OMERS sells half of Transgrid stake to Australia’s Future Fund

OMERS has sold half of its 19.9% stake in Australian energy company Transgrid to the Future Fund, Australia’s sovereign wealth fund.

The Future Fund Board of Guardians (FFBG), the body responsible for managing the government’s investment funds, said it has acquired the 9.995% stake in Transgrid from OMERS.

OMERS, which acquired its 19.9% stake in Transgrid in 2020, will retain a 9.995% stake in the energy company and will also manage FFBG’s newly acquired interest.

Financial details were undisclosed.

Transgrid, the largest electricity transmission network in Australia, operates and manages the high-voltage electricity transmission network in New South Wales and the Australian Capital Territory. 

Ralph Berg, CIO of OMERS, said: “For over 25 years, OMERS has been a direct investor in infrastructure. The asset class has provided OMERS with strong and predictable returns and the assets in our global portfolio – including firms such as Transgrid – have a strong social ethos and a purpose that fits the requirements of delivering for our members, partners and communities in which we invest.

“We are very proud to welcome Future Fund, with whom we share similar values and a common mission, into our strategic partnership programme, where they are now a co-investor in Transgrid and can access our excellent asset management platform and capabilities.”

Michael Hill, EVP and global head of OMERS Infrastructure, said: “OMERS and Future Fund are strongly aligned, like-minded investors, and we are delighted to partner with Australia’s sovereign wealth fund through our strategic partnership programme to bring our world-class investment and asset management capabilities to managing our collective investment in Transgrid.

“Australia is a core part of our investment strategy, and essential community assets such as Transgrid remain an important contributor to the delivery of consistent and reliable returns on behalf of our members.” 

Christopher Curtain, senior managing director and head of Asia-Pacific, OMERS Infrastructure, said: “OMERS first invested in Transgrid in 2020, recognising the high quality, critical infrastructure services it provides to Australian businesses and communities. 

“We are proud of our support of Transgrid over the past five years as it has been leading an unprecedented transition of the Australian energy sector and look forward to continuing to do so through our new partnership with Future Fund.”

Ben Samild, CIO of the Future Fund, said: “Our investment in Transgrid is in line with our risk and return objectives and reflects our consideration of the opportunities of the energy transition. The transition requires the commitment of patient long-term investors, and we believe our capital will be well rewarded by supporting Transgrid’s growth.

“Large infrastructure assets such as Transgrid help us achieve our investment mandate to deliver attractive risk-adjusted returns and protect the portfolio from higher inflation, interest rates and currency volatility.” 

Peter McCosker, director, infrastructure at the Future Fund, said: “We are very pleased to have secured an investment in Australia’s premier electricity transmission business. We look forward to working constructively with the Transgrid team, our co-securityholders and all Transgrid’s stakeholders to deliver long-term, sustainable outcomes for the business whilst facilitating Australia’s energy transition.

“This investment is a valuable addition to the Future Fund’s infrastructure holdings and will diversify our portfolio and help deliver on our investment mandate.”

Future Fund now joins an existing consortium of Transgrid shareholders, which includes Spark Infrastructure, the Morrison-managed Utilities Trust of Australia, CDPQ, Abu Dhabi Investment Authority-owned Tawreed Investments and OMERS.

Since the end of 2021, Australian energy firm Spark Infrastructure has been owned by a consortium comprising KKR, Ontario Teachers’ Pension Plan and the Public Sector Pension Investment Board.

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