The world’s biggest pension funds and their investments into airports
A previous CAPA report, published in Dec-2022, identified the world's leading sovereign wealth funds and which of them invested in, or at least paid attention to, the airports business. This report turns to pension funds, which collectively have assets similar in scope to SWFs - in other words, a lot of cash.
Like SWFs, the fund managers have been attracted to the traditional security and longevity of airports (although airports have been less secure since the COVID-19 pandemic).
The report looks at the Top 30 pension funds by asset size, out of which 10 have airport interests, meaning they are investors - have been, or have indicated an aspiration to be. And five of the top seven have invested in airports, or tried to.
Those investments are at widely contrasting levels, from small airports in the US aspiring to take on larger rivals to global hubs. Of the 20 that have shown no known interest in the sector, many are in the US, and the changing scene there, with public-private partnership arrangements increasingly funding major airport infrastructure investments, means there may yet be a role for them.
Summary
- Pension funds are gaining ground as airport investors.
- Of the Top 10 funds, seven are connected to the airports sector.
- Much of the investment was made into London Gatwick Airport by four funds, three of which are in the world's Top 30.
- Australia has more pension funds working in the sector than other countries, two of which are in the Top 30 list.
- The most aggressive is Canada's Ontario Teachers' Pension Plan (OTPP).
- The US has 12 funds in the world's Top 30, but only two are active in the sector; there may be more opportunities arising out of P3 deals for major infrastructure.
The number of pension funds in the airport sector is increasing
Last year CAPA published a special report on sovereign wealth funds (SWFs) and their investments into airports.
Here attention turns to pension funds - which have a greater impact on the financing of the sector.
The previous report made reference to one published in 2018, an airport financing and privatisation overview, which identified among airport investors 14 SWFs active in the sector and 20 pension funds.
The previous report made reference to a research report published in 2018, an airport financing and privatisation overview, which identified amongst airport investors 14 SWFs active in the sector and 20 pension funds.
That database has since been re-examined and the chart below has been produced, valid as of Jan-2023, and which shows that there has been an increase in representation from the Sovereign Wealth and Pension Fund segments.
Airport investors: Jan-2023
Just as the number of SWFs has increased (but only by one), the number of pension funds has too, but by a far greater margin - 20 then, rising to 32 now, out of a total of 1074 individual investor portfolio entries in the GAID.
Just as the number of SWFs has increased (but only by four), the number of pension funds has too, but by a far greater margin; 20 then, rising to 32 now, out of a total of 1074 individual investor portfolio entries in the Global Airport Investors Database (GAID).
(N.B. 'Active' here means those that are known to hold equity in airports, they have done, or they aspire to do so [i.e. are listed in the GAID]).
Five of the top seven pension funds have an association with airports
In the report CAPA reveals that among the world's 30 largest pension funds by assets held, five of the top seven funds have at least an association with airports.
In total, 10 have airport interests, meaning they are investors - have been, or have indicated an aspiration to be.
You can download it here: The world's biggest pension funds and their investments into airports