Ontario Teachers’ Pension Plan to develop partnerships for greenfield investments

18 October 2017 - 12:00 am UTC

The Ontario Teachers’ Pension Plan (OTPP) is in the process of forging partnerships with construction companies and developers to tap greenfield project opportunities.

Ontario Teachers’ Pension Plan’s Senior Vice-President, Andrew Claerhout (pictured) told the FT Singapore Infrastructure Finance Summit on Monday (17 October) that the pension fund wants to create deal flow it would not otherwise see, such as being involved in the creation of greenfield assets.

The fund manager is active in Australia, the Americas and Western Europe and sees “longer-term promise” in Asia, he said.

OTPP created a new Ontario-based team for direct investments in greenfield infrastructure and renewable energy projects at the start of this year.

It plans to tap its partners’ skills to get into “truly greenfield” projects, Claerhout said.

In the meantime, OTPP is looking at growing existing assets by introducing greenfield elements to them, such as expansion projects. This “khaki” strategy combines greenfield and brownfield through “backing a management team and business you know and putting more capital to work to expand it,” Claerhout said.

It’s a route the Canada Pension Plan Investment Board (CPPIB) has explored. Speaking at the same conference, CPPIB’s Asia head Suyi Kim said going into greenfield is part of a struggle to expand its investment universe. CPPIB’s strategy is to set up a platform – such as a joint venture or a consortium – and use existing portfolio companies to expand greenfield projects.

Kim said the pension fund has invested in greenfield toll road projects in India through its joint venture with local engineering and construction company Larsen & Toubro.

The key challenge is getting scalable infrastructure opportunities, particularly in Asia, Kim explained.

OTPP’s Claerhout added that in Asia the pension manager will first find partners to work alongside – “people who have true appreciation for the complexities of these markets and can help us, as the new money to the region, get the right opportunities”. In time “we can be more of a direct active investor in this region”

Ontario Teachers' Pension Plan