A truck hauling a shipping container leaves the DP World Center container terminal at the Port of Vancouver on Sept. 3, 2020.DARRYL DYCK/The Globe and Mail
Caisse de dépôt et placement du Québec is more than doubling its port-investment program with Dubai-based DP World, with the two planning to invest an additional US$4.5-billion in global shipping.
“We love this partnership,” Emmanuel Jaclot, the head of infrastructure at the Caisse, said in an interview Thursday. “It’s worked, and we’re doing it again.”
The Caisse and DP World formed their venture in 2016 with a plan to invest US$3.7-billion, with DP World owning 55 per cent and the Caisse holding the remainder. Since then they’ve bought 10 shipping facilities, including container terminals in Vancouver, operations in Prince Rupert, the Fraser Surrey Docks, as well as four ports in Australia and three in Latin America. Mr. Jaclot says the partners have now invested nearly all of the initial money.
With the new capital, they’ll enter new regions such as Europe and Asia Pacific, Mr. Jaclot said. The partners will also consider more startup ports – its previous investments have been in existing ports of various age.
Ports and shipping have been dinged in the global economic downturn from COVID-19, but they’ve “shown pretty good resilience,” Mr. Jaclot said. An economic barometer co-sponsored by the International Association of Ports and Harbors showed that by mid-July, 50 per cent of ports surveyed reported that they were seeing normal levels of container ships.
DP World’s operating income fell 18 per cent in the first half of 2020, compared with the same period in 2019, according to Refinitiv.
DP World was a public company until earlier this year, when its parent Port and Free Zone World bought the roughly 20 per cent of DP World shares that traded on the Nasdaq Dubai. The government’s investment arm, Dubai World, is DP World’s ultimate parent.
At the time, DP World chairman Sultan Ahmed Bin Sulayem said it was delisting to focus on its medium-to-long-term strategy to expand from ports and invest in industrial parks, transportation and other logistics, according to Reuters. “The demands of the public market for short-term returns ... are incompatible with this industry,” Mr. Bin Sulayem said.
That’s a common theme from pension plans, sovereign wealth funds and other big institutional investors, which say they have the big amounts of capital and long-term view that allow them to drop hundreds of millions of dollars on infrastructure assets.
Mr. Jaclot says the Caisse’s infrastructure portfolio is about one-half energy and 40 per cent transportation, with the remainder in a number of categories, including telecom.
“Our view is positive about the prospects for global trade, and the role of ports,” he said.
The Caisse reported net assets of $333-billion at the end of June. The Montreal-based institution, Canada’s second-biggest pension fund, posted a negative return of 2.3 per cent for the first half of the year, hit largely by its exposure to shopping centres amid the coronavirus crisis.
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David Milstead