Fund will retain a 9.995 per cent stake in Transgrid and manage the other 9.995 per cent interest on behalf of the buyer
The Future Fund Board of Guardians (FFBG), Australia’s sovereign wealth fund, has acquired a 9.995 per cent equity interest in Transgrid, marking a notable move into energy infrastructure alongside Ontario-based pension giant OMERS, according to a press release issued by OMERS.
While the the transaction has now closed, the terms of the deal remain confidential. Following the deal, OMERS will retain its existing 9.995 per cent direct interest while also managing the new Future Fund stake under its asset management platform.
Transgrid operates the high-voltage electricity transmission network across New South Wales and the Australian Capital Territory. As the backbone of Australia’s National Electricity Market, it plays a critical role in the decarbonization of the country’s energy grid by investing in essential new infrastructure.
OMERS emphasized the alignment of values between the two institutions, noting the partnership reflects an increasing appetite among global institutional investors for stable, long-duration infrastructure assets that are both inflation-resilient and socially impactful.
“For over 25 years, OMERS has been a direct investor in infrastructure. The asset class has provided OMERS with strong and predictable returns and the assets in our global portfolio – including firms such as Transgrid – have a strong social ethos and a purpose that fits the requirements of delivering for our members, partners and communities in which we invest," said Ralph Berg, OMERS’ chief investment officer.
"We are very proud to welcome Future Fund, with whom we share similar values and a common mission, into our Strategic Partnership Program, where they are now a co-investor in Transgrid and can access our excellent asset management platform and capabilities," he added.
Meanwhile, Michael Hill, executive vice president and global head of OMERS infrastructure, highlighted the depth of OMERS’ commitment to the Australian market, noting the Canadian penion fund has "deployed over AUD 4 billion into energy, transport and digital assets. We are delighted to have Future Fund investing alongside us in Transgrid, one of the essential community assets in our portfolio that are critical contributors to the delivery of consistent and reliable returns to OMERS members," he said.
As for the Future Fund, the deal aligns with its strategy to invest in real assets that offer protection against macroeconomic volatility.
"The transition requires the support of patient, long-term investors and we believe our capital will be well rewarded by supporting Transgrid’s growth," said Ben Samild, chief investment officer of the Future Fund. "Large infrastructure assets such as Transgrid help us achieve our Investment Mandate to deliver attractive risk adjusted returns and protect the portfolio from higher inflation, interest rates and currency volatility.”
