CANADA - UBS’s infrastructure subsidiary has acquired 50% of an electricity firm co-owned by the €70.4bn Ontario Teachers’ Pension Plan (OTTP) for an undisclosed figure.
The acquisition of Northern Star Generation from AIG Highstar Generation is the bank’s first for an infrastructure fund scheduled for launch in Q3 2007. Electricity produced at the firm’s 13 US plants is unregulated – which means it can sell electricity at market or contractual terms rather than at a state-regulated price.
The fund will invest in infrastructure assets in OECD countries, including
utilities, communications, transport, and social infrastructure such as hospitals and stadia.
"The infrastructure business is globally focused, and it’s a global asset management fund," said UBS spokesperson Kris Kagel.
In a press statement, Steve Jacobs, global head of the UBS infrastructure asset management business, cited "investment-grade rated counterparties" as a driver of its interest in the deal.
The partnership with OTTP will likely set a precedent for the fund’s investment strategy. "We expect to work with other pension funds and institutions that are familiar with infrastructure investments," said Kagel.
OTTP welcomed the acquisition. "We’re long-term investors and we look for stable investments," pensions communications manager Debra Hanna told IPE Real Estate. "We believe the UBS position and interests are aligned."
In separate news, the private equity arm of the Canadian pension fund is recruiting eight asset managers for its recently launched London office – its first outside of Canada.