Infrastructure

The past year was an encouraging one for infrastructure investors as deal flow showed positive signs of returning and fundraising activity sharply rebounded. Total commitments to infrastructure funds in 2010 were nearly double the level of commitments in 2009, and transaction activity was particularly strong in the final quarter of the year. A good source of deal flow for infrastructure funds over the past year has been the divestiture of non-core assets, such as pipelines and storage facilities by major oil and gas companies. Additionally, the sale of non-core road assets by developers, government asset sales, and refinancing of over-leveraged transactions have all provided opportunities for infrastructure investors.

As with real estate, 2010-11 represented the first year of our active investment program in infrastructure. Total investment for the year exceeded $120 million through a combination of fund commitments and direct investments in infrastructure assets alongside other investment partners. While our initial focus has been on investment opportunities in Canada, the infrastructure portfolio will ultimately be globally diversified and include investments from around the world.

Also like real estate, the majority of ATRF’s infrastructure investments were made in the second half of the fiscal year. Accordingly, the 2.6% return reflects a limited asset base over a short time period, and the benchmark return was set to match the portfolio return.