The Real Deal New York

Canadian pension fund in talks with US lawmakers about new infrastructure

Caisse de Depot et Placement du Quebec is developing a new $4.9B transit system for Montreal
June 03, 2018 09:00AM

(Credit: Jeangagnon, Caisse de dépôt et placement du Québec)

Canada’s second largest pension fund is taking a new approach to infrastructure investment that’s got American lawmakers curious.

The Caisse de dépôt et placement du Québec is going to create a new transit system in Montreal that will overlay the existing subway system, generate between 8 to 9 percent returns, and the Caisse will retain a majority stake of 53.3 percent, according to Bloomberg.

While the model is new with an unproven track record, already CEO Michael Sabia notes that U.S. municipal and state lawmakers have reached out to query his fund about projects in their own locales.

“We have had a great deal of interest in the United States from both mayors of major cities and governors of major states. I can’t go further than that, because those conversations remain confidential,” Sabia told Bloomberg.

“All I can say is there has been a great deal of interest and we are actively engaged in at least two or three conversations with respect to doing this in the United States,” he continued.

The two other parties who hold equity in the Caisse’s new transit project include the Quebec provincial government and the Canadian federal government, each with 23.3 percent. Sabia expects the system to be up and running by 2021 with a total bill of nearly $4.9 billion. [Bloomberg]Erin Hudson