Ontario Teachers’ Pension Plan, which is selling its stake in North America’s Express Pipeline System, remains interested in investing in energy infrastructure, including assets that may help break a bottleneck that’s choking the flow of oil from Alberta.
“That’s a real issue and certainly, from an infrastructure perspective, could be of interest to us,” Chief Executive Officer Jim Leech said yesterday in an interview in Davos. “Generally speaking, pipelines are of interest.”
Teachers’, the country’s third-biggest pension fund manager with C$117.1 billion ($116.7 billion) of assets, agreed last month to sell its one-third stake in Express Pipeline System, which transports crude oil from Alberta to Wyoming and Illinois, to Spectra Energy Corp. (SE) for about $430 million. Partners Kinder Morgan Energy Partners and Ontario Municipal Employees Retirement System are also selling their stakes to Spectra in the $1.49 billion deal.
Pension funds generally could be interested in such energy infrastructure investments, Leech said. He is also optimistic about using rail to help get oil out of Alberta.
“I understand there are a number of proposals put forward to use rail as an alternative transport and some very credible people saying it’s very feasible,” Leech, 65, said.
Teachers’ is seeking investments in areas including consumer-products companies, which Leech said are “high on the list”, and telecommunications. Geographically, the Toronto- based fund manager has invested in northern Europe and is getting more interested in doing private-equity deals in Chile, Brazil and Colombia, Leech said. The U.S. market may also provide opportunities, he said.
“We’re picking up hints that the U.S. market is coming back,” Leech said. “There are some nice early signs -- the housing market is starting to drift upward, you can see that in lumber prices in Canada, so that’s telling you that something is going on there.”