UPP Invests in Angel Trains, Expands Its Infrastructure Program

Earlier today, UPP issued a press release stating it has invested in Angel Trains and expanded its infrastructure program through partnership with Arjun Infrastructure Partners:

Toronto / London – March 26, 2024 – Arjun Infrastructure Partners (Arjun) and University Pension Plan Ontario (UPP) are pleased to announce an investment in Angel Trains, as well as the establishment of a partnership to pursue further infrastructure investments in OECD countries. UPP’s investment includes a meaningful commitment to Arjun’s current Infrastructure Alliance Europe fund along with acquiring an interest in Angel Trains, the UK’s leading rolling stock company. This initial investment is a testament to the partnership, laying the groundwork for future co-investments.

Angel Trains is the largest rolling stock company in the UK, serving the passenger rail sector with a diversified fleet of circa 4,400 vehicles, the majority of which are electric multiple units. Angel Trains, as an Investor in People, brings market-leading expertise in asset management, ensuring the fleets deliver to their full potential throughout the whole asset lifecycle.

“Arjun is delighted that UPP have chosen to make this significant commitment to its European infrastructure platform, underscoring their dedication to growth in the region. Angel Trains has excellent ESG credentials with sector-leading commitment to decarbonization and innovation; its ‘cradle-to-grave’ asset stewardship approach ensures fleets deliver their full potential throughout their asset lives. We are delighted to continue supporting the company and its highly regarded management team in delivering its next phase of development,” said Surinder Toor, Managing Partner at Arjun Infrastructure Partners.

“We are delighted to partner with Arjun to expand our infrastructure investment program and complete UPP’s first co-investment. A key part of our investment strategy is partnering with market-leading, like-minded investors like Arjun on attractive co-investments and we are confident this investment can help UPP generate strong and stable long-term returns for our members. Given UPP’s desire to support the transition to a low-carbon economy and Angel Trains’ focus on decarbonizing their fleet, along with the company’s strong management team, shareholder group and business, this is a very attractive opportunity for us,” said Peter Martin Larsen, Senior Managing Director and Head of Private Markets Investments at UPP.

About Arjun Infrastructure Partners

Arjun Infrastructure Partners is an independent European infrastructure fund manager with CAD8.5bn / USD6.2bn AUM. Founded in 2015, Arjun provides direct access to European mid-market core/core plus infrastructure through funds as well as separate managed accounts. Arjun has an experienced, sector-specialist team of 38 with extensive operational knowledge combined with institutional financial pedigree.


About University Pension Plan Ontario (UPP)

University Pension Plan Ontario (UPP) is a jointly sponsored defined benefit pension for Ontario’s university sector. UPP manages nearly CAD$11 billion in pension assets and proudly serves over 39,000 members across four universities and 12 sector organizations. UPP is growing a resilient fund to secure pension benefits for members today and for generations to come, and is open to all employers and employees within Ontario’s university community. For more information, please visit MyUPP.ca.

Below, a little more about Arjun Infrastructure Partners:

Arjun Infrastructure Partners is an independent asset management firm dedicated to identifying, executing and managing mid-market infrastructure investments. Founded in 2015, Arjun now manages over €5.7 billion of capital on behalf of prominent institutional investors. ​ 

Our team of 38 professionals has extensive operational and financial experience in the utilities, energy, renewables, digital, social and transportation infrastructure sectors. We offer a proven ability to source bilateral investment opportunities and have a strong focus on ESG as part of our long-term, responsible asset management approach.​

This is as perfect of a partner as UPP can get because the focus is on mid-market infrastructure assets, they aren't too big so UPP can grow nicely with them and their focus is on ESG throughout the investment lifecycle.

As Peter Martin Larsen, Senior Managing Director and Head of Private Markets Investments at UPP stated in the press release, this deal completes UPP’s first co-investment in infrastructure.

Remember, UPP is still relatively small, roughly $12 billion in assets mostly in public markets and the big job is to ramp up private market investments in a hostile environment where higher rates have hurt these assets (but there will be plenty of opportunities too).

