Our infrastructure and timberland investments are designed to generate stable, long-term returns. Valued at $10.0 billion at Dec. 31, 2008, our global portfolio is focused on assets that have a long economic life and offer low-risk, reliable returns linked to inflation in order to help pay pensions for decades.
We began investing in infrastructure assets in 2001. Generally, we are a direct investor. We are capable of financing large investment deals involving senior and subordinated debt, public and private equity. We often invest with financial partners that have significant infrastructure experience.
We look for businesses and opportunities in regulated industries that will provide stable returns with low risk. We find good investment opportunities in jurisdictions that have a fair and transparent regulatory framework, creating a strong environment for private investment.
In our timberland portfolio, we acquire timber-producing properties, leasehold interests and timber-cutting rights around the world.
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Significant investments
Power Generation and Distribution
We jointly acquired Chilean electricity transmission and distribution company SAESA Group with Morgan Stanley Infrastructure in 2008. With 658,000 customers, SAESA is the main provider of electricity in the rapidly growing southern regions of the country and also owns and operates 131 megawatts of wind, hydro, and thermal power generation capacity. In 2005, we bought a 50% interest in InterGen N.V., which owns 12 state-of-the-art power plants around the world. This investment complements our 50% stake in Northern Star Generation, which holds interests in 13 power plants in the United States. These assets have a combined generating capacity of 9,500 megawatts.
Water and Wastewater Utilities
Attracted by the company’s regulated utility activities, we bought a 25% stake in Northumbrian Water Group in 2005 (we now own 27% of shares). Northumbrian provides the regulated supply of water and wastewater services to 4.3 million people in England. In 2007, we expanded our portfolio by acquiring significant or controlling interests in three water utilities in Chile representing approximately one-third of Chile’s regulated water and wastewater market: Empresa de Servicios Sanitarios del Bio-Bio S.A. (ESSBIO), Aguas Nuevo Sur Maule, S.A., and Esval S.A.
Gas Distribution
We were part of a consortium that purchased Scotia Gas Networks, which operates gas distribution networks in Scotland and southern England, in 2005 and hold a 25% stake in the enterprise. These networks deliver gas to 5.7 million customers and represent two of the largest regional gas distribution networks in the U.K.
Airports
We began investing in airports in 2002. Currently, we own a 10.8% interest in Sydney Airport, Australia’s major airport gateway and the country’s largest domestic airport with more than 30 million passengers annually. We also own, with a partner, a 48.25% stake in Birmingham International Airport, the sixth largest airport in the U.K. serving more than 9 million passengers annually. In 2009, we increased our direct stake in Bristol International Airport, a top regional U.K. airport, to approximately 49% from 14.5%.
Toll Roads
We are a large shareholder in selected publicly traded companies focusing on toll road ownership and operation around the world. As a result, we have indirect interests in some of the largest and most traveled highway privatizations in the world.
Port Facilities
We made our single, largest acquisition to date in 2007 with the US$2.4 billion purchase of four North American marine container terminals: Vanterm and Deltaport in the Vancouver, British Columbia area; New York Container Terminal on Staten Island, New York; and Global Terminal in New Jersey. Collectively, the terminals handle two million containers annually.