Global infra platform announces $7.5bn first close

OMERS, the Canadian pension plan headed by Michael Nobrega (pictured), has reached an important milestone for the Global Strategic Investment Alliance, which it launched in 2009. OMERS, which has committed $5bn to the platform, is joined in the first close by Japan’s PFA and Mitsubishi Corp.

The Ontario Municipal Employees’ Retirement System (OMERS) has announced the first close of its Global Strategic Investment Alliance (GSIA) on $7.5 billion. The GSIA is a platform allowing institutional investors to pool resources to pursue large-scale infrastructure investment opportunities, mainly in North America and Western Europe. It is thought to be targeting assets with a value of at least $2 billion. 

OMERS, which has committed $5 billion to the fund, is joined in the first closing by Japanese institutions: Pension Fund Association (PFA), a pension fund manager, which has committed $1.25 billion; and the Japan Infrastructure Investment Partners LP, a consortium led by trading house Mitsubishi Corporation, which has also committed $1.25 billion. A Reuters report indicated that the Mitsubishi consortium includes Mizuho Corporate Bank and Japan Bank for International Cooperation.

The GSIA, which was launched to much fanfare towards the end of 2009, set an initial fundraising target of $20 billion. In a statement accompanying the announcement of the first close, OMERS Strategic Investments president and chief executive Jacques Demers said: “Based upon the feedback in the market, we anticipate welcoming a number of other forward-thinking pension plans and other long-term institutional investors from around the world into the GSIA over the next 12 to 18 months thereby bringing significant additional (ie. billion dollar plus) commitments to the program.”

The statement said that the goal of the GSIA was to bring together “like-minded long-term institutional investors in North America, Europe, Asia Pacific and the Middle East to work together”.  All investments made by the GSIA will be managed by Borealis Infrastructure, the infrastructure investment arm of OMERS. Borealis, alongside Ontario Teachers Pension Plan, acquired the UK’s high-speed rail concession between London and the Channel Tunnel in a $3.4 billion deal in November 2010.

The GSIA was the brainchild of OMERS president and CEO Michael Nobrega who, at the time of the launch, said: “We have found from empirical evidence that large-scale investments tend to have a higher degree of return than we’ve found with smaller assets in [infrastructure and real estate].”

He added that the GSIA platform would be inexpensive, saying “there will be no negotiation fees, there will be no financing fees, there will be no acquisition fees, there will be no fees on committed capital. All that we will charge the system is a fee structure that will pay…approximately 50 basis points to manage the assets”.