Caisse, CPPIB building on investment in engineering firm
The Caisse de dépôt et placement du Québec and the Canada Pension Plan Investment Board are investing in WSP Global Inc., an engineering and design services firm, through a private placement of common shares.
The Caisse is set to buy about $44 million of common shares in aggregate, while a subsidiary of the CPPIB is purchasing about $20 million. These investments build on previous investments by both pension funds in WSP.
“This additional investment is a continuation of our partnership with WSP,” said Kim Thomassin, executive vice-president and head of Quebec investments and stewardship investing at the Caisse, in a press release. “In keeping with our long-term approach, we have built a strong relationship with WSP over the last decade and we look forward to supporting the company in the accomplishment of its strategic ambitions.”
WSP aims to use the fresh capital to contribute to general company operations, as well as to fund future acquisition opportunities.
“We are pleased to support WSP in its pursuit of new growth opportunities,” said Deborah Orida, senior managing director and global head of active equities at the CPPIB. “This private placement builds on our nearly decade-long investment in the company, contributing to our strategy to be a cornerstone minority shareholder in public companies where we can meaningfully contribute to their growth.”
In addition to the private placements with the Caisse and the CPPIB, WSP is raising further funds through a public offering of common shares. For the public offering, it has entered an agreement with CIBC Captial Markets, National Bank Financial Inc. and TD Securities Inc. which are acting as joint book runners on behalf of a syndicate of underwriters that will be purchasing the shares at $86 per share, totalling $437 million.
The issuance of the shares in both the public offering and private placement is subject to customary approvals.
The Caisse also released its annual report this week, highlighting the results announced on Feb. 20, including a return of 10.4 per cent for 2019 and a growth in net assets of $30.6 billion for the year ended Dec. 31, 2019.
The report rounded up the Caisse’s impact in Quebec for 2019. Highlights included that total assets in private companies in the province reached $47.6 billion, up more than 155 per cent in 10 years. It also partnered with 750 companies, including more than 650 small and medium enterprises.
As well, the Caisse noted it reached several achievements in its Quebec strategy, including: impactful projects — continued construction on several branches of the Greater Montreal area’s light-rail transit system, including two kilometres of rails on the South Shore and the launch of construction on 10 stations; growth and globalization — investment and support for the growth and globalization of Quebec companies, including Le Germain Hotels, La Coop Fédérée, Golf Avenue and Top Aces Inc.; and innovation and the next generation — the creation of a $250-million fund for companies specializing in artificial intelligence and launch of a $50-million envelope for seed funds for innovative companies.
The Caisse also increased its exposure to global markets by two per cent, reaching 66 per cent at the end of 2019. Highlights included: increased investments in the U.S., including a partnership with Hilco Global and another with Ontario Teachers’ Pension Plan and Constellation Insurance Holding to launch a global insurance platform; and key transactions in growth markets with partners, such as LOGOS Group in India, Prologis Inc, in Brazil and Australis Partners and the International Finance Corp. in Colombia.
In terms of private equity, the Caisse invested $10.5 billion in various companies in Quebec and around the world, including transactions in security services in the U.S., health care in Australia and the pharmaceutical industry in Mexico. It reached almost $5 million in infrastructure investments, including stakes in an energy leader in Brazil and a U.S. communications towers company.
And for real estate, 2019 saw more than $11 billion in acquisitions, capital investments and sales, including increases in assets in industrial sectors in Asia Pacific, Brazil and India, as well as in logistics in the U.K.
Alongside its annual report, the Caisse published its stewardship investing report, which sets out its vision and commitment to priority topics such as climate change, diversity, governance and investing in the community.
In terms of the fight against climate change, the Caisse noted it’s added $16.8 billion in low-carbon assets since 2017, including $6.9 billion in 2019. And, since 2017, the portfolio’s carbon intensity was also reduced by 21 per cent against an objective of a 25 per cent reduction by 2025.