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Infrastructure leads OMERS’ private investments last year

Allocation to infrastructure increased to 17 % in 2016 as the Canadian pension’s total net asset topped C$85bn.

Infrastructure became the Ontario Municipal Employees Retirement System’s largest private asset class last year, the Canadian pension reported on Friday.

In 2016, the C$85 billion ($64.86 billion; €61.33 billion) pension increased its infrastructure allocation from 16.4 percent to 17 percent of its portfolio. Its investments in private equity fell from 14.7 percent to 13.6 percent, and real estate holdings dropped from 16.9 percent to 14.6 percent.

Overall, its total net assets increased by C$8.1 billion to a total C$85.2 billion. OMERS’ total net asset returns rose by 3.6 percent to 10.3 percent.

Its most recent infrastructure transaction came last September when OMERS joined a group of Australian and North American investors to acquire a 50-year lease for the Port of Melbourne for more than A$9.7 billion ($7.31 billion; €6.55 billion). The consortium also included Brisbane-headquartered QIC, New York-based Global Infrastructure Partners and Australia’s Future Fund.

OMERS’ growth in infrastructure comes at a time when the Canadian government is planning the launch of a national infrastructure bank.

The lender was proposed in the government’s Fall Economic Statement last year as a way to “make investments in revenue-generating infrastructure projects and plans that continue to long-term sustainability of infrastructure across the country”. The proposal calls for the federal government to invest C$35 billion in the bank, a sum meant to help mobilise private investors to participate in the development of projects.

Earlier this month, Jim Leech, former head of another Canadian pension, Ontario Teachers’ Pension Plan, was tapped to help launch the infrastructure bank.