Japan, Canada pension funds in $2 billion deal


A Japanese pension fund is joining a Canadian partner and other firms in a $2 billion deal involving the purchase of a Michigan power plant, a company involved in the deal said Tuesday.

The Pension Fund Association, a federation of employees’ pension funds, and several other Japanese firms have tied up with Canada’s OMERS pension fund to invest in the Midland Cogeneration Venture in Midland.

The move marks the first direct infrastructure investment by one of Japan’s pension funds, which are being pushed out of their usual government bond purchases partially because of the central bank’s own bond-buying stimulus drive.

The Pension Fund Association manages more than ¥10 trillion ($100.5 billion) in assets.

Trading giant Mitsubishi said it was also involved in the ¥200 billion deal struck by the Global Strategic Investment Alliance, an investment fund that includes Mizuho Bank and the Japan Bank for International Cooperation.

The venture is currently owned by the Canadian pension fund, which will sell part of its stake to the GSIA, with which it will then jointly re-invest in the power plant.

Mitsubishi said the investment was also the first for the $7.5 billion GSIA, which was formed in April 2012 to buy into infrastructure mainly in North America and Europe under the leadership of OMERS.

OMERS will hold 50 percent of the plant, with 25 percent allocated to the Pension Fund Association while the remainder will be shared among the other partners, Mitsubishi said.