La Caisse launches new infra subsidiary

Macky Tall, who is to head the new unit, says the initiative will allow the Canadian pension to go "beyond its traditional role" as a financial investor.

La Caisse de dépôt et placement du Québec has launched CDPQ Infra, an operational subsidiary that will execute major infrastructure projects in the Canadian province in accordance with an agreement the Canadian pension and the government of Québec struck in January.

The announcement comes just a few weeks after the National Assembly passed a new law allowing the implementation of the new business model.

Under the terms of the agreement, La Caisse, through its new subsidiary, will be responsible for the planning, financing, development and operation of projects that the government identifies as priorities and that La Caisse deems appropriate for its risk profile.

“We’re going to go beyond our traditional role of investing in infrastructure as a financial investor,” Macky Tall, senior vice president for infrastructure at La Caisse, told Infrastructure Investor in a previous interview. “In the past, we were active on the board, in the governance [of a portfolio company] as a shareholder but in this case it would actually be taking a majority position in some of these projects.”

Another objective of CDPQ Infra is to add the operational and technical expertise needed for this new role that La Caisse is assuming.

According to Thursday’s statement, Tall will serve as president and managing director of CDPQ Infra. Jean-Marc Arbaud will serve as deputy managing director and will work to form the teams required to run the new subsidiary.

Michael Sabia, La Caisse president and chief executive, will serve as chairman of CDPQ Infra’s five-member board, while Tall and Christian Dubé, executive vice president, Québec at La Caisse, will serve as board members. The other two board members will be announced in the coming months, La Caisse said. They will be international experts and will be appointed as external directors.

CDPQ Infra will now start the evaluation process of two projects identified as priorities since the agreement was announced. They are a public transit system on the new Champlain Bridge and a public transit system linking downtown Montréal to the Montréal-Trudeau International Airport and West Island with a total estimated cost of C$5 billion (€3.6 billion; $3.9 billion).

When the preliminary analyses and project definitions are completed, CDPQ Infra will also conduct ongoing consultations with the different stakeholders concerned, La Caisse said.

La Caisse serves 32 depositors, primarily public and private pension and insurance funds in Québec, with C$226 billion in total assets under management. The institution's infrastructure portfolio, which it has been building over the past 15 years, stands at C$10 billion, representing about four percent of its overall portfolio.