The USD 10bn Chicago Teachers’ Pension Fund (CTPF) approved a USD 25m commitment to Brookfield Infrastructure Fund IV as it tries to maintain exposure to infrastructure ahead of realizing its investments in Macquarie’s funds, according to board meeting minutes from February.
Macquarie represents 40% of its current infrastructure exposure considering funded and unfunded commitments for CTPF, and that this concentration will decline as the existing funds exit their investments, said investment consultant Callan Associates, according to meeting materials.
CTPF previously committed USD 90m in Macquarie Infrastructure Partners II (MIP II) and USD 42.5m (EUR 39.13m) in Macquarie European Infrastructure Fund III (MEIF III). Both funds have a 10-year fund length. MIP II has two optional two-year extensions, while MEIF III has two one-year extensions.
Both Macquarie investments were made in 2008, and based on manager guidance, it is likely CTPF will receive significant distributions in the next two to three years from those funds, Callan Associates said.
MIP II has sold its stake in US utility Puget Energy and Global Tower Partners. It still has stakes in the Broadrock Landfill Gas-to-Energy Portfolio, the Leaf River Energy Center, the Midtown Tunnel (Elizabeth River Tunnels Project), and the WCA Waste Corporation, according to Inframation Deals.
The 2009 vintage MEIF III has sold its stakes in Copenhagen Airports and TSO Gas (subsequently renamed Thyssengas). It still has stakes in Macquarie Airports and Ceske Radiokomunikace, according to Inframation Deals.
The pension plan’s 2019 pacing study recommendation is to invest up to USD 50m to private infrastructure and to maintain exposure to the infrastructure investment market, according to meeting materials.
The fund has a previous USD 50m commitment in Brookfield Infrastructure Fund III.
The fund has a target of 2% for infrastructure and a range of 0% to 4%. Actual allocation stands at 2.4% as of December 2018.