Canada Pension Plan Investment Board (CPPIB) announced today that it has formed a venture with Banco BTG Pactual S.A. (