Despite crisis, CPPIB ‘very interested’ in Europe

The Canada Pension Plan Investment Board is eager to capitalise on a promising infrastructure market in Europe. The C$155bn pension fund had earlier voiced its bullishness on Australia.

The Canada Pension Plan Investment Board (CPPIB) is keen on infrastructure in Europe – despite the continent being gripped by crisis, a top CPPIB official said.

The board, fund manager to the C$155 billion (€118 billion; $155 billion) Canada Pension Plan (CPP), is “very interested” in Eurozone infrastructure “right now,” according to Mark Wiseman, CPPIB executive vice president.

Wiseman, in a Bloomberg Canada Economic Summit panel discussion, went on to call CPPIB “quite concerned” with Europe generally, where a continuing sovereign debt crisis has exacerbated economic and socio-political risk.

His caution is consistent with his previous admission, made before the Milken Institute Global Conference on April 30, that CPPIB would shun investing in government debt in Europe.

Instead, the board would opt to purchase a “hard asset,” like a gas distribution network in Germany, Wiseman said, referring to its current bid for Open Grid Europe, a gas transmission company owned by E.ON.

CPPIB's last European infrastructure investment came last year, when it bought a 24 percent stake in Gassled, a Norwegian natural gas pipeline venture, as part of a consortium in a $3.2 billion transaction.

In voicing a positive outlook on infrastructure in Europe, Wiseman echoed CPPIB chief executive officer David Denison, who earlier offered a similarly optimistic prognostication on the asset class in Australia.

Denison in February characterised infrastructure in Australia as “highly attractive” while speaking in front of the Canadian-Australian Chamber of Commerce in Sydney.

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, and noting the board had a “significant” stake in the Westlink M7 toll road in Sydney.

Infrastructure, like real estate, is considered a hedge against inflation by CPPIB. The board has allocated $8.6 billion, or 5.6 percent of its capital, to infrastructure.

Wiseman, meanwhile, will become chief executive in June, replacing Denison, who is retiring.