TIAA partners with ACS in $665m joint venture

The US asset manager will acquire a stake in Québec’s Autoroute 30, a $1.2bn project inaugurated in December 2012.

The Teachers Insurance and Annuity Association of America (TIAA) and subsidiaries of Spanish infrastructure developer ACS have launched a new $665 million joint venture that will invest in transportation and social infrastructure projects across North America.

“The joint venture establishes a framework between the two companies to source investments, provide capital throughout the construction, permanent operations and maintenance phases, and manage certain existing assets under joint ownership,” said Marietta Moshiashvilli, managing director and group head of energy and infrastructure at TIAA.

The two companies did not disclose the equity split in the joint venture. A spokesperson for TIAA-CREF referred Infrastructure Investor to ACS. The company did not respond to a request for comment.

The first transaction under the agreement will see TIAA acquire 75 percent of ACS’s 50 percent stake in Nouvelle Autoroute 30, the concession company which manages Montreal’s A30 highway under a 30-year agreement. However, ACS will continue to manage 50 percent of the concessionaire, ACS board member and secretary general José Luis del Valle Perez said in a written statement. Spain’s Acciona will continue to own the remaining 50 percent of the concession company.

Acciona and ACS developed the C$1.58 billion (€1.12 billion; $1.19 billion) billion project, which included constructing a 42-kilometre toll road, comprising two lanes each way, overpasses, underpasses, a 72-metre tunnel under the Soulanges Canal and two bridges. The project, which earned both companies a Gold Award from the Canadian Council for Public-Private Partnerships in 2008, was inaugurated in December 2012.

The two companies have collaborated once before. In October 2011, TIAA acquired a 50 percent stake in Florida's I-595 road concession from ACS for €588 million. Florida's I-95 was the first infrastructure deal in the US backed by availability payments. It will be in private hands until 2044.

“The arrangement leverages the development expertise of ACS with TIAA-CREF Asset Management’s broad capabilities in alternative investments, including a well-established competency as a qualified and innovative infrastructure equity investor,” Moshiashvilli added, referring to the new joint venture.

With $639 billion in assets under management as of June 30, 2015, TIAA-CREF is one of the largest asset managers in the world. In addition to infrastructure, the organisation invests across a wide range of traditional and alternative asset classes including fixed income, real estate and agriculture.