Year-end spotlight: Pensions go direct

The Dallas Police and Fire Pension System’s successful partnership with Cintra on the $2bn North Tarrant Expressway project set a precedent for LPs’ direct infrastructure investment in the US market. Could it be the start of a new trend?

Cintra’s $2 billion North Tarrant Expressway project in Texas broke new ground in the US market:  it was the first time a US pension fund invested directly in an infrastructure project.

While Canadian pensions have been directly investing in infrastructure projects for years, the Dallas Police and Fire Pension System’s $42.7 million equity check for North Tarrant set a new precedent in the US. And it was a strong precedent, considering that North Tarrant is a complex greenfield project requiring the construction of managed lanes that are dynamically tolled, with high traffic volumes and a lengthy construction period.

That same partnership will again test the market in early 2010, when it seeks to reach financial close for the “New LBJ” project, another Texan road. If they are successful, it might just mark the beginning of a new trend.

For comprehensive information on LPs’ direct investment activity in 2009, consult the archived InfrastructureInvestor coverage listed on the right.