DP World, Canadian fund confirm additional $4.5b into new port and terminal investments

Dubai: DP World will be channeling an additional $4.5 billion along with its Canadian partner to expand the ports and terminal network they own and operate. The new funds raise the duo’s combined fund outlay to $8.2 billion.

DP World owns 55 per cent in the investment platform and Caisse de dépôt et placement du Québec, the pension fund, holds the rest. Bloomberg had earlier reported that the two entities are nearing an agreement to commit the new round of funds. They had agreed in 2016 to set up a platform for investing in ports around the world.

the platform has invested in 10 port terminals globally. An initial investment target of $3.7 billion has been hit, with the portfolio holding ports across North America, Latin America and Asia Pacific.

“The opportunity landscape for the port and logistics industry is significant and the outlook remains positive as consumer demand triggers major shifts across the global supply chain,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.

“Best-in-class well connected ports and efficient supply chains will continue to play an active role in advancing global trade and cultivating the business environments closest to their operations. We look forward to working together on new investments that will connect key international trade locations worldwide.”

The fresh capital will be used to develop existing locations and expand into new geographies, including Europe, as well as sectors such as logistics services. It will take the total amount committed to the venture, which is 55 per cent owned by DP World, to $8.2 billion since inception.

Wide reach

DP World is one of the world’s largest operators of marine ports and inland cargo terminals, stretching from gateways in London and Antwerp to hubs in Africa, Russia, India and the Americas. The company has been on an acquisition spree in recent years, buying assets from P&O Ferries and P&O Ferrymasters in Europe to Puertos y Logistica in Chile.

In February, Dubai said it would take DP World private after a dozen years to alleviate its debt burden and avoid a repeat of the economic crisis that forced a bailout in 2009.

As a pensions investor, the Caisse is attracted to infrastructure assets that offer steady, long-term returns. The group managed assets of C$333 billion ($255 billion) as of the end of June. At present, investments outside Canada and the US account for a third of its portfolio, according to its website.