Top investor warns Canada, US infrastructure plans to take time

* Says could take more than a decade to launch projects

* OTPP is one of world’s largest infrastructure investors

* 2016 rate of return hit by negative currency impact
(Recasts, adds CEO comment on Canada/US infrastructure)

By Matt Scuffham

TORONTO, March 29 Ontario Teachers’ Pension
Plan, one of the world’s biggest infrastructure investors,
warned it could take more than 10 years for infrastructure
investment plans by Canada and the United States to come to
fruition.

Canada hopes its planned ‘infrastructure bank’ will
facilitate billions of dollars of financing from private
investors for critical projects in areas such as public transit
and green infrastructure. Meanwhile, U.S. President Donald Trump
has said he will launch a $1 trillion infrastructure programme
funded from private sources.

“To really make a coherent, long-term, visionary
infrastructure plan for Canada or the U.S. you’ve got to think
in terms of a decade or a decade and a half to really get
momentum in these projects,” Mock told reporters after the OTPP
published its annual results on Wednesday.

Canada’s Liberal government has come under pressure to move
more quickly in rolling out a planned C$180 billion ($135
billion) infrastructure programme.

Chief Investment Officer Bjarne Graven Larsen said he
believed Canada was ahead of the United States in progressing
with its infrastructure plan, partly because of the creation of
the infrastructure bank.

Ontario Teachers’ pioneered a move by Canadian pension funds
in the 1990s to invest directly in private companies,
infrastructure and real estate internationally as an alternative
to Canadian equities and government bonds.

The fund’s infrastructure portfolio includes investments in
Britain’s high speed railway connecting London and the Channel
Tunnel and in one of the largest desalination plants in the
world in Sydney, Australia.

The OTPP, which administers pensions for 316,000 working and
retired teachers in Canada’s most populous province, said its
rate of return dropped to 4.2 percent last year from 13 percent
in 2015. It cited unfavorable currency movements as a factor
behind the weaker performance.

The results still exceeded a benchmark target of 3.5 percent
for the fund, Canada’s third-biggest public pension plan.

The OTPP said its net assets grew to C$175.6 billion at the
end of 2016 from C$171.4 billion a year earlier.

The fund, which has investments in more than 50 countries,
said currency movements had a negative impact of 280 basis
points on its rate of return in 2016, compared with an
830-basis-point positive effect in 2015.

Ontario Teachers’ said it was 105 percent funded as of Jan.
1, meaning it had a surplus of assets with which to meet its
future pension obligations.

($1 = 1.3372 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Lisa Von Ahn, Bernard
Orr)


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