Infrastructure

Borealis Infrastructure (Borealis) manages our infrastructure investments 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 three years.

Infrastructure investing 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 $596 million in 2008, compared with $595 million a year earlier. The 2008 return was 11.5 per cent, compared with 9.8 per cent for the benchmark and a 12.7 per cent return in 2007. The strong, stable returns generated by Borealis’ infrastructure investments over the past three years, especially with the significant decline in global public equity markets, illustrate that our strategy of allocating 20 per cent of the Plan’s long-term asset mix target to infrastructure investments has been a success.

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