Ontario Teachers’ Pension Plan (Ontario Teachers), one of the world’s biggest pension funds, has raised its stake in Sydney Desalination Plant, a non-rain dependent source of drinking water that supplies 15 per cent of Sydney’s needs.
In a statement, Ontario Teachers said it has partnered with Utilities Trust of Australia’s (UTA) Morrison & Co to acquire The Infrastructure Fund’s stake in SDP for an undisclosed amount. The deal raises the pension fund’s stake to 60 per cent and UTA’s to 40 per cent.
Ontario Teachers, UTA, and The Infrastructure Fund acquired SDP in 2012 through a 50-year lease from the Government of New South Wales. The deal was valued at A$2.3 billion ($1.4 billion).
UTA is an open-ended core infrastructure fund for institutional investors with over A$6 billion ($3.6 billion) in assets under management, while Morrison & Co manages multiple client mandates with total funds under management of A$15 billion ($9.1 billion) as of January 2020.
SDP and its pipelines were constructed by Sydney Water Corporation between 2007 and 2010. The plant ran continuously for two years, from 2010 to 2012, before being placed into long-term water security mode when it was sold to the consortium.
The plant was restarted in January 2019 due to falling dam levels and has been successfully supplying drinking water to Sydney from March 2019 to the present time.
“SDP has been a great investment for Ontario Teachers’, and this incremental acquisition demonstrates our commitment as long-term, dedicated, and constructive owners,” said Dale Burgess, senior managing director at the Canadian pension fund.
Ontario Teachers considers Australia as an important investment destination, particularly as it looks to expand its portfolio in the Asia-Pacific region in the coming years, Burgess added.
Ontario Teachers is Canada’s largest single-professional pension pan, with $201.4 billion in net assets at June 30, 2019. Its Asia-Pacific region office is located in Hong Kong while its Europe, Middle East & Africa region office is in London.
The fund holds a diverse global portfolio of assets, approximately 80 per cent of which is managed in-house.
Last year, Ontario Teachers was reported to be looking to expand its footprint in Asia by adding new offices in the region over the next five years, as it focuses on private markets, particularly real estates in the region. It also told Reuters in August that it was planning to hire extensively in Asia and Europe.