Tuesday, June 30, 2009

Canadian Pension Buying Whole PEU Infrastructure Fund from Macquarie

The Canada Pension Plan Investment Board received regulatory approval to buy Macquarie Communications Infrastructure Group, which owns and operates broadcast infrastructure in Australia and Britain. Rather than spin off companies within an investment portfolio, the Australian private equity underwriter (PEU) is selling the whole fund.

The CPPIB wants more of Macquarie's infrastructure, according to the Wall Street Journal. Cash strapped states search for ways to raise revenue. Selling critical infrastructure to PEU's or pension plans is one method. Expect to hear more about it in the future.

The Obama team loves private equity underwriters. They are his prescription for the ills of banks, the tonic for toxic assets, the catalyst for education, and the resuscitation of health care.

Pension plans used to invest big money in PEU's. Now they buy a whole syndication. It's called doubling down. The odds are with GIM House. GIM stands for the Government-Industrial Monstrosity. It's Eisenhower's MIC on steroids and it infects much more than the military.

Update 11-09: CPP in two U.S. buyouts worth $11 billion