Ontario Teachers' Pension Plan (Teachers') and the Public Sector Pension Investment Board (PSP Investments), two of Canada's largest pension funds, today announced an agreement with Banco Santander, S.A. (Santander) to jointly acquire a portfolio of renewable energy and water infrastructure assets. The assets, currently owned solely by Santander, will be transferred to a new company owned equally by all three parties.
The transaction, which is expected to close within the first half of 2015 subject to receipt of customary regulatory approvals, values the assets in excess of US$2.0 billion. Santander, PSP Investments and Teachers' intend to invest significant additional amounts in the new company over the next five years.
The portfolio includes wind, solar and water infrastructure assets located in seven countries that are operating or in development. The portfolio will be managed by an experienced team led by Marcos Sebares.
"We are excited about partnering with Santander and PSP Investments and look forward to supporting management in growing this company significantly in the coming years. This investment directly supports our focus on investing in platforms that provide access to development opportunities globally," said Andrew Claerhout, Senior Vice-President, Infrastructure at Teachers'.
"This investment fits well with our strategy of deploying capital in sizeable opportunities that offer long term revenues and growth potential along with solid partners. It also allows PSP Investments to continue to develop its portfolio of private energy assets while contributing to environmentally sustainable energy production," said Bruno Guilmette, Senior Vice-President, Infrastructure Investments at PSP Investments.
"Over the last seven years in Santander, the business has become one of the leading developers of renewables projects around the world, having invested over US$2 billion in renewable energy and water projects. A combination of Santander, which has consistently been voted the greenest bank in the world, and two investors, such as PSP Investments and Teachers', who have a long history of sustainable investing, marks the beginning of a new phase in the development of our company into one of the world's leading renewable energy investment companies. We have a strong balance sheet and long term investment strategy, with a mandate from shareholders to grow the new company over the next five years," said Marcos Sebares, CEO of the new entity.
Teachers' investment was led by its Infrastructure Group, which manages a global portfolio of C$11.7 billion of direct infrastructure investments, including water and wastewater, electricity distribution, gas distribution, airports, power generation, high-speed rail and port facilities.
PSP Investments' investment was led by its Infrastructure Group, which manages a global portfolio of C$6.0 billion of direct infrastructure investments, including power generation, airports, toll roads, port facilities, electricity and gas transmission, and water.
Santander's sale was led by its Asset & Capital Structuring (A&CS) team of 30 people specialized in infrastructure equity investments through its global footprint in Spain, Italy, UK, US, Brazil and Mexico. This team will manage the acquired portfolio and will lead investments in the new global renewable energy and water platform. Macquarie Capital acted as financial advisor to Santander.
