Canada’s top pension funds plan infrastructure investments in Germany [Private Equity Insights]

The largest pension funds in Canada, with assets under management of over €766bn, plan to step up investments in Germany following a meeting with German chancellor Olaf Scholz and vice-chancellor Robert Habeck last week during a three-day visit.

Caisse de dépôt et placement du Québec (CDPQ), with total assets worth C$392bn as of June this year, would like to invest more in Germany, with a particular focus on infrastructure, a spokesperson for the pension fund told IPE.

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Investments in infrastructure will address the broader energy transition, while CDPQ can generate growth, contributing to a more sustainable world, the spokesperson added.

Charles Emond, president and chief executive officer, and Marc-André Blanchard, executive vice-president and head of CDPQ global, and global head of sustainability, represented the pension fund at a meeting with Scholz during his time in Canada, the pension fund told IPE.

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Ontario Teachers’ Pension Plan (OTPP) is looking to continue investing in Germany in the coming years, and the meeting with the German chancellor was a good opportunity to express its desire to continue directly investing in that market, a spokesperson for the pension scheme said.

OTPP, with assets of C$242.5bn, would be looking at investments across all of its asset classes in Germany, the spokesperson disclosed.

The pension fund’s current investments in Germany include Lowell, a provider of receivables management, Synlab, a provider of laboratory diagnostic services, mobile tax app Taxfix, service provider for smart buildings Techem, saving and investing platform Trade Republic, and Veonet, a network of ophthalmological clinics.

OTTP’s president and CEO Jo Taylor met with Scholz during his recent visit to Canada, the pension fund confirmed to IPE.

John Graham, president and CEO of CPP Investments, the investment management organisation for the Canada Pension Plan, with C$523bn in assets at the end of June, met with both Scholz and Habeck for high-level discussions about the German market, a spokesperson for the pension fund told IPE.

Ontario Municipal Employees Retirement System (OMERS), with net assets of C$119.5bn at the end of June, was also among the pension funds that met with the German chancellor to discuss possible investments in Germany during the three-day visit, a spokesperson for the scheme confirmed to IPE.

OMERS Infrastructure, the infrastructure investing arm of the pension fund, acquired the provider of fibre-optic network Deutsche Glasfaser with EQT Infrastructure, to merge the company with Inexio already held by EQT in its portfolio.

Other investments by OMERS Infrastructure so far in Germany include Amedes, a provider of medical-diagnostic services for patients, private rail freight wagon-leasing company VTG, and Tank & Rast, the owner of a network of fuel stations, service stations, restaurants and hotels.

The pension fund has also bought the Sony Centre in Potsdamer Platz in Berlin together with private equity firm Madison.

“[Canadian pension funds] are specifically looking for investments into environmentally and socially sustainable projects. And that is also the message I am hearing from German business leaders at home and on this trip,” Scholz said during the speech at the German-Canadian Business Conference in Toronto last week.

Germany is also planning to increase the import of liquified natural gas (LNG), hoping that “Canadian LNG will play a major role in this,” the chancellor said in the speech.

During the visit last week, Habeck, who is also minister for economic affairs and climate action, signed an agreement with the Canadian minister of natural resources, Jonathan Wilkinson, to ship hydrogen produced in the provinces of Newfoundland and Labrador, Nova Scotia, and New Brunswick in Canada, to Germany as ammonia.

Source: IPE