The $4.9 Billion Railroad Being Built by a Pension Fund

Caisse de Depot et Placement du Quebec, Canada’s second-biggest pension fund, has developed a unique model for infrastructure investing in its home province of Quebec. The Caisse has struck a deal with the local transit authority in Montreal to develop a 67-kilometer (42-mile) rapid transit network, known as the Réseau express métropolitain (REM), in conjunction with funds from the provincial and federal governments. It’s a unique project for the pension fund, which usually invests in mature infrastructure assets. This time around, the Caisse is building the rail network from the ground up. The whole project is expected to cost C$6.32 billion ($4.88 billion), with the first trains scheduled to run in early 2021. Michael Sabia, chief executive officer of the Caisse, discusses the project, the bumps it’s already encountered, and how the pension fund plans to mimic REM in other jurisdictions, including in the U.S.

Scott Deveau: How does this investment differ from the other infrastructure investments the Caisse has made?