PensionsSeptember 12, 2024

CPP Investments Makes Additional C$532M Commitment to Brazilian Water Company

The Canadian pension fund previously owned a 61.4% stake in Iguá Saneamento.

Reported by Matt Toledo

The Canada Pension Plan Investment Board announced on Tuesday that it made a C$532 million ($391.61 million) follow–on commitment to Iguá Saneamento, a Brazilian water and sanitation services company, in which CPP Investments is a majority owner.

“This is a transformational acquisition for Iguá, which continues to serve as an excellent platform through which CPP Investments can identify and gain access to the most attractive investment opportunities in the Brazilian water and sanitation market,” said James Bryce, global head of infrastructure at CPP Investments in a statement.

The follow-on commitment comes shortly after Iguá was awarded a contract on September 4 to provide water distribution and sewage collection services in the northeastern Brazilian state of Sergipe. The concession will see Iguá expand its services to 74 municipalities in Sergipe. In total, the company’s services will reach 5 million customers.

CPP Investments first invested in the company in 2021. Prior to the current follow-on commitment, the fund owned a 61.4% stake in the company.

“This sector has significant room for growth while also providing opportunities to invest in long-term, stable assets at scale,” Bryce continued. “We expect our investment in Iguá will continue to deliver strong returns for the CPP fund and we look forward to supporting the company’s success through this follow-on investment.

CPP Investments has C$646.8 billion in assets under management. According to the fund’s 2024 annual report, CPPIB’s Latin American investments returned 11.5%, which it credited primarily to public equity investments in Brazil.

CPP Investments allocates approximately 8% of its portfolio to infrastructure. Latin America makes up 6% of the fund’s geographic composition. The fund’s infrastructure portfolio returned 2.6% in the 2024 fiscal year, driven primarily by strong returns in toll roads, which were offset by lower returns from logistics and utilities investments.