UPDATE 1-Canadian pension funds to buy Chicago toll road operator for $2.8 bln

(Adds details, background, executive comments)
By Euan Rocha
TORONTO, Nov 13 (Reuters) - Three of Canada's largest
pension fund managers said on Friday that they would acquire the
operator of the Chicago Skyway toll road for $2.8 billion.
The Canada Pension Plan Investment Board, Ontario Municipal
Employees Retirement System and Ontario Teachers' Pension Plan
will each own a one-third interest in Skyway Concession Co LLC,
which has an agreement to operate the road until 2104.
Each of the three Toronto-based pension fund managers will
contribute an equity investment of about $512 million toward the
deal, which remains subject to regulatory approvals.
The 7.8-mile (12.8 km) Chicago Skyway is the only Illinois
toll highway not operated by the state Toll Highway Authority.
SCC was awarded operation rights on the road in January 2005 for
$1.83 billion.
"Skyway represents a rare opportunity for us to invest in a
mature and significant toll road of this size in the U.S.,"
Cressida Hogg, CPPIB's head of infrastructure, said in a joint
statement.
"This investment fits well with CPPIB's strategy to invest
in core infrastructure assets with long-term, stable cash flows
in key global markets," Hogg said.
The three pension funds and peers like Caisse de depot et
placement du Quebec, British Columbia Investment Management Corp
and Alberta Investment Management Corp manage vast amounts of
capital and have emerged in the last few years as big investors
in infrastructure assets outside Canada.
The fund managers, which are scouting for long-life
revenue-generating assets, have made significant bets in
physical assets like farmland, forests, ports, real estate and
hydro-electric power projects.
CPPIB, the largest of the group, managed net assets valued
at C$272.9 billion ($205 billion) as of the end of September. It
had invested about C$19.5 billion of that in infrastructure.
urn:newsml:reuters.com:*:nL1N1373C3
Ralph Berg, OMERS global head of infrastructure, said the
Skyway investment fit with the fund's goal of acquiring North
American infrastructure assets.
($1 = 1.3333 Canadian dollars)