L.F. Wade International Airport

Connor, Clark & Lunn Infrastructure (“CC&L Infrastructure”) today announced the acquisition of a 49.9% minority interest in Bermuda Skyport Corporation Limited (“Skyport”) from Aecon Group Inc. (“Aecon”), the concessionaire for the L.F. Wade International Airport (the “Bermuda International Airport”). Aecon is a leading Canadian construction and infrastructure development company, which will continue as majority owner and operator of the airport. The purchase price for the acquired interest is US $128.5 million, and the transaction remains subject to a number of closing conditions which the parties expect will be satisfied in the coming weeks.

The Bermuda International Airport provides sole aviation access to the island for both international travelers and Bermudians alike. This modern, world class airport with a new state-of-the-art passenger terminal building is supportive of Bermuda’s growing tourism industry and its status as a global financial center. The facility was constructed with environmentally efficient lighting, cooling, and wastewater systems, and was built to withstand extreme weather conditions common to island nations.

The redevelopment of the Bermuda International Airport was completed in 2020 under a concession agreement between Skyport, a wholly-owned subsidiary of Aecon, and the Bermuda Airport Authority. Skyport is responsible for the operation, maintenance, and commercial functions of the airport and coordinates the overall airport redevelopment project under the concession agreement, which has 24 years remaining on its original 30-year term.

“We are excited to expand to a new sector and geography with the addition of this interest in a world-class airport,” said Matt O’Brien, President of CC&L Infrastructure. “This investment is consistent with our strategy of investing in high-quality, long-duration assets in creditworthy jurisdictions. The L.F. Wade International Airport is an excellent example of a resilient, durable asset with potential for growth as passenger traffic recovers in the wake of COVID-19 – providing an attractive complement to our existing, well-diversified portfolio of infrastructure assets.”

“We believe that Bermuda is a strong jurisdiction for investment and are excited to be partnered with Aecon and the team at Skyport in the delivery of a high-quality airport offering to the Government and people of Bermuda,” added Ryan Lapointe, Managing Director of CC&L Infrastructure. “As a long-term investor, we look forward to working with our partners at Aecon and the Government of Bermuda in the continued successful operation of the Bermuda International Airport for many years to come.”

CIBC Capital Markets is serving as exclusive financial advisor and Torys LLP is serving as legal counsel to CC&L Infrastructure on the transaction.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with attractive risk-return characteristics, long lives and the potential to generate stable cash flows. To date, CC&L Infrastructure has accumulated over $5 billion in assets under management diversified across a variety of geographies, sectors, and asset types, with over 90 underlying facilities across over 30 individual investments. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage more than CAD$100 billion in assets. For more information, please visit www.cclinfrastructure.com.


Vrushabh Kamat
Connor, Clark & Lunn Infrastructure
(437) 928-5184
[email protected]

Connor, Clark & Lunn Infrastructure (CC&L Infrastructure) and its partner, Alpenglow Rail (Alpenglow), today announced the acquisition of Alberta Midland Railway Terminal (AMRT), a short-line rail terminal located in Lamont County, Alberta that provides critical first and last mile transportation and logistics solutions to an established local customer base. This is the latest investment through a partnership established by CC&L Infrastructure and Alpenglow in 2019 that has since grown to include six rail terminals across Canada and the United States (U.S.).

AMRT, which has the capacity to store over 1,400 railcars on approximately 300 acres of property, is strategically located to serve one of the largest industrial hubs in North America, composed of 40+ industrial facilities representing over $40 billion in investments. AMRT is served by both CN and CP (the only Class I railroads in the region), and is situated in close proximity to industrial markets and large-scale customers, making the terminal integral to local supply chains.

“Our rail business has continued to deliver strong performance throughout the turbulent market conditions we have experienced over the past three years and AMRT represents an important addition to our growing rail investment portfolio,” said Matt O’Brien, President of CC&L Infrastructure. “We look forward to working alongside our partners at Alpenglow to drive further growth at AMRT and create long-term value across our broader rail business.”

This investment further advances CC&L Infrastructure and Alpenglow’s plan to develop and operate a diversified portfolio of rail businesses across North America. With the acquisition of AMRT, the partnership comprises three terminals in the U.S. Gulf Coast and three terminals in Canada, providing a diverse array of services to a blue-chip corporate customer base. 

“We are excited to expand our North American presence with the acquisition of AMRT,” said CEO of Alpenglow, Rich Montgomery. “We see opportunity to leverage our expertise to pursue significant growth including new customer service offerings. AMRT has some unique features that are difficult to replicate, including dual Class I service, a strategic location in Alberta’s premier industrial hub, and ample land for development and expansion. These features coupled with our proven approach focused on customer service and safety provides potential to add significant value over the life of the asset.”

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with attractive risk-return characteristics, long lives and the potential to generate stable cash flows. To date, CC&L Infrastructure has accumulated over $5 billion in assets under management diversified across a variety of geographies, sectors, and asset types, with over 90 underlying facilities across over 30 individual investments. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage approximately CAD$98 billion in assets. For more information, please visit www.cclinfrastructure.com.

