Skip to main content

Michael Sabia, chief executive of Quebec's Caisse de Depot, announces the pension funds results for the year at a news conference, Wednesday, February 25, 2015 in Montreal.Ryan Remiorz/The Canadian Press

The Caisse de dépôt et placement du Québec is investing in a century-old natural gas transmission and storage company in the United States, part of a push to double its investment in infrastructure.

Canada's second largest pension fund said Friday that it would acquire part of Southern Star Central Corp., a Kentucky-based natural gas transporter with a network of pipelines 9,300 km long through states such as Texas, Wyoming and Missouri. The Caisse partnered with GE Energy Financial Services, the $16-billion (U.S.) investing and energy financing arm of General Electric Co.'s business, on this joint deal, and no terms were disclosed.

The move comes at a time when the Caisse is seeking to extend its investments in infrastructure. By 2019, the pension fund plans to boost its $10-billion (Canadian) infrastructure portfolio to about $20-billion. And the fund's chief executive Michael Sabia said in February that he projects the U.S. will account for much of that investment.

The deal for Southern Star appealed to the investors because of its location and quality, according to Macky Tall, senior vice-president of infrastructure at the Caisse. "The investment is fully aligned with our infrastructure investment strategy, because it will generate for la Caisse and its clients, stable and predictable returns over the long term," he said in a statement. The business provides stable cash flow, since many Southern Star customers have long term contracts.

The Caisse and GE are acquiring Southern Star from Morgan Stanley Infrastructure, which owned the business for five years. During that time, Morgan Stanley said it invested in the business, sourced new customers and improved public safety measures.

In the U.S., where governments are warming to external investments in infrastructure, the Caisse has already been active in recent years. In 2014, the pension fund invested $600-million for a stake in energy and utility business Indianapolis Power & Light Co. last year. And in 2011, it acquired a stake in U.S. oil pipeline Colonial Pipeline Company for $850-million.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 7:00pm EDT.

SymbolName% changeLast
E-N
Eni S.P.A. ADR
+0.79%31.72
GE-N
General Electric Company
-2.55%175.53
MS-N
Morgan Stanley
+0.71%94.16
S-N
Sentinelone Inc Cl A
+2.78%23.31

Interact with The Globe