Canadians nab prime UK asset in high-speed rail

The intention to sell had been well-flagged by George Osborne in his various statements on the nation's finances, and had indeed been earmarked by Labour for disposal too while they were still in office.

The completion of the transaction came as no surprise; the price seemed much as expected.

But the fact that the purchaser was Borealis Infrastructure Management, the infrastructure arm of a couple of Canadian pension funds, did raise eyebrows.

It is well-known the Ontario Teachers' pension fund and the Ontario Municipal Employees' scheme — the funds behind this deal — have an appetite for infrastructure assets, and are run with a level of flair and imagination that puts most risk-averse UK funds to shame.

While UK schemes struggle to escape from the reckless prudence wished on them by consultants and the ever-growing mountain of regulation, twin pressures that drive them to invest in bonds almost regardless of their price, the Canadians actively look to make their money grow.

That said, and even accepting the caution in the UK, it was still widely assumed that something like this — a prime UK asset with a predictable long-term revenue stream — would be a natural for one of the larger UK pension funds, and particularly BT, or for several of the larger funds acting as a syndicate.

It is just the sort of long-term reliable asset these funds need to set against their long-term commitments to pay pensions. 

As a consequence, there were those in the pensions industry who thought it virtually a done deal. They are now extremely confused that such a prime asset should have gone abroad, and that no UK fund appears even to have been in the frame as a purchaser.

Perhaps in some idle moment a minister could run through the background to the deal — just in the interests of removing the confusion.