Executive Shakeup at OMERS Infrastructure After Thames Water Fiasco
One of Canada’s biggest pension funds has parted ways with two top infrastructure executives after writing off its stake in Thames Water and the souring of another high-profile European investment.
Alastair Hall, senior managing director for Europe, and Chris Hogg, a director who led the firm’s digital infrastructure investments, have left Ontario Municipal Employees Retirement System in recent weeks, according to three people familiar with the matter.
The exits follow struggles at two of Omers’ top investments. Hall, who joined in 2014, was involved in the fund’s investment in Thames Water. The fund was the utility’s largest shareholder and wrote off its entire 31 per cent stake in 2024.
Hogg, who joined in 2023, was one of the lead executives on Deutsche Glasfaser, a heavily indebted German broadband provider now scrambling to secure its financial future. Omers jointly bought Glasfaser with EQT in 2020 and holds a 49 per cent stake.
In December, the pension fund proposed a €1.7bn refinancing deal to Glasfaser’s creditors alongside EQT under which the owners would inject €1.1bn of “preferred” equity in exchange for €600mn of “super senior” debt.
Holders of the “super senior” debt would be the first to be repaid in the event of a bankruptcy, while “preferred” equity investors would get priority over the previous equity put into the business.
The shareholders have already invested €4bn into Glasfaser since purchasing it from KKR in 2020. Last year, they were forced to scale back the company’s original goal of serving 6mn homes by 2032 to just 3.2mn, in an effort to cut costs and stabilise the business.
A person familiar with the matter said Hogg was not the most senior Omers executive responsible for Glasfaser.
Omers manages C$141bn (about $104bn) of assets on behalf of 640,000 current or former public-sector and community workers in Canada’s Ontario province.
Some 22 per cent of the fund was invested in infrastructure at the end of June, with 19 per cent in private equity and 13 per cent in private credit. European investments account for 18 per cent of the total portfolio.
The fund is exploring the sale of its 33 per cent stake in Associated British Ports in a deal it hopes will complete in the second half of this year and value the UK’s biggest ports operator at more than £10bn.
It also sold its stake in London City Airport to Macquarie last year alongside Alberta Investment Management Corporation, following Ontario Teachers’ Pension Plan’s sale of its holding in the airport to Australia’s largest infrastructure investor last June.
A person familiar with Omers said the sales and the departure of executives did not indicate that Omers was looking to scale back its European infrastructure investments. They cited the fund’s acquisition of a network of Italian railway stations, Grandi Stazioni Retail, alongside DWS in 2024.
The same year, Omers restructured its European private equity team as it announced it would no longer invest directly in private companies in the region.
Michael Hill, global head of Omers Infrastructure, said Europe remained an integral part of its diversification strategy. He thanked Hall for his “significant contributions” and said recruitment for a new European infrastructure head was under way.
Siqalane Taho of Infrastructure Investor also reports OMERS Infrastructure’s European head Hall resigns:
The infrastructure investment division of the Ontario Municipal Employees Retirement System (OMERS) has seen the head of its European business exit the organisation, Infrastructure Investor has learned.
Sources with knowledge of the matter said that Alastair Hall has resigned from his position as senior managing director and head of Europe at OMERS Infrastructure.
Michael Hill, executive vice president and global head of OMERS Infrastructure, confirmed the news in a statement to Infrastructure Investor.
“Alastair Hall has decided to leave OMERS. We want to thank him for his significant contributions to our team and growth of the infrastructure asset class in the region. We wish him all the best for his next career chapter,” he noted.
Infrastructure Investor understands that the firm is to embark on a recruitment drive to fill the vacant position, with managing directors reporting to Hill in the interim.
Hall joined OMERS in 2014, rising through the ranks to oversee the firm’s European investment activities and team from London in 2021.
Prior to that, he was global head of investment strategy and partnerships, where he was tasked with advancing the Canadian-headquartered manager’s international investment strategy and leading third-party capital formation initiatives.
Previously, Hall was responsible for allocating capital across the European energy, renewables and utilities value chain, including leading key investments in Thames Water, Ellevio, Net4Gas, Associated British Ports, Caruna, High Speed 1, SGN and MapleCo.
OMERS Infrastructure was forced to write off its entire 31.7 percent stake, valued at £990 million ($1.3 billion; €1.2 billion), in the beleaguered UK utility Thames Water in May 2024. The water company was then placed in special measures by the UK water industry regulator Ofwat in July 2024.
At the time, the utility had a net debt of £18 billion, up from £11 billion when OMERS Infrastructure made its investment in 2017.
In an interview with Infrastructure Investor in July 2024, Hill said of the Thames Water episode: “Obviously, we’re very disappointed with the outcome. You don’t go into an investment like this expecting this outcome. We’re very disappointed on behalf of customers in London and all of our stakeholders that we represent.
“Our team gave a tireless effort to try and get us to a better outcome and, in the end, I think we made a decision that was based on our fiduciary obligations to not continue to invest.”
At the end of 2024, OMERS’ annual report revealed that its infrastructure unit’s performance had recovered to an annualised 8.8 percent net IRR, up from a net return of 5.5 percent in 2023, but below the 12.7 percent achieved in 2022. It has a 10-year average return of 10.5 percent.
Before joining OMERS Infrastructure, Hall, an Oxford PPE graduate, worked for more than three years as an investment banker in Deutsche Bank’s London office, where he was a director in the natural resources unit.
His career began at Bank of America Merrill Lynch where he spent six years in the investment banking team, advising on energy and power sector deals.
Hall did not immediately respond to requests for comment.
Alright, never a dull moment in the Canadian pension world, more executive shakeups to report on, this time at OMERS Infrastructure.
I can't say I'm surprised, Thames Water was a disastrous investment for OMERS which it ended up writing off completely and someone had to take the fall.
I want to make it clear however that Alastair Hall worked on many exceptional investments at OMERS Infrastructure and it's too bad Thames will be associated with him.
I hated that investment from the time Macquarie sold it and it was an impossible task to turn that sinking ship around.
As far as Chris Hogg, who joined OMERS Infrastructure from Amber Infrastructure back in 2023 to lead the investment efforts in digital infrastructure in Europe, I honestly don't know much about him or what exactly happened with the Glasfaser investment.
But he was just a director so a senior managing director approved that investment.
If I'm not mistaken, he reported to Alastair Hall who hired him.
Anyway, OMERS Infrastructure is a lot bigger and stronger than these two investments, they will recruit new people and move on (I'll pass on some names to Michael Hill but I'm sure he has a short list already).
Executive shakeups happen all the time at the Maple 8 but lately they've been happening more frequently all over.
From the outside it doesn't look good but they're running a business, they need to make sure they have the right people at the top spots to continue delivering stellar long-term results.
And in the case of OMERS Infrastructure, they're also managing third-party money so they need to be on their A game all the time.
It doesn't mean Alastair Hall and Chris Hogg are bad infrastructure investors, they're both sharp and experienced, it just means it's time for a change to introduce new blood to the organization.
Alastair knows Annesley Wallace very well as they both worked on strategy in the past, so wouldn't be surprised if he helps HOOPP map out its European strategy.
We shall see, I obviously have no clue but wish Alastair Hall and Chris Hogg all the best, onward!
As for OMERS Infrastructure, Michael Hill will get busy recruiting top talent and moving on as well.
That's part of the business, not pleasant but sometimes necessary.
Below, from sewage spills to owing billions in debt, the UK’s biggest water company has come under a lot of heat recently. And, its grand rescue plan has just fallen through. Here’s a breakdown of the whole scandal from start to finish.
Comments
Post a Comment