Carney is serious about privatizing airports, Australian pension executive says

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFinanceCarney is serious about privatizing airports, Australian pension executive saysPM could unveil next steps when large fund managers gather in September at Canada Investment SummitLast updated 3 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Governance changes and possibly even legislation would be required to privatize a couple of dozen large airports in Canada, including Toronto Pearson International Airport. Photo by Handout /TORONTO PEARSON INTERNATIONAL AIRPORTMark Carney’s government is serious about selling airports to private investors and could unveil steps to move in that direction when large fund managers gather in September at his Canada Investment Summit, according to an executive at a multi-billion-dollar Australian infrastructure investor that is keen to buy up to $10 billion of Canadian assets over the next decade.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Account“I do think the government can announce some very concrete things that will point the way to absolute investment opportunities,” said Gian-Carlo Peressutti, executive director of public affairs, policy and strategy at IFM Investors, which has more than $250 billion in funds under management and invests for Australia’s largest pension funds.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againHe said the Sept. 14 to 15 summit, where Carney has pledged to gather the world’s largest investors, would be a logical place to lay out a roadmap for private investment in airports.“What we were told was it won’t be weeks, but it won’t be years,” he said, adding that progress has been made since Carney visited Australia in March and met with some of that country’s largest pension funds. “So that seems to fit about right with that kind of a timetable.”IFM Investors will lead Australia’s delegation to the summit in Toronto and wants to help move things along by showcasing some of the unique structures its investment teams have used to acquire 17 airports around the world, said Peressutti. Manchester Airports Group in the United Kingdom, for example, is jointly owned by Manchester City Council and funds managed by IFM, a structure that calmed privatization concerns by leaving a stake in public hands.“We know that there are a couple of government and quasi-government organizations that have told us they are responsible for submitting options to the prime minister’s office about how this could work,” Peressutti said, adding that his understanding is the government is looking to present more than one potential scenario for structuring the transition to private investment.“That tells me that they’re decently far along,” he said.Governance changes and possibly even legislation would be required to privatize a couple of dozen large airports, including Toronto Pearson, which operate under not-for-profit authorities. And public opinion may be an issue, with a recent Nanos Research Group survey for Bloomberg News showing a slim majority of responses opposed the government’s plan to allow private investment in Canadian airports.But IFM will remain interested so long as the federal government is clear about its intention.“Could it take a year? It could,” Peressutti said. “But I don’t think any investor would tell you that’s an unreasonable amount of time to wait if the prime minister and his team makes it explicit.”This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Carney’s first budget last fall said his government would consider options to privatize Canada’s airports, and he followed up with a spring pledge to assess opportunities “to unlock the full value of airports in support of investments in Canada’s long-term growth, including through alternative models of ownership.”Ottawa already announced new legislation in the spring that would speed up the process by compelling “entities that own or operate an airport” and individuals whose activities may affect the value of an airport to hand over information at the government’s requests on the transportation minister’s timetable. The same spring economic update included the announcement of a $25-billion sovereign wealth fund to be seeded, in part, with proceeds from asset recycling — selling public assets to private institutional investors in order to fund new government priority projects that would not meet the risk and return criteria set by private investors.Peressutti said IFM, one of the large Australian institutional investors Carney met with during a swing through the country to promote trade and investment in March, is hoping to brief Canadian officials on Australia’s success with asset recycling, a program in the mid to late 2010s that drew investment from some of Canada’s largest pension funds.“Most failures in the public-private partnership and asset recycling space have come when one side wasn’t exactly sure of the deal they were getting themselves into,” he said, adding that IFM’s toll road ownership agreements stipulate minute details down to how long the grass is allowed to grow.“I always use that as an example of detail that we oftentimes will readily agree to operate under…. Those are the negotiations that we have to make sure that both sides are crystal clear.”If Australian pension funds were to buy a Canadian airport, Peressutti said it would likely be done in partnership with at least one of Canada’s Maple 8, an informal term used to describe the country’s largest pension funds including the Canada Pension Plan Investment Board and the Caisse de dépôt et placement du Québec.“I would imagine that at the end of the day … there would be a consortium of which the Maple 8 would be a major part,” he said, adding that this would make sense since it’s their home market and could help with public opinion.Moreover, the Australian and Canadian pension funds have already forged partnerships around the world.Peressutti said his fund would not be averse to the government retaining a stake in airports or board representation, so long as the governance structure meets the private investors’ requirements.As for what other types of investments IFM is looking for in Canada, he said these include tolls roads, seaports, renewable energy, liquid natural gas, midstream oil pipelines and data centres.“It’s that kind of what I would call legacy infrastructure that we invest in,” he said.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.