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OMERS has sold half of its 19.9% stake in Australian energy company Transgrid to the Future Fund, Australia鈥檚 sovereign wealth fund.

The Future Fund Board of Guardians (FFBG), the body responsible for managing the government鈥檚 investment funds, said it has acquired the 9.995% stake in Transgrid from OMERS.

OMERS, which acquired its 19.9% stake in Transgrid in 2020, will retain a 9.995% stake in the energy company and will also manage FFBG鈥檚 newly acquired interest.

Financial details were undisclosed.

Transgrid, the largest electricity transmission network in Australia, operates and manages the high-voltage electricity transmission network in New South Wales and the Australian Capital Territory. 

Ralph Berg, CIO of OMERS, said: 鈥淔or over 25 years, OMERS has been a direct investor in infrastructure. The asset class has provided OMERS with strong and predictable returns and the assets in our global portfolio 鈥� including firms such as Transgrid 鈥� have a strong social ethos and a purpose that fits the requirements of delivering for our members, partners and communities in which we invest.

鈥淲e are very proud to welcome Future Fund, with whom we share similar values and a common mission, into our strategic partnership programme, where they are now a co-investor in Transgrid and can access our excellent asset management platform and capabilities.鈥�

Michael Hill, EVP and global head of OMERS Infrastructure, said: 鈥淥MERS and Future Fund are strongly aligned, like-minded investors, and we are delighted to partner with Australia鈥檚 sovereign wealth fund through our strategic partnership programme to bring our world-class investment and asset management capabilities to managing our collective investment in Transgrid.

鈥淎ustralia is a core part of our investment strategy, and essential community assets such as Transgrid remain an important contributor to the delivery of consistent and reliable returns on behalf of our members.鈥� 

Christopher Curtain, senior managing director and head of Asia-Pacific, OMERS Infrastructure, said: 鈥淥MERS first invested in Transgrid in 2020, recognising the high quality, critical infrastructure services it provides to Australian businesses and communities. 

鈥淲e are proud of our support of Transgrid over the past five years as it has been leading an unprecedented transition of the Australian energy sector and look forward to continuing to do so through our new partnership with Future Fund.鈥�

Ben Samild, CIO of the Future Fund, said: 鈥淥ur investment in Transgrid is in line with our risk and return objectives and reflects our consideration of the opportunities of the energy transition. The transition requires the commitment of patient long-term investors, and we believe our capital will be well rewarded by supporting Transgrid鈥檚 growth.

鈥淟arge infrastructure assets such as Transgrid help us achieve our investment mandate to deliver attractive risk-adjusted returns and protect the portfolio from higher inflation, interest rates and currency volatility.鈥� 

Peter McCosker, director, infrastructure at the Future Fund, said: 鈥淲e are very pleased to have secured an investment in Australia鈥檚 premier electricity transmission business. We look forward to working constructively with the Transgrid team, our co-securityholders and all Transgrid鈥檚 stakeholders to deliver long-term, sustainable outcomes for the business whilst facilitating Australia鈥檚 energy transition.

鈥淭his investment is a valuable addition to the Future Fund鈥檚 infrastructure holdings and will diversify our portfolio and help deliver on our investment mandate.鈥�

Future Fund now joins an existing consortium of Transgrid shareholders, which includes Spark Infrastructure, the Morrison-managed Utilities Trust of Australia, CDPQ, Abu Dhabi Investment Authority-owned Tawreed Investments and OMERS.

Since the end of 2021, Australian energy firm Spark Infrastructure has been owned by a consortium comprising KKR, Ontario Teachers鈥� Pension Plan and the Public Sector Pension Investment Board.

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