Ontario Teachers’ CIO says U.S. behind in race for infrastructure capital: Reuters

The United States is lagging behind Canada in the race to attract capital for infrastructure projects despite launching a charm offensive to global investors and reaching out to officials north-of-the-border for advice, a top Canadian investor said.

Canada is setting up an infrastructure bank to facilitate private investment in projects such as new roads, bridges and tunnels but faces competition from the United States, where President Donald Trump is planning US$1 trillion of infrastructure spending, funded mostly by the private sector.

Bjarne Graven Larsen, chief investment officer at Ontario Teachers’ Pension Plan, said Canada has an advantage in already being home to a number of the world’s biggest infrastructure investors and having an established track record in utilizing public and private funding to build infrastructure.

“I think Canada is actually better positioned than the U.S. because there’s more institutions already, there’s more history around how to do that in Canada compared to the U.S.,” said Larsen, who helps manage assets worth $175.6 billion (US$138.3 billion) with the pension plan being one of the world’s biggest infrastructure investors.

Larsen said he and other major Canadian investors recently met with officials, including U.S. Treasury Secretary Steven Mnuchin, at the White House to discuss U.S. infrastructure.

“They acknowledged that Canada is actually ahead of the U.S. in the planning here,” he said.

The infrastructure team in the White House was seeking advice from its Canadian counterparts as well as Canadian investors and considering whether they should copy some of the Canadian model, Larsen added.

Trump has begun a “massive permit reform” as part of the U.S. infrastructure plan to speed up construction approval processes and Larsen agreed that the slow process had previously been a deterrent to international investment in U.S. infrastructure.

“In the U.S. the permitting process was sometimes difficult to figure out. You had to take a lot of different things into consideration,” he said. “They actually changed that so there is now one federal permitting body in Washington that’s sitting in the executive office next to the White House.”

Efforts by the United States to woo foreign investment in infrastructure follow a similar charm offensive from Canadian Prime Minister Justin Trudeau who hosted international investors such as Norway’s Norges, which runs one of the world’s largest sovereign wealth funds, the Qatar Investment Authority and Singapore state investor Temasek in Toronto last November.

Canada’s efforts are focused around the infrastructure bank, which plans to attract $4 to $5 for every $1 of public funding for infrastructure projects.

“I think it’s a very important initiative and we’re very supportive of the infrastructure bank,” said Larsen. “We see it as a vehicle that we can potentially invest in.”

Update: Ontario Teachers’ hired Bjarne Graven Larsen as executive vice president and CIO in early 2016. He previously served as CIO and executive board member at Danish pension fund ATP.

(Reporting by Matt Scuffham; Editing by Lisa Shumaker)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Reuters/Mike Blake