Infrastructure

Borealis Infrastructure (Borealis) manages infrastructure investments for the OAC and is a world leader in developing infrastructure investing as an asset class for institutional investors. Borealis has a proven track record in identifying, investing and managing infrastructure investments around the world and has delivered solid returns, outperforming its benchmark in each of the last five years.

Infrastructure investing generally involves direct investments in inflation-sensitive assets that are critical to the long-term success of a modern industrial economy. Some infrastructure investments are subject to regulatory establishment of rates, service delivery levels or both. Individual investments generally require capital commitments for a minimum of 15 to 20 years and typically generate consistent annual cash flows – a perfect fit in meeting our long-term pension obligations. Since starting Borealis in 1999, we have become a significant investor in the infrastructure sector. Our assets include majority or minority positions alongside other pension, corporate and government investors.

Borealis’ investments generated net investment income of $731 million in 2009, compared with $596 million a year earlier. The 2009 return based on investment income before investment management expenses and on the Borealis asset mix exposure was 10.9 per cent, compared with 9.0 per cent for the benchmark and an 11.5 per cent return in 2008. The strong, stable returns generated by Borealis’ infrastructure investments over the past three years (especially with the significant decline in global public equity markets) illustrates that our strategy of allocating a significant portion of the Plan’s investment portfolio to infrastructure investments continues to be a successful strategic initiative.

Visit the Borealis Infrastructure web site at http://www.borealisinfrastructure.com/