Showing posts from 2019

CPPIB Buys Stake in Indonesian Toll Road

IPE reports that CPPIB just bought a toll road stake as a debut infrastructure investment in Indonesia:
Canada Pension Plan Investment Board (CPPIB) has made its debut infrastructure investment in Indonesia with the acquisition of a 45% stake in the Cikopo-Palimanan (Cipali) toll road.

CPPIB is partnering PT Baskhara Utama Sedaya (BUS) to jointly acquire the 55% stake, in the concession holder and operator PT Lintas Marga Sedaya (LMS), currently held by PLUS Expressways International.

BUS is an existing owner of 45% of LMS and will increase its stake to 55%. CPPIB will acquire the remaining 45% stake in LMS for an undisclosed sum.

The 117km Cipali toll road is one of the longest operational toll roads in Indonesia and a critical link in the transportation network of the island of Java, as part of the Trans Java Toll Road network.

Scott Lawrence, managing director, head of infrastructure, CPPIB, said: “Cipali toll road provides CPPIB access to a vital infrastructure development supported…

More Fallout at the Caisse's Otéra Capital?

Hugo Joncas of TVA Nouvelles wrote an article discussing why a director of the Caisse's real estate lending subsidiary, Otéra Capital, was fired back in May. The article is in French but I used Google translate and some editing so my readers can get the gist of it:
The Caisse de dépôt dismissed a director of its subsidiary Otéra Capital, Yvon Tessier, in the wake of its investigation into ethical issues in May.

The director had to leave the board of directors of Otéra, where he had sat for eight years.

At a press conference, the Caisse confirmed the departure of three executives. Our Investigation Office had already identified them in February and March in a series of reports on mafia ties and ethical sprains of executives of Otéra, specialized in real estate financing.

The Caisse also mentioned that a fourth person "related to Otéra" no longer "holds functions", following the independent investigation of Osler, Hoskin & Harcourt, triggered at the beginnin…

BCI Misreporting its SEC Filings?

Viktor Ferreira of the Financial Post reports that one of Canada's largest pension funds forgot to disclose $2.46 billion in Canadian holdings to the SEC — and it's not the first time:
One of Canada’s largest pension funds “inadvertently omitted” all of its Canadian holdings from a recent disclosure it made to the U.S. Securities and Exchange Commission, failing to include about US$2.46 billion in investments.

British Columbia Investment Management Corporation made the omission in February, when it submitted its disclosures for the three months ending on Dec. 31, 2018. The pension fund, which has $145.6 billion in assets under management, failed to disclose holdings in 98 companies, primarily across Canada’s energy, banking and mining sectors. The Canadian holdings accounted for more than 20 per cent of its total disclosed investments.

BCI, which manages the pensions of B.C.’s public sector workers, said it only discovered that it had omitted these investments following inqu…

Did HOOPP Exploit the Danish Tax System?

Zach Dubinsky of CBC News reports that Ontario health-care workers' pension has up to $430M at stake in Danish tax dispute:
One of Canada's largest pension funds has been hauled into court in Denmark in a dispute about whether it improperly claimed hundreds of millions of dollars in tax rebates on Danish stock dividends, in a country already roiling from an alleged $2.5-billion stock dividend fraud.

Denmark says the case against the Healthcare of Ontario Pension Plan, or HOOPP, involves no allegations of fraud, but instead turns on whether the pension fund truly owned billions of dollars of shares in Danish companies or just temporarily borrowed the stock and collected dividends on it.

At stake is $180 million that was paid out to the pension fund in the form of tax rebates between 2011 and 2014, plus another $252 million in rebates HOOPP claimed since then that the Danish Tax Agency refused to reimburse.

HOOPP — the eighth biggest pension fund in Canada and one of the Top 30…

Quant Quake 2.0 and QE Infinity Unnerving Investors?

Robbin Wigglesworth of the Financial Times reports how the drop in hot stocks stirs memories of ‘quant quake’:
The stock market may appear tranquil again after a rollercoaster summer, but many analysts and investors are unnerved by violent moves beneath the surface, reviving memories of the 2007 “quant quake” that shook the computer-driven investment industry.

The FTSE All-World equity index has rallied almost 3 per cent already this month, clawing back some of August’s losses. However, many highly popular stocks suffered a sudden and brutal sell-off this week, a reversal that analysts have already dubbed the “momentum crash”.

The blow was particularly strong in the US, where strong-momentum stocks — those with the best recent record — tumbled 4 per cent on Monday, in the worst one-day performance since 2009, according to Wolfe Research. Only once before, in 1999, has such a rout afflicted momentum-fuelled smaller company stocks, according to investment bank JPMorgan.

“This is massive,”…

OMERS on Closing the Asia Infrastructure Gap

Michael Rolland, President and Chief Operating Officer, Asia-Pacific at OMERS, wrote an interesting comment for the Milken Institute offering a Canadian pension investment executive's perspective on closing the infrastructure gap in Asia:
Twenty-six trillion dollars—that’s what the Asian Development Bank (ADB) has estimated that Asian countries will need to have cumulatively invested in infrastructure between 2017 and 2030 to maintain their respective rates of economic growth. That works out to about $1.7 trillion per year, approximately equal to the entire annual GDP of my home country of Canada.

Simultaneously, rising populations (by 2030, 66 percent of the global middle class will live in Asia), rapid economic growth, and technological progress are transforming Asia into the key world market for goods and services over the next half-century.

As the region grows, institutional investors are further compelled to consider their footprints and their investment interests in the re…