CPDQ partners with Mexican pension funds to invest in infrastructure

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CPDQ partners with Mexican pension funds to invest in infrastructure

Caisse de dépôt et placement du Québec (CDPQ) and a consortium of Mexican institutional investors have partnered to invest in infrastructure projects in Mexico .

Specifically, CDPQ and Mexican institutional investors (including Mexico's three largest Afores), joined under CKD Infraestructura México, S.A. de C.V. (CKD IM), a newly-created trust, has announced the creation of a co-investment vehicle for infrastructure projects in Mexico. The agreement provides CDPQ and CKD IM with a platform to participate in the expansion and the modernization of Mexico's infrastructure.

The new co-investment platform will combine world-class infrastructure expertise with established local networks. The platform will invest up to MXN35.1 billion (US$2.11 billion) over the next five years. CDPQ plans to commit MXN17.876 billion (US$1.07 billion) and CKD IM MXN17.215 billion (US$1.04 billion). CDPQ will hold a 51% interest in the co-investment vehicle. CKD IM, whose shares are listed on the Mexican Stock Exchange, will hold the remaining 49%.

Fueled by ambitious structural reforms, favourable demographics and robust demand from the United States, the Mexican economy is poised for significant growth in years to come. Infrastructure opportunities show particular promise in the wake of the government of Mexico's four-year, MXN7.7 trillion plan for infrastructure investments, targeting energy and transportation projects, among others.

Over the next five years, the co-investment platform expects to pursue a wide range of investment opportunities in several sectors of the infrastructure market, such as energy generation, transmission and distribution, transportation and public transit, among others.

Michael Sabia, President and CEO of CDPQ, stated:

"When we look around the world, especially in the infrastructure sector, Mexico stands out as an exceptional country to invest in. Given the scope of the opportunities in this sector, we are pleased to join forces with leading Mexican institutional investors. By combining their in-depth knowledge of the market and local networks with our infrastructure expertise, we are creating an innovative investment platform that is ideally positioned to find and invest in the best Mexican infrastructure projects."

Eduardo Ramos, General Manager of CKD IM, commented:

"CKD Infraestructura México is the largest consortium of Mexican pension funds created to date. Together, these funds will invest in major projects that will provide tangible benefits for Mexicans, since it has been proven that infrastructure investments contribute to productivity and GDP growth. For us, it was a natural fit to partner with CDPQ, a global investor that shares our long-term vision and brings to the table its experience investing in infrastructure projects worldwide."

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