About Alpenglow Rail

Alpenglow Rail develops and manages freight rail businesses and related transportation assets across North America. Alpenglow Rail currently owns and operates six rail terminals strategically located in leading industrial markets within Canada and the U.S. Gulf Coast. Alpenglow Rail was founded by seasoned railroad executives Rich Montgomery, Darcy Brede, Henning von Kalm, and Josh Huster. For more information, please visit www.alpenglowrail.com.


Vrushabh Kamat
Connor, Clark & Lunn Infrastructure
(437) 928-5184
[email protected]

Rich Montgomery
Alpenglow Rail
(720) 328-0944
[email protected]

Connor, Clark & Lunn Infrastructure (CC&L Infrastructure) and CarbonFree Technology are pleased to announce the closing of approximately USD$360 million in debt financing facilities for their portfolio of utility-scale solar projects located in Chile. The financings are comprised of a $19mm letter of credit facility, a $71mm bridge-loan facility which will be used to fund ongoing construction costs, and a ~$270mm private placement facility whose proceeds will be used primarily to refinance existing bank debt and repay the bridge-loan facility once projects complete construction. The private placement issuance has been rated BBB+ by S&P and was well oversubscribed by a syndicate of large North American financial institutions.

“We are excited to complete this refinancing, one of the largest solar project private placements in Chile to date,” said Matt O’Brien, President of CC&L Infrastructure. “The aggregation, de-risking and successful construction of individual, small-scale projects is the culmination of a multi-year strategy, allowing us to secure long-term financing at competitive rates and create value for our investors. Our base of Chilean solar assets is part of our large and rapidly growing energy transition portfolio that aggregates over 1.5 gigawatts of renewable assets across a range of clean energy technologies.”

Since making their initial investment in Chile in 2017, CC&L Infrastructure and CarbonFree have significantly expanded their portfolio, with 37 individual ground-mounted solar projects in operation and a further 16 projects currently under construction or expected to begin construction shortly. The total Chilean solar portfolio is comprised of approximately 360 megawatts (MW) of generation, including more than 250 MW of operating projects and 110 MW of projects currently in or about to enter construction. The portfolio is forecast to be fully operating by the second half of 2023.

“Chile is making excellent progress towards the country’s 2030 clean energy and decarbonization targets, in addition to their overarching goal of net zero carbon emissions by 2050. We’re pleased that our portfolio of solar projects can contribute to this leadership on climate action, as well as provide Chilean citizens with affordable electricity for years to come,” said David Oxtoby, CEO of CarbonFree.

The power generated by these projects is sold at stabilized prices under Chile’s Pequeños Medios de Generación Distribuidos (PMGD) program and is transmitted to the grid through transmission infrastructure owned by local distribution companies. Once the full portfolio has been completed, the facilities will be capable of producing more than 750,000 MW hours of clean electricity annually.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with attractive risk-return characteristics, long lives and the potential to generate stable cash flows. To date, CC&L Infrastructure has accumulated over $5 billion in assets under management diversified across a variety of geographies, sectors, and asset types, with over 90 underlying facilities across over 30 individual investments. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage approximately CAD$96 billion in assets. For more information, please visit www.cclinfrastructure.com.

About CarbonFree Technology

CarbonFree Technology is a member of the CarbonFree Group of Companies based in Toronto, Canada and Santiago, Chile. CarbonFree develops, finances, manages construction, operates and owns solar projects and is active in Canada, the United States and Latin America. Over the past 15 years, the company has developed more than 120 solar power projects with a total capacity of more than 660 MW. For more information, please visit www.carbonfree.com.


Vrushabh Kamat
Connor, Clark & Lunn Infrastructure
(437) 928-5184
[email protected]

Daniel Soper
CarbonFree Technology
(416) 975-8800 x603
[email protected]

Connor, Clark & Lunn Infrastructure (“CC&L Infrastructure”) and Régime de rentes du Mouvement Desjardins, represented by Desjardins Global Asset Management (collectively, “Desjardins”) are pleased to announce the acquisition of a majority interest in the Rt. Hon. Herb Gray Parkway (“the Project” or “the Parkway”), from ACS Infrastructure Canada (“ACS”), Fluor Canada Ltd. (“Fluor”), and Acciona Concesiones S.L (“Acciona”). Each of ACS, Fluor, and Acciona will retain a minority equity interest, and an O&M company formed by ACS and Fluor will provide operations and maintenance service to the Project going forward.

The Rt. Hon. Herb Gray Parkway project is a public-private partnership (P3) between Windsor-Essex Mobility Group and the Province of Ontario.  The Project encompasses an approximately 11km corridor through the Windsor, Ontario area, including a six-lane highway with several adjacent service roads, interchanges, structures, pumping stations, and recreational areas. Distinct from many other P3 highway projects, the Parkway includes approximately 300 acres of green space, as well as active maintenance, monitoring, and reporting on various environmental features and amenities, including vegetation, ~20km of paved trails for pedestrians and cyclists, and a multi-use lit pathway.

 “Our investment in the Rt. Hon. Herb Gray Parkway aligns with our strategy of acquiring interests in high-quality, long-lived, resilient infrastructure assets with strong, creditworthy counterparties and operating partners,” said Matt O’Brien, President of CC&L Infrastructure. “We thank our co-investment partner, Desjardins and our new operating and equity partners, ACS, Fluor, and Acciona.  We look forward to working with these partners and the Province of Ontario toward the successful, long-term operation and maintenance of this important asset.”

“Desjardins is pleased to acquire an interest in the Rt. Hon. Herb Gray Parkway project through the Régime de rentes du Mouvement Desjardins. The plan participants expect consistency and stability within the infrastructure portfolio, and we look forward to continuing to meet those expectations with investments in high quality, long-duration assets such as the Parkway.  We are also pleased to continue expanding our long-term relationship with CC&L Infrastructure, and to be partnered with experienced investors and operators at ACS, Fluor, and Acciona.” added Frédéric Angers, Vice President and Head of Infrastructure Investments at Desjardins Global Asset Management.

Procured in 2010 by Infrastructure Ontario, the Rt. Hon. Herb Gray Parkway began operation in 2015 and has since been an essential part of a high-traffic trade artery between Canada and the United States. The Project has a 30 year availability-based concession agreement in place with Infrastructure Ontario, with approximately 23 years remaining.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with attractive risk-return characteristics, long lives and the potential to generate stable cash flows. To date, CC&L Infrastructure has accumulated over $5 billion in assets under management diversified across a variety of geographies, sectors, and asset types, with over 90 underlying facilities across over 25 individual investments. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage approximately CAD$96 billion in assets. For more information, please visit www.cclinfrastructure.com.

About Desjardins Global Asset Management Inc. (DGAM)

Established in 1998, Desjardins Global Asset Management (DGAM) is one of Canada’s largest asset managers with in-house expertise in equity, fixed income and real assets (infrastructure, real estate) across a variety of investment vehicles. DGAM manages over CAN$86.5 billion (as at March 31, 2022) in institutional assets on behalf of insurance companies, pension funds, endowment funds, non-profit organizations and corporations across Canada. For more information, please visit https://www.desjardins.com/ca/about-us/desjardins/governance-democracy/structure/desjardins-asset-management/index.jsp.


Vrushabh Kamat
Connor, Clark & Lunn Infrastructure
(416) 862-8079
[email protected]

Connor, Clark and Lunn Infrastructure (CC&L Infrastructure), EDP Renewables North America (EDPR NA), and Hoosier Energy are celebrating American Clean Power Week as construction winds down at the 200-megawatt (MW) Riverstart Solar Park in Indiana, which will be the largest solar array in the state upon completion.

Located 80 miles northeast of Indianapolis, the solar park has brought hundreds of jobs to Randolph County with approximately $180 million in capital investments. When operational, Riverstart Solar Park will power the equivalent of more than 36,000 average Indiana homes annually.

Over the project’s lifetime, millions of dollars in property tax payments will be disbursed to school districts and local governments. Riverstart has a 20-year purchase power agreement (PPA) with Bloomington-based Hoosier Energy, which will use energy produced from the project to power communities throughout central and southern Indiana and southeastern Illinois. The agreement will help diversify the electric grid and add to Indiana’s growing portfolio of renewable energy projects.

“Riverstart Solar Park will provide an economical source of renewable energy for the next two decades and is a great fit for our members’ long-term needs,” said Donna Walker, Hoosier Energy President and CEO. “Hoosier Energy appreciates the collaboration with EDPR and CC&L Infrastructure and looks forward to working with them to make this project a success.”

Hoosier Energy is a not-for-profit generation and transmission cooperative that provides electric power and services to 18 not-for-profit electric distribution cooperative owners. The 18 cooperative members serve more than 760,000 consumers.

The solar project’s construction has already created hundreds of jobs for Hoosiers and continues to bring well paying jobs to the area. Riverstart has also led to millions of dollars of spending within 50 miles of the project— boosting the local economy and supporting local businesses and families. The project will also complement the area’s agricultural resources with a stable, weather-proof cash crop in the form of landowner lease payments.

“CC&L Infrastructure and our investment partner, Desjardins Group, are pleased to own and operate this largescale solar project alongside EDPR,” said Matt O’Brien, President of CC&L Infrastructure. “As long-term investors, we believe in responsible investment. CC&L Infrastructure is focused on investing in essential infrastructure projects that support local communities while creating value for customers, employees and investors. We look forward to working together to supply Hoosier and Randolph County with solar power for the decades to come.”

“EDP Renewables is proud to bring investments, jobs, economic growth, and renewable energy to Indiana,” said Miguel Prado, CEO of EDP Renewables North America. We are grateful for the collaboration with Hoosier Energy and CC&L Infrastructure, who made the Riverstart Solar Park possible, and we are thrilled to see the positive impact solar power has had on the Randolph County community and the state of Indiana as a whole.”

Riverstart Solar Park is expected to begin operations before the end of 2021. EDPR NA has 1,199 MW of operational renewable energy capacity in Indiana, which represents one-third of all renewable energy capacity installed in the state. Through the company’s dedication to sustainability measures, Indiana is one step closer to a cleaner, brighter future.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with highly attractive risk-return characteristics, long lives and the potential to generate stable cash flows. The firm has been an active investor and owner of traditional and renewable energy assets for more than 15 years. Its portfolio includes more than 60 hydro, solar, and wind facilities totaling 1.4 GW of clean energy generating capacity globally. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi boutique asset management firm whose affiliates collectively manage approximately CAD$100 billion in assets.

For more information, please visit www.cclinfrastructure.com.

About EDP Renewables North America

EDP Renewables North America LLC (EDPR NA), its affiliates, and its subsidiaries develop, construct, own, and operate wind farms and solar parks throughout North America. Headquartered in Houston, Texas, with 58 wind farms, eight solar parks, and seven regional offices across North America, EDPR NA has developed more than 8,300 megawatts (MW) and operates more than 8,000 MW of onshore utility-scale renewable energy projects. With more than 800 employees, EDPR NA’s highly qualified team has a proven capacity to execute projects across the continent.

For more information, visit www.edpr.com/north-america.

About EDP Renewables

EDP Renewables (Euronext: EDPR), is a global leader in the renewable energy sector and the world’s fourth-largest renewable energy producer. With a sound development pipeline, first class assets, and market-leading operating capacity, EDPR has undergone exceptional development in recent years and is currently present in 17 international markets (Belgium, Brazil, Canada, Chile, Colombia, France, Greece, Hungary, Italy, Mexico, Poland, Portugal, Romania, Spain, the United Kingdom, the United States, and Vietnam).

EDPR is committed to furthering social advances in terms of sustainability and integration. This is reflected by the inclusion of the company in the Bloomberg Gender Equality index and the fact that it has been certified as a Top Employer 2020 in Europe (Spain, Italy, France, Romania, Portugal, and the United Kingdom) and a Top Workplace 2020 in the United States, both of which recognize its employee-driven policies.

Energias de Portugal, S.A. (EDP), the principal shareholder of EDPR, is a global energy company and a leader in value creation, innovation, and sustainability. EDP has been included in the Dow Jones Sustainability Index for 13 consecutive years.

About Hoosier Energy

Founded in 1949, Hoosier Energy is a generation and transmission cooperative (G&T) with headquarters in Bloomington, Indiana. The G&T provides electric power and services to 18 member distribution cooperatives in central and southern Indiana and southeastern Illinois. We are a community-focused organization that works to efficiently deliver affordable, reliable and safe energy. Collectively, our 18 members serve more than 760,000 consumers. Hoosier Energy is an equal opportunity provider and employer.

For more information, visit www.hoosierenergy.com.


Kaitlin Blainey
Connor, Clark & Lunn Infrastructure
(416) 216-8047
[email protected]

Connor, Clark & Lunn Infrastructure (CC&L Infrastructure) today announced the formation of a strategic partnership with Hy Stor Energy LP (Hy Stor Energy), which will develop, commercialize and operate green hydrogen production, storage, and distribution at scale.

Hy Stor Energy is developing a portfolio of large-scale, fully integrated green hydrogen projects in the United States. The projects will include the on-site production, storage, and delivery of green hydrogen as both a
zero-carbon fuel and a means of storing and producing electricity on demand. This combination of storage and scale will be critical in accelerating the green hydrogen economy in the United States and will support the nation’s transition to a net zero carbon emissions future.

Hy Stor Energy is already permitted for hydrogen storage at multiple locations in the U.S. Gulf Coast, which together will form the backbone of a regional hub. This hydrogen hub will have co-located production, transmission, pipeline, rail and other infrastructure, linking these components to add value while driving economies of scale and attracting end-users. The hub is also expected to attract intellectual capital, spur innovation, create jobs and stimulate the local economy. It will deliver a major source of safe, reliable and 100% carbon free energy that is flexible and available on demand.

“CC&L Infrastructure is excited to further participate in the global energy transition with this partnership,” said Matt O’Brien, President of CC&L Infrastructure. “We believe that the green hydrogen sector is nearing an important inflection point and that its growth will contribute meaningfully to the achievement of net zero carbon emissions targets over the coming decades. The partnership with Hy Stor Energy is a natural evolution of our long-term investment strategy that builds upon our existing expertise in renewable energy. Through this partnership, CC&L Infrastructure and its clients will gain access to a number of attractive investments in a rapidly growing renewable sub-sector as well as technical expertise in green hydrogen and energy storage.”

“Hy Stor Energy is solving the unique challenges of a world transitioning to renewable energy, and we’re developing a model for producing, storing and delivering 100% carbon-free green hydrogen reliably, consistently – and at scale,” said Laura Luce, CEO of Hy Stor Energy. “Our partnership with CC&L Infrastructure will enable us to advance the large-scale development and commercialization of green hydrogen and long-duration storage.”

Green hydrogen is a zero-carbon fuel source and an energy storage mechanism. It is created using renewable energy and a process called electrolysis. Electrolysis uses only two inputs – water and renewable electricity – to produce hydrogen with zero emissions and with oxygen as the only byproduct. Green hydrogen is expected to play a critical role in the global shift away from fossil fuel based sources of energy. Specifically, it can enable the decarbonization of sectors where direct electrification is not practical, offering a viable path towards zero emissions for many industries and jurisdictions.

CC&L Infrastructure’s investment mandate targets traditional and energy infrastructure assets and companies, including power generation, electricity transmission and distribution, and energy storage, among other projects. The firm is an active investor and owner of renewable energy assets and has a current portfolio totaling 1.4 GW of clean energy generating capacity globally. The majority of these assets were acquired during development and the CC&L Infrastructure team has significant experience in both construction oversight and ongoing asset management. The partnership with Hy Stor Energy will build upon this expertise to support further decarbonization efforts and the global energy transition.

About Connor, Clark & Lunn Infrastructure

CC&L Infrastructure invests in middle-market infrastructure assets with highly attractive risk-return characteristics, long lives and the potential to generate stable cash flows. The firm has been an active investor and owner of renewable energy assets for more than 15 years. Its portfolio includes more than 60 hydro, solar, and wind facilities totaling 1.4 GW of clean energy generating capacity globally. CC&L Infrastructure is a part of Connor, Clark & Lunn Financial Group Ltd., a multi-boutique asset management firm whose affiliates collectively manage over CAD$100 billion in assets. For more information, please visit www.cclinfrastructure.com.

About Hy Stor Energy

Hy Stor Energy is facilitating the transition to a fossil-free energy environment by developing and advancing green hydrogen at scale through the development, commercialization, and operation of green hydrogen hub projects. Large, fully integrated projects produce, store, and deliver 100% carbon-free energy, providing customers with safe and reliable renewable energy on-demand. Developed as part of an integrated hub, these projects couple on-site green hydrogen production with integrated long-duration storage and distribution – using scale to reduce costs. Hy Stor Energy, led by energy storage industry and hydrogen technology veteran Laura L. Luce, has an innovative team with deep expertise and is positioned as a leader in the green hydrogen revolution. For more information, please visit www.hystorenergy.com.


Kaitlin Blainey
Connor, Clark & Lunn Infrastructure
(416) 216-8047
[email protected]

Crestpoint Real Estate Investments Ltd. (Crestpoint) announced today the acquisition of the Junction Shopping Centre in Mission, British Columbia. The Junction Shopping Centre is a 300,612 square foot tier-one grocery and drug-store anchored shopping centre situated at the junction of Lougheed Highway and Abbotsford-Mission Highway, approximately 70 km east of Vancouver.

The property is currently 98% leased to a strong roster of over 40 national and regional daily needs tenants. It is anchored by Save-on-Foods and London Drugs and has a diverse roster of ancillary tenants including Winners, Cineplex, Goodlife and Starbucks. Overall, the Junction offers a tenant mix well‐suited to local demographics providing an attractive mix of daily needs retail with grocery, pharmacy, liquor, financial services, health and personal care, entertainment and discount retailers.

“We’re very pleased to partner with Anthem Properties on this acquisition and to be adding such a high quality and stable retail asset to our diversified Core Plus Real Estate Strategy. With grocery and pharmacy anchors, the service oriented nature of the Junction Shopping Center is a great addition to our well-diversified and growing retail portfolio in Western Canada.” said Devon Howsam, Vice President, Acquisitions & Asset Management, Crestpoint Real Estate Investments Ltd.

About Crestpoint Real Estate Investments Ltd.

Crestpoint Real Estate Investments Ltd. is a commercial real estate investment manager, with $6.3 billion of gross assets under management, dedicated to providing investors with direct access to a diversified portfolio of commercial real estate assets. Crestpoint is part of the Connor, Clark & Lunn Financial Group, a multi-boutique asset management company that provides investment management products and services to institutional and high net-worth clients. With offices across Canada and in Chicago, and London, Connor, Clark & Lunn Financial Group and its affiliates are collectively responsible for the management of over $100 billion in assets. For more information, please visit: www.crestpoint.ca.


Kevin Leon
Crestpoint Real Estate Investments Ltd.
(416) 304-6632
[email protected]

In this special commentary, we discuss the evolving Evergrande situation. While we do not hold Evergrande in our portfolio, we wanted to share our views because it is the most indebted real estate company in the world, and has created lots of volatility in the global financial market.

Background on Evergrande

Evergrande is the second largest property developer in China in terms of sales value. The company has 160,000 employees and close to 4 million employees related to Evergrande’s activities. It has a total debt of RMB 2 trillion (around USD $300 billion, equivalent to 1% of deposits in China, and almost 2% of China’s GDP), including interest-bearing debts of RMB 571 billion, pre-sale of RMB 216 billion, payables of RMB 963 billion, and wealth management products of RMB 100 billion. It is one of the most levered real estate companies in the world, but its debt is still minor in relation to China’s financial system as a whole. Considering the above data, we believe China’s financial system can absorb, without any mayor problem, all the losses from this company.

Potential of creating a contagion effect on the broader global financial markets?

This is not another Lehman. We think the contagion effect on the broader global financial markets is limited. The Evergrande saga remains a domestic issue. The Chinese government has enough capacity to intervene and will do so to reduce the contagion risk.

The recent news is an example: Evergrande reached an agreement with yuan bondholders on an interest payment due September 23, 2021, without clarifying the terms. The Chinese government injected RMB 120 billion into the banking system on September 22, 2021.

The major risk is a contagion to other developers, banks, suppliers, holders of Evergrande’s wealth management products, and home buyers. A possible scenario is that the government could take over the problem companies with state-owned enterprises (SOE).

As the property policy is unprecedentedly tight at this moment, the government has plenty of room to loosen if they want. It is likely that they are willing to wait in order to show that the real estate sector is not “immune” but that they can come in at any time in order to preserve financial stability. Many loans to Evergrande made by Chinese banks are implicitly backed by the government. We believe that the first priority for the government is to ensure that the pre-sold apartments are delivered to the buyers, otherwise, there will be serious social unrest.

Regulatory headwinds coming from China

The key words for China’s policy is currently “Common Prosperity,” which fundamentally entitles a policy shift towards reducing wealth inequality. The concept is not new; it has been a long-term goal of the Chinese government that has become more relevant recently.

The Central Party and State Council jointly announced the plan on June 10, 2021, establishing Zhejiang province as the pilot zone. The 14th five-year plan (2021-2025) called for an “action plan” to be fully implemented by 2050, to become an advanced, modern economy. Among common prosperity goals are narrowing the income gap, tackling the increasing real estate prices, promoting higher household income growth, increasing public services, such as healthcare and education, and improving living conditions of rural residents, among many others. These common prosperity initiatives will likely rebalance the economy from investments to consumption, targeting the midlow-income population. Moreover, the state’s role in public and private sectors is likely to become more relevant.

In the upcoming Politburo meeting this December, policymakers will set priorities for next year.


Examples of contagion risks:

  1. Other developers will find financing more difficult, if investors lose confidence in them. Project sales will also become more difficult. As a matter of fact, the selling prices of properties are controlled by the governments, so developers are not able to sell their properties at discounts.
  2. Suppliers should be more cautious on payment terms and conditions on other developers. They would also see lower demand and production. Some may need to cut jobs or wages, causing weaker household consumption.
  3. Home buyers (more than a million) are also heavily protesting at Evergrande’s offices causing their construction projects to be halted. Home buyers that are working with other developers may also doubt their houses would be delivered, therefore, causing more selling pressure.
  4. Local governments receive transfers from the central government with bond issues via Local Government Financing Vehicle (LGFV) which are collateralized with land use rights. Raising funds for local governments could eventually become more complicated.
  5. More default scenarios of individual companies are also likely to occur. For example, Sinic (2103 HK) was implied to have financial problems, and the stock slumped 87% on September 20, 2021.

Chinese government successfully resolved the interbank credit crunch in 2013. Tools that the
government could use this time:

  • Easing liquidity: RRR cut, liquidity injection
  • Verbal support
  • Controls of LGFV financing likely to become less tight
  • Loosening of property policy
  • Accelerating LG bonds
  • Maintaining low rates
  • Persuading banks to lend

The systemic risk is not high.

  • Although Evergrande has a larger balance sheet (RMB 2.4 trillion) than Huarong (RMB 1.6 trillion) and Anbang (RMB 1.5 trillion), its asset contains largely land lots which are much more “tangible than the other financial companies.”
  • Since the government controls the financial system, many SOEs could be strategic investors of Evergrande and also adjust the property policies.
  • When the People’s Bank of China (PBoC) initiated its support to the property sector (printing money) in-mid 2014, it granted a long term loan to China development bank. PBoC said at that time, “A change emerged in the base money supply channel.”
  • The government could buy their own land, as they did in 2014-2015.
  • In the case of Evergrande, the government can let them fall, avoiding a contagion or make an orderly debt restructuring. In similar cases they have taken actions. In the case of Anbang, several SOEs took up the company and formed a new insurance company. In the case of Huarong, Citic Group (a SOE) and other “strategic” investors capitalized the company.

Thoughts on the stock market

It is worth noting that the Chinese government seems to have downplayed the importance of paying too much attention to short-term growth. They indeed have a short-term buffer, considering the 2021 GDP target is “above 6%,” and the country is likely to grow in the range of 8% this year. The current outlook is more focused on solving structural problems, which may have short-term collateral consequences, but the vision is to improve the long-term perspective. Indeed, President Xi has emphasized on numerous occasions that the aforementioned long-term goals are not just an economic objective, but serve as the Party’s “governing foundation”. The foregoing is still interesting, since, as previously mentioned, the Western vision is often different. Billions of dollars have been lost in market capitalization of the Chinese assets sector, driven by strict regulatory policy in the afterschool tutoring, together with anti-monopoly and cybersecurity rules in the internet sector. The government has also tightened property policies. Currently, a blanket of uncertainty persists regarding “which sector will be regulated next.” For example, almost one month ago, a state media article equated the gaming industry, which has many companies that trade on the stock market, to “opium”. Although the government quickly quashed this article and there were no official statements, it caused a rapid slump of shares linked to the gaming sector, reflecting the prevailing nervousness among investors. The government recently released new regulations for the industry, including limiting the amount of time children can play video games to three hours a week, and last week state media mentioned that companies should avoid the sole focus of pursuing profit, in order to prevent minors from becoming addicted to games. This sentiment led to another round of losses in gaming-related stocks.

We believe China is trying to improve its society in the long term, but are not very concerned about the effect this may have on investors in the short term. The question then is; how can we better cope and adjust to these policies for the benefit of our clients? China accounts for around 10% of the MSCI EM Small Caps index, making it an important investment for our EM Small Cap fund. Our approach to this new environment is to understand the domestic perspective and invest in companies/sectors that are subject to less regulation and more likely to benefit from the new trends that we see emerging in the future. Each scenario presents a new opportunity and the trends include:

  • Greater self-reliance on government-fostered technology (semiconductors, artificial intelligence);
  • Renewable energy;
  • Fitness;
  • Consumption favouring local brands/companies; and
  • Manufacturing industry and robotics for products designed mainly to support and strengthen the Chinese economy.

The global pandemic has caused a sharp, worldwide economic contraction, with supply and demand severely affected across many industries. However, the real estate market was one of the few to experience strong and sustained growth in 2020 and 2021. House prices rose consistently, driven by robust demand and constrained supply.

On the demand side, buyer interest has surged since summer 2020, as people are scrambling to take advantage of low mortgage rates due to fear of missing out. According to the Mortgage Bankers Association (MBA), in the United States (US), the value of mortgage originations for new purchases increased by 13% in 2020, in comparison to 2019, despite the fact that most economic activities were effectively halted in April and May 2020. As America’s biggest generation, millennials have entered their prime years of purchasing power, driving the demand for houses even further. On top of that, as people spend more time at home during the pandemic, demand for bigger spaces increased significantly.

On the other hand, supply has been extremely tight. In the US, months of supply in July 2021 was 2.6, which is an increase from the record low of 1.9 in January 2021, but still at a historically low level. Historically, a balanced market has been defined as 6.0 months of supply. Even before the pandemic, there was a shortage of homes for sale. From 2010 to 2019, the US had the lowest number of homes built than any other decade since the 1960s.[1] From 2010 to 2019, only 5.8 million homes were built, compared to over 27 million homes built from 2000 to 2009. Strong demand for housing in recent years, fueled by low mortgage rates, has exaggerated the imbalance of supply and demand. As a result, house prices keep going up.

The strong residential market is not limited to the US. In the United Kingdom (UK), house prices have been increasing consistently since May 2020. In June 2021, the average house price was £266,000, up 13.2% year over year and 4.5% month over month. This is partially due to the stamp duty holiday introduced in July 2020 to help homebuyers and boost the UK property market during the pandemic. Even though the stamp duty holiday will gradually taper from July 2021, demand still outstrips supply, and prices are expected to stay on the upward trend. One of our holding companies, Savills (SVS LN), has been benefiting from this trend. Founded in 1855, Savills is one of the world’s leading property service providers for both residential and commercial properties. They have a dominant position in many markets across the globe, with more than 600 offices across the Americas, Europe, Asia Pacific, Africa, and the Middle East. In the first six months of 2021, Savills hit record profits thanks to the hot UK housing market, with revenue in the country having increased by 40% year over year.

This housing boom has been positive news for homeowners; CoreLogic analysis shows homeowners with mortgages (roughly 62% of all properties) in the US have seen their equity increase by a total of $1.9 trillion  since the first quarter of 2020, an increase of 19.6% year over year. However, it has also reduced housing affordability, and shut a growing number of people out of the housing market. In the US, homeownership has been falling after its previous peak of 69% in 2004.[2] In the second quarter of 2021, homeownership dropped to 65.4%, which is 2.5 percentage points lower than in Q2 2020. The rate varies significantly by race, with the biggest gap observed between non-Hispanic white households and Black households, homeownership rates for which were 74.2% and 44.6%, respectively. If the trend continues, the US homeownership rate will decline to 62% by 2040.

Therefore, it is crucial to increase the supply of affordable homes to meet the needs of future homeowners and renters. Century Communities (CCS US), a top ten national homebuilder and a holding company in our portfolios, focuses on affordable homes. Entry-level buyers represent 80% of their total deliveries. A total of 43% of the homes are under the price of US $250,000, and close to 90% of homes are under the price of US $500,000. In the second quarter of 2021, the company’s home sales revenue increased by 34% to a record $1 billion, and net income increased by 207% to a record $117.9 million. The company has increased their revenue guidance for 2021, and remains confident in its success in the second half of the year.

It’s not just the home buyers, renters also faced a significant amount of financial stress. In the first quarter of 2021, 17% of all renter households in the US reported being behind on rent. This rate is 21% for Hispanic and 29% for Black renters. Several companies in our portfolio contribute to the rental market’s affordability.

