We began investing directly in infrastructure in 2001. Our infrastructure and timberland investments are designed to generate stable, long-term returns.
These two asset classes had a combined value of $10.8 billion at the end of 2011.
Our global portfolios include investments in airports, electrical power generation, water and natural gas distribution systems, container terminals, pipelines and a high-speed rail line. These types of assets have long economic lives and offer low-risk, reliable returns linked to inflation. They generate cash flows that will help pay pensions for decades.
Our timberland assets also correspond to the pension plan’s lengthy investment horizon. We invest solely in managed plantations that use proven techniques to grow, maintain, harvest and regenerate stock.
Most of our infrastructure and timberland assets are located outside Canada, so currency fluctuations can affect the portfolio values and investment returns.
Significant investments
Power Generation and Distribution
We jointly acquired Chilean electricity transmission and distribution company SAESA Group in 2008 and own 50% of the company. SAESA is the main provider of electricity in the rapidly growing southern regions of the country. We also own 50% of InterGen N.V., a global power generation company, and 50% of Northern Star Generation, which owns power plants in the United States.
Water and Wastewater Utilities
In 2007, we acquired significant or controlling interests in three water utilities in Chile representing approximately one-third of Chile’s regulated water and wastewater market: Empresa de Servicios Sanitarios del Bio-Bio S.A. (Essbio), Nuevosur S.A. (formerly Aguas Nuevo Sur Maule, S.A.), and Esval S.A. In 2011, we expanded our ownership stakes in Essbio and Esval and now own 90% and 94% of these companies respectively.
Gas Distribution
We were part of a consortium that purchased Scotia Gas Networks in 2005 and hold a 25% stake in the enterprise. It operates regional gas distribution networks in Scotland and southern England that deliver gas to 5.8 million customers.
Airports
We began investing in airports in 2002. We own, with a partner, a 48% stake in Birmingham International Airport, the third-largest airport in the U.K. outside of London, serving more than 8 million passengers annually. Our direct stake in Bristol International Airport, a top regional U.K. airport, is approximately 49%. In 2011, we added a 30% interest in Copenhagen Airport and a 39% interest in Brussels Airport to our portfolio.
Container Terminal Facilities
In 2007, we acquired four North American marine container terminals: Vanterm and Deltaport in the Vancouver, British Columbia, area; New York Container Terminal on Staten Island, New York and Global Terminal in New Jersey. Now operating as GCT Global Container Terminals, the company handles more than 2 million containers annually.
Rail
In 2010, we acquired High Speed 1 (HS1), a 109-km high-speed rail line linking London with the Channel Tunnel, with our 50% partner Borealis Infrastructure Management. HS1 runs domestic commuter services and international services connecting London and continental Europe.