The Ontario Teachers’ Pension Plan (OTPP) is negotiating the sale of its stakes in five major European airports, valued at approximately £3.5 billion ($4.4 billion). The portfolio, which includes airports in London, Birmingham, Bristol, Brussels, and Copenhagen, has garnered significant attention from institutional investors as the travel sector continues its post-pandemic recovery. Here’s a detailed look at the key players involved in this high-profile transaction and the potential buyers eyeing these valuable assets.
The Airports in Play
OTPP’s European airport holdings comprise five key assets located across the continent. Three of these airports—London City, Birmingham, and Bristol—are in the United Kingdom, while Brussels and Copenhagen complete the portfolio. These assets are collectively valued at over £10 billion, with OTPP holding a £3.5 billion stake. The pension plan’s decision to exit these investments is part of its ongoing strategy to optimize its infrastructure portfolio as global travel demand surges.
The Minority Stakeholders
A significant aspect of this transaction is the 30-day right of first refusal granted to existing minority shareholders. This gives them the opportunity to purchase OTPP’s stake before it is offered to external buyers. Several of the minority investors, many of whom are already involved in these airports, are now positioned to take control of OTPP’s share.
Key Minority Shareholders and Potential Buyers
- OMERS Infrastructure Management, Alberta Investment Management, and Wren House Infrastructure: These firms were part of the consortium that acquired London City Airport in 2016 through a leveraged buyout valued at £2 billion. The consortium made a follow-on investment of £130 million in 2022 to address debt and support operational costs. These minority investors are prime candidates to acquire OTPP’s stake in the airport.
- Sunsuper Superannuation Fund: This Australian pension fund has already acquired a stake in Birmingham Airport, buying 14.4% of the airport from OTPP in 2018. Sunsuper could be among the first to pursue OTPP’s remaining 33.8% stake in the asset.
- StepStone: An investor in Bristol Airport, StepStone has progressively increased its exposure to the airport since 2017, when it acquired 15% of the asset. Given OTPP’s remaining 55% stake in Bristol, StepStone is well-positioned to make a move for a larger portion of the airport.
- APG Group and Government Pension Investment Fund of Japan (GPIF): OTPP first acquired its stake in Brussels Airport from Macquarie in 2008. Since then, it has sold a significant portion of the airport, including 39% to New South Wales and GPIF. These entities are potential buyers for OTPP’s remaining stake, which is now just 3%.
- ATP Group and BLS Capital: Copenhagen Airport is publicly listed, but private market investors such as Denmark’s ATP Group and hedge fund BLS Capital hold significant minority stakes. These firms are expected to play a role in the ongoing negotiations for OTPP’s exit from the airport.
Strong Travel Demand Fuels Interest in Airport Assets
The travel sector’s recovery has significantly boosted interest in airport infrastructure assets. In 2024, Heathrow Airport reported a record 30.7 million passengers between June and September, reflecting the rebound in air travel. This has led to a surge in investment in European airports, as evidenced by the £3.3 billion deal earlier this year when Ardian and Saudi Arabia’s Public Investment Fund acquired a 25% stake in Heathrow.
Similar transactions have occurred across the continent, including Global Infrastructure Partners’ sale of its 50.1% stake in Edinburgh Airport to Vinci Airports for £1.58 billion. With travel demand continuing to rise, OTPP’s European airports are expected to attract significant interest from institutional investors, sovereign wealth funds, and private equity firms.
What’s Next for OTPP’s European Airport Holdings?
OTPP’s decision to exit its stakes in these key European airports is a strategic move to realign its infrastructure portfolio. The sale process will likely see competitive bidding, with a mix of existing minority shareholders and outside investors looking to capitalize on the strong recovery in global air travel.
The £3.5 billion portfolio is set to be a key asset in the evolving infrastructure investment landscape, and OTPP’s exit could pave the way for new investors to assume control of these critical European transport hubs. As the travel industry continues its recovery, the airports in OTPP’s portfolio are expected to remain highly attractive to investors seeking stable, long-term returns.
References:
- PitchBook (2024). OTPP’s European Airport Divestment Strategy. PitchBook.com.
- The Sunday Times (2024). Ontario Teachers’ Pension Plan to Sell Stakes in Major European Airports. thesundaytimes.co.uk.
- Forbes (2024). Global Infrastructure Investments Surge in the Travel Sector. Forbes.com.