Boardwalk Real Estate Investment Trust (BEI-U CN) is one of Canada’s largest multi-residential real estate owners and managers. Founded in 1984, the company owns 33,513 residential suits, concentrated in Alberta, Quebec, Saskatchewan, and Ontario. The REIT is committed to providing the best product quality and experience to their clients, at affordable prices. The average rent is approximately 20% of the average renter’s household income. Thanks to its strong brand of service at affordable prices, Boardwalk has been gaining market share, and maintained an above-market-average occupancy rate.

SBB (SBBB SS) is a Swedish-focused, social infrastructure property company. Of its portfolio, 94% is in rented residential and social infrastructure, including education, senior care, healthcare, and government/municipal buildings. The government backs 88% of the rent. As of Q2 2021, the company invests 27% of its social assets in affordable housing. The average rent levels for SBB’s rent-regulated residential portfolio is about 40% below the rent levels of new productions.

Advance Residence (3269 JP) is the largest residential REIT in Japan. They focus on compact apartments, mainly in Tokyo metropolitan areas; 64% of its portfolio are studio and one-bedroom properties, the rents for which are more affordable. Over 50% of the rents were below JPY 100,000 per month (approximately US $911). As a comparison, a typical mid-range, two-bedroom apartment in Tokyo is about US $1903 per month, according to a Deutsche Bank report.

Affordable housing is part of Goal 11 of the Sustainable Development Goals (SDGs). It’s also central to achieving almost all of the SDGs. The demand for affordable housing keeps growing, given the trend of urbanization and population growth. Investment in this theme will not only allow us to ride the secular trend, but also contribute to a more sustainable and inclusive future.  

[1] https://www.statista.com/statistics/1041889/construction-year-homes-usa/

[2] As defined by the US Census Bureau, the homeownership rate is the proportion of households that is owner-occupied.

Wind turbines in Navarre (Spain) Renewable energy concept.

Investing in private market infrastructure assets is an effective means of generating stable cash flow and long-term capital growth. Historically, this asset class has only been available to institutional investors with deep pockets. However, in recent years investment managers have started to provide their high-net-worth clients with opportunities to invest in this asset class.

In this article, we provide an overview of infrastructure investing, how we approach it, and the opportunity for investors. For information on other alternative asset classes, please read our Portfolio Guide – Beyond Stocks and Bonds.

What is infrastructure investing?

Infrastructure investing refers to making investments in physical, or “real”, assets that provide an essential product or service that is critical to society. Infrastructure assets are varied – from roads, rail, schools, and hospitals to power generation, energy transmission and distribution, and digital infrastructure. 

Typically, attractive assets share a number of key characteristics including long lives, low competition and high barriers to entry. When combined with predictable revenue streams – often from contracts with government counterparties or counterparties with high credit ratings – this makes infrastructure investing a source of portfolio stability and return.  

Understanding the opportunity for investors

While institutional investors have long embraced infrastructure investing, it is a less familiar option for high-net-worth investors, given the complexity and high cost associated with access to the asset class. Three key benefits include:

  • Uncorrelated: Infrastructure cash flow returns have a low correlation to other asset classes. It means they do not typically rise or fall in lockstep with liquid asset classes like stocks or bonds or private asset classes like real estate, private debt or private equity.
  • Resilient: Infrastructure returns are relatively resilient to economic turbulence. Even in recessionary economic environments, infrastructure returns have been relatively stable, given their essential, and often contracted or regulated, nature.
  • Long term: Infrastructure assets typically provide steady returns over a long time. Assets usually benefit from long contract lengths of more than 20 years and the assets themselves often have even longer useful lifespans – some hydroelectric assets have reached upwards of 100 years. 

These benefits make infrastructure an attractive asset class. Incorporating infrastructure into a broader portfolio can provide important diversification benefits and may also deliver increased average returns while reducing risk. 

Another characteristic of investing in infrastructure and other private asset classes is restricted liquidity. This is because the holding period of infrastructure assets reflects the long-term nature of the investments. For investors that do not require their capital in the short term, infrastructure can be a relatively safe and low-risk way to generate income and long-term growth.  

Our approach to infrastructure investments

At CC&L Private Capital, our infrastructure investments are primarily in Canada, the US, and Chile. We expect to add infrastructure assets in other geographies over time in a measured and disciplined way. 

Our portfolio is focused mainly on small- and medium-sized traditional infrastructure projects (e.g., roads, rail, hospitals) and energy infrastructure projects (i.e., hydro, wind, and solar).

Choosing the right investment manager

We strongly believe in the benefits of infrastructure investing. That is why we invest a significant amount of our own capital in our portfolio, as with all our private market investments. It shows that we are committed to our portfolio’s performance, as we benefit alongside our clients. 

When evaluating potential investment managers, whether they have ”skin in the game” is important, particularly for alternative asset classes. Other criteria investors should consider include the stability of the investment manager’s team, the manager’s proven ability to generate returns, the direct nature of the investments and the quality and diversity of the infrastructure portfolios.

To learn more about how to choose the right investment manager for your goals, please read our Portfolio Guide – How to future-proof your investment portfolio.

Find out more

If you would like to find out more about our approach to infrastructure investing or learn how we can help you grow your investment returns, please contact us.

This post is for information only and is not intended as investment advice. The views expressed are those of the author at the time of publication and are subject to change at any time.