CPPIB to increase investments in ‘attractive’ Aussie infra

The C$155bn Canadian pension, impressed with the long-term horizon offered by infrastructure in Australia, is planning to increase its investment in the asset class, CPPIB’s chief executive said.

Infrastructure in Australia is “highly attractive” to the Canada Pension Plan Investment Board (CPPIB), according to David Denison, chief executive officer of the C$155 billion (€118 billion; $155 billion) Canadian pension.

Denison, speaking in front of the Canadian-Australian Chamber of Commerce in Sydney, Australia, praised “long duration infrastructure” investment Down Under and hailed the continent as a “successful example of how to execute the necessary policy framework” for “privatising infrastructure”.

Citing Australia as rare in its embrace of “this private ownership of infrastructure model,” Denison declared that CPPIB would like to “grow” its “presence here,” pointing out the fund has invested half of its C$10 billion Asia-Pacific allocation to Australia. He went on to characterise CPPIB as a “major” infrastructure investor in Australia, calling attention to the “significant” stake the fund owns in the Westlink M7 toll road in Sydney.

While “private ownership of infrastructure” is an “especially important policy decision” that prompted CPPIB to invest in Australia, Denison expressed concern about the general openness of federal governments in the region to outside investment. The fund, Denison said, had tried to purchase neighbouring New Zealand’s Auckland Airport, but was “turned down at the political level,” despite shareholder approval.

“Long-horizon investing,” holding an asset, like infrastructure, for an indefinite period of time, should be a priority for a pension fund, Denison said, noting that private equity, not to mention hedge fund and mutual fund investing, “simply do not envision long-term investing”.

Meanwhile, the 17 million member pension fund is forecast to reach C$300 billion in the next decade, hitting C$500 billion by 2031, according to Denison.