CPPIB committed millions to EQT and KKR as infrastructure deals outgrew solo bids
Almost US$80bn of energy and infrastructure exposure sits on the books of the Canada Pension Plan Investment Board (CPPIB), built by investing directly in companies rather than through outside managers.
Over the past year the fund has started backing the funds of the largest private capital groups, CPPIB told the Financial Times, committing to vehicles run by Blackstone, KKR, and EQT so it can pursue larger transactions alongside them.
Infrastructure deals are becoming increasingly large, James Bryce, head of infrastructure at CPPIB, told the FT.
Bryce said in the same interview that partnering with a fund could open up "deal opportunities that we may not have been able to chase on our own."
CPPIB has committed €500m to EQT's €22bn flagship infrastructure fund and US$750m to KKR's equivalent over the past year, and has pledged to invest in Blackstone's open-ended funds, according to the FT.
Bryce told the publication that the infrastructure arm would still mostly invest directly in companies, with fund commitments used to source and underwrite large deals jointly with those managers.
Benefits and Pensions Monitor previously reported the €500m EQT Infrastructure VI commitment as part of CPPIB's fiscal 2025 results.
Global Infrastructure Partners (GIP), bought by BlackRock two years ago, now manages US$170bn and recently raised a US$25bn fund, the FT reported.
KKR's most recent infrastructure fund raised US$19bn, while Blackstone's open-ended vehicle manages roughly US$75bn.
Infrastructure fundraising by managers of institutional capital hit a record US$200bn last year, the FT reported, citing McKinsey.
Two of this year's largest transactions involve GIP, which agreed to acquire Aligned Data Centres for US$40bn and power group AES for US$33bn, per the FT, with artificial intelligence (AI) and energy security driving deal sizes upward.
John Graham, chief executive of CPPIB, told the FT that "there was no $20bn infrastructure fund" 20 years ago.
Graham said deploying a billion dollars then would have left an investor holding 80 percent of a fund, and the "inflection" arrived within the past five years.
CPPIB ended the first quarter of fiscal 2027 on June 30, with net assets of $863.6bn, up from $793.3bn three months earlier, the fund said in its August results release.
The $70.3bn increase came from $60.2bn in net income and $10.1bn in net transfers from the Canada Pension Plan, and the fund posted a 7.5 percent quarterly net return alongside a 9.4 percent 10-year annualised net return.
Real assets, particularly energy, contributed meaningfully to the quarter, the fund said, alongside credit and external manager programs.
Fund-manager partnerships already run through the quarter's transaction list.
CPPIB invested US$1.75bn to support EQT's AI infrastructure strategy, led by data centre developer EdgeConneX, and acquired a 50 percent stake in Peruvian power platform Inkia Energy at a US$3.4bn enterprise value alongside I Squared Capital, according to its first-quarter release.
The KKR relationship predates the fund commitment.
Benefits and Pensions Monitor previously reported that CPPIB agreed to buy an approximate 13 percent indirect equity interest in Sempra Infrastructure Partners for about US$3bn, executed alongside KKR affiliates as part of a consortium acquiring a 45 percent stake at an implied equity value of US$22.2bn.
The publication also reported CPPIB's commitment of up to $1bn to a data centre partnership with CtrlS Datacenters in India.
Governance terms remain a condition of CPPIB's largest commitments.
Graham said large capital commitments require "governance rights and ability to control your own destiny," according to a previous report by Benefits and Pensions Monitor citing the Financial Post.
