CDPQ, Colombia to Launch Private Equity Infrastructure Fund

Platform will invest up to $1 billion in Colombian infrastructure projects and companies.

Canada’s C$308.3 billion ($232.7 billion) pension fund Caisse de dépôt et placement du Québec (CDPQ) and Colombia’s finance ministry are collaborating with local pension fund companies to create a 3 trillion peso ($926 million) private equity fund to invest in domestic infrastructure, with a focus on energy.

CDPQ said the objective of the joint investment platform is to make long-term equity investments in infrastructure projects and companies. The investments will be made in the energy and renewable energy sectors, transportation, social infrastructure, telecommunications, water, and basic sanitation.

“This partnership combines our partners’ market knowledge with our expertise in infrastructure,” said CDPQ CEO Michael Sabia in a release. “We believe that together, we can find the best investment opportunities in a variety of sectors, generate returns for our respective pensioners and at the same time contribute to economic growth in Colombia.”

Investments in the private capital fund will come from Colombian financial firm the Financiera de Desarrollo Nacional (FDN) and local pension fund administrators, and will be managed by an FDN affiliate.  FDN is an independent private company tasked with arranging the investors and resources necessary to help develop the country’s infrastructure.

The FDN and Colombian pension fund administrators have created a new private capital fund of $490 million, which will invest with CDPQ through a platform to make capital investments of up to $1 billion in infrastructure projects and companies. CDPQ will contribute up to $510 million, with the minimum size of each investment set at $50 million divided between the fund and CDPQ.

“With this private fund, capital will be invested in infrastructure, with the support of all Colombian pension fund administrators, who will be able to make long-term equity investments in projects and companies,” said FDN President Clemente del Valle in a release. “This is a leap for the country in the field of infrastructure financing.”

The investment processes of the private investment capital fund will be conducted by a wholly-owned FDN subsidiary. Investors in the private capital fund will include the FDN, with up to 20% of the total, and the remaining 80% will come from Colombian pension fund manager Colfondos, insurance firm Old Mutual, Grupo Aval-owned pension fund administrator Porvenir, and Protección.

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