equity and infrastructure at the pension, will now report to Michael Sabia, president and chief executive.

Although the changes come just a few days since La Caisse announced Beroutsos' resignation, they are not related to his departure, a spokesperson told Infrastructure Investor.

While Beroutsos’ decision to step down – of which he informed the pension fund a few weeks ago – was taken into consideration, La Caisse had been working on the organisational restructuring for several months, the spokesperson said.

CDPQ Infra was established in order to help La Caisse grow its infrastructure portfolio. It is based at La Caisse's Montreal headquarters.

“The focus of the subsidiary will initially be to staff it with the complementary expertise we don’t have within the team today to be able to undertake a project from inception to design, development, construction and operation,” Tall told Infrastructure Investorlast year, a few months before the launch.

“The subsidiary is going to be focused on being able to carry execution of these projects and will work very closely with our existing infrastructure team, which will bring the sector expertise, the transaction expertise, the commercial and transaction structuring expertise. It will be complemented by that operational and technical skill, project management skill, which we will set up in the subsidiary.”

The first two projects CDPQ Infra has taken on are a public transit system on the new Champlain Bridge and a transport network linking downtown Montréal to the Montréal-Trudeau International Airport and West Island, which combined are worth an estimated C$5 billion ($3.9 billion; €3.5 billion). They are the first projects identified by La Caisse and the government of Québec as part of an agreement reached in January 2015, whereby the Canadian pension fund, through CDPQ Infra, will be responsible for the planning, financing, development and operation of projects that the government identifies as priorities and that La Caisse deems appropriate for its risk profile.

Other changes La Caisse announced this week include the consolidation of its investments in public and private companies, with chief investment officer Roland Lescure leading the initiative while retaining responsibility for fixed-income investments. According to the statement, the team dedicated to private equity outside Québec will now report to Lescure.

The pension fund has also created a new division, Depositors and Total Portfolio Construction, in order to build its portfolio with a broader horizon, have a more integrated approach to managing the asset allocation process and enhance its advisory services to depositors, the institution said. Jean Michel, whom La Caisse appointed as executive vice president for advisory services to depositors and strategic analysis in March, will head the unit.

Based in Montréal, La Caisse serves 32 depositors, most of which are public and private pension and insurance funds in the Canadian province. The pension fund invests across a range of asset classes including fixed income, equities, real estate and infrastructure. As of 31 December 2015, its assets under management totalled C$248 billion.