CPPIB, Wolf Infrastructure form midstream JV

The Toronto-based pension and the energy infrastructure-focused firm aim to invest about $750m in Western Canada's midstream sector.

The Canada Pension Plan’s (CPP) investment manager is partnering with Calgary-based Wolf Infrastructure to establish a joint venture that will focus on investing in the midstream energy sector in Western Canada, the two firms said in a statement.

CPP's investment board, CPPIB, will provide the funding, while Wolf will identify and evaluate opportunities for the new entity to acquire, expand and develop natural gas, oil and natural gas liquids (NGLs) processing facilities, gathering systems, pipelines, hydrocarbon storage and terminals.

The vehicle’s goal is to initially invest more than C$1 billion (€668.3 million; $746.3 million) in the sector, CPPIB and Wolf said without providing further detail.

“As a long-term investor, we see midstream as an attractive sector given the significant investment required in Western Canada to support growth in natural gas and natural gas liquids production in new areas,” commented Avik Dey, managing director and head of natural resources at CPPIB. “We are excited to work with Wolf management, who are highly experienced operators in the midstream sector with a proven track record.”

Wolf’s management team – Gord Salahor, Bob Pritchard, David Schmunk, Ken Temple and Warren Peers – was the executive team of Taylor NGL LP from 2001 until 2008. Before launching Wolf, the same team led Mistral Energy, a private company based in Calgary, dedicated to building, owning, and operating energy infrastructure. According to Wolf’s website, the team has divested Mistral Energy’s assets.

In addition to natural resources, CPPIB’s private markets portfolio includes private equity, infrastructure and credit. The investment manager, which invests funds not needed by CPP, also invests in public equities, real estate and fixed-income instruments.

As of June 30, 2015, total assets under management stood at C$268.6 billion with infrastructure representing 5.6 percent of the total portfolio.