CPP Investments Makes Infrastructure Push

Canada Pension Plan Investment Board (CPP) is making a major infrastructure push in 2024, committing to two global infrastructure projects.

The pension provider has invested in Italy’s infrastructure network and in Boldyn Networks, a shared network infrastructure provider in the US and globally.

CPP entered into an agreement to join the Optics BidCo investor group, which is acquiring NetCo, a telecoms network in Italy, from Telecom Italia.

CPP Investments committed to acquiring a 17.5% interest in NetCo for up to $2.15 billion (C$2.9 billion) in a transaction that values the business at an enterprise value of approximately $20.5 billion (C$27.5 billion).

The investor group, led by KKR, includes a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), the Italian infrastructure fund F2i and the Ministry of Economy and Finance of the Italian Government.

CPP has also made an investment commitment to Boldyn Networks, alongside Alberta Investment Management Corporation (AIMCo) and Manulife Investment Management. The investment will support Boldyn’s growth strategy in the US and the company’s agreed acquisition of Apogee Telecom, one of the largest providers of on-campus connectivity infrastructure in the US higher education industry.

CPP’s commitment to Boldyn represents a new follow-on commitment to the company. The pension plan has been a majority shareholder in Boldyn with an 86% position since 2009, and has committed approximately $2.6 billion (C$3.5 billion) to the platform.

AIMCo is a minority shareholder in Boldyn, with a 10% position, and Manulife partnered with Boldyn in 2021 to acquire a minority interest in its digital infrastructure assets in the US.

Opportunities in higher education

Increasing demand for high-speed, low-latency connectivity at colleges and universities represents a significant investment opportunity, CPP said.

Apogee offers wireless residential campus networks for students, faculty and staff, managed campus network and technology solutions, fiber infrastructure as a service and video services.

When the deal is completed, expected in Q2 of 2024, Apogee’s customers will have access to Boldyn’s extended wireless capabilities.

James Bryce, managing director, head of infrastructure at CPP, said:  “Investing in digital infrastructure continues to be attractive as the world becomes increasingly data-centric, and we believe Boldyn’s acquisition of Apogee will position the company for growth within the large-scale US higher education industry.”

Italy’s prospects

Following CPP’s investment, NetCo’s business will be focused on separating the company’s fixed network assets from Telecom Italia. It will offer connectivity to homes and businesses across Italy on an open-access wholesale basis with a mix of copper and fiber-based technologies.

NetCo will support completing an upgrade to the existing network to deliver fiber-based services in urban and rural areas, the decommissioning of legacy copper technologies and help improve IT functionality.

Bryce said: “Our investment alongside these key partners with a shared long-term vision will help deliver high-quality digital infrastructure across Italy as well as generating long-term risk-adjusted returns for the fund.

“We are optimistic that NetCo can represent the first of several infrastructure investments in Italy for CPP Investments.”

The European focus

CPP holds significant digital infrastructure investments in Europe, including Cellnex’s private network business units. Boldyn, majority-owned by CPP, acquired Edzcom from Cellnex for an undisclosed fee.

Edzcom designs, builds, and operates private 4G and 5G networks across enterprise customers in the manufacturing, transport hubs, oil and gas, energy generation, and mining industries.

Boldyn said this acquisition strengthened its position in the growing private networks market.