Canadian funds test demand for large-core infrastructure as they weigh latest exit
Two of Canada’s biggest pension investors are preparing to cash out of the UK’s largest ports operator in a sale that could value the business at about US$18.5bn (£10bn+), according to the Financial Times.
The Canada Pension Plan Investment Board (CPPIB) and Ontario Municipal Employees Retirement System (OMERS) have hired Morgan Stanley to explore selling their stakes in Associated British Ports (ABP).
CPPIB owns 34 percent of ABP and OMERS holds 33 percent.
A deal could come as early as the second half of this year, though discussions remain at an early stage.
The potential exit would involve one of the UK’s core infrastructure assets.
ABP owns 21 ports across the country, including Southampton and the Humber, and handles about a quarter of the UK’s seaborne trade.
It also acts as a major industrial real estate developer and has been expanding its UK operations by increasing support for renewable energy suppliers, including offshore wind.
The group has approval to build a new freight and ferry terminal at Immingham in north-east England.
The shareholder base is heavily institutional.
Other major investors include Singapore’s sovereign wealth fund GIC with 20 percent and the Kuwait Investment Authority’s Wren House Infrastructure with 10 percent.
Asset manager Hermes, which owns about 6 percent of ABP, could also sell its stake, according to people close to the discussions cited by the Financial Times.
The sale process underscores strong demand from private capital for infrastructure assets that are viewed as offering relatively stable returns.
The size of the prospective deal is expected to limit the field of bidders, but the stake is likely to attract interest from other large infrastructure investors.
ABP was taken private in 2006 for £2.8bn by a consortium including Goldman Sachs’ infrastructure arm and OMERS.
Ownership has since evolved, with CPPIB acquiring its stake in 2015.
CPPIB manages US$777.5bn of assets and opened its London office in 2008. Its UK holdings include a stake in student accommodation provider Unite Students.
OMERS manages US$141bn of assets and had been the largest shareholder in Thames Water, but wrote off its investment in the debt-laden utility in 2024 as the company struggled with rising interest rates, regulatory disputes and infrastructure failures.
ABP Ports, CPPIB, OMERS, Hermes and Morgan Stanley all declined to comment, according to the Financial Times.