Peter also noted this in the press release: "Given UPP’s desire to support the transition to a low-carbon economy and Angel Trains’ focus on decarbonizing their fleet, along with the company’s strong management team, shareholder group and business, this is a very attractive opportunity for us."

Perhaps more than others, UPP's members are really keen on ESG and some are openly and foolishly calling on UPP to divest from fossil fuels

When I read nonsense like that, I cringe and think to myself how lucky I am not to be in Barb Zvan's shoes.

In case you haven't noticed, I'm very blunt, I can't stand stupidity no matter where it comes from, especially when it comes from academics who really don't have the faintest of what's in the best interest of their pension plan.

My advice to all these rambunctious members is listen very carefully to Barb Zvan and her senior team and lay off these idiotic calls to divest from fossil fuels.

And for Pete's sake, please stop listening to Shift Action for Pension Wealth and Planet Health (SHIFT) which notes Canada’s $2.2 trillion pension sector put exclusions on oil and gas investments in 2023 but its “incremental progress” on climate change last year falls short of changes by US and European peers:

SHIFT monitors the fossil fuel and climate-related investments of Canadian pension funds. In its second annual “report card,” the sustainable finance charity reviewed 11 of Canada’s largest pension managers, including the so-called “Maple 8,” which collectively manage retirement savings on behalf of over 27 million Canadians.

“Despite a few encouraging examples of leadership, Canada’s largest pension funds continue to invest their own members’ retirement savings in companies that are accelerating the climate crisis,” SHIFT wrote in the report released on Tuesday.

“Canada’s pension sector remains misaligned with the scientific imperative to limit global heating to as close to 1.5 degrees celsius as possible, in-line with the goals of the Paris Agreement.”

SHIFT says eight of the 11 funds in its report have committed their portfolios to reach net-zero emissions by 2050 or sooner. However, even Canada’s most climate-aligned pension funds, Caisse de dépôt et placement du Québec (CDPQ), and University Pension Plan (UPP), were found to lag international peers.

Those include New York City Public Pensions and France’s Ircantec, which received “A-” grades in the report. CDPQ and UPP received “B+” grades. Alberta Investment Management Corporation (AIMCo) ranked last in 2023 for the second time, receiving a “D” grade. Companies were evaluated on alignment with the Paris climate target, as well as other factors, like interim emissions targets, and fossil fuel investment exclusions.

SHIFT says Ontario Municipal Employees Retirement System (OMERS) and the Healthcare of Ontario Pension Plan (HOOPP) showed the most progress in 2023. Each fund announced limited fossil fuel exclusions from their investment portfolios last year, joining UPP, Investment Management Corporation of Ontario (IMCO), and CDPQ, which says it has “essentially completed” its divestment of oil producers, according to SHIFT’s report.

“Exclusions on new investments in some fossil fuels are becoming increasingly common amongst Canadian pension funds,” the authors wrote. “Alarmingly, some Canadian pension funds chose to increase their exposure to high-risk fossil fuels in 2023.”

When I read this nonsense, it irritates me and I'm truly wondering if this obsessive focus on ESG and green investments is in the best interest of plan members. 

Anyways, as far as I'm concerned, the folks from SHIFT are out to lunch and have an axe to grind, spreading alarmist misinformation.

Total nonsense, thank God I don't work at a pension fund any longer, I have ZERO patience for this sanctimonious nonsense. 

Again, trust your pension fund managers, stop obsessing over ESG, there are great deals in energy transition like the investment in Angel Trains and others but the world still runs on fossil fuels and we need them to survive.

Below, check out highlights from the 2023 SRPAA Perspectives Lecture with keynote speaker Barb Zvan, President and CEO of University Pension Plan Ontario (UPP), held November 7th at the Fairmont Royal York.

Barb is an expert on climate change risk and ESG related matters and she understands the risks and opportunities in this space. She's a smart cookie and has the patience to deal with her equally smart and demanding members (not all of them are as ideological pushing for divestment from fossil fuels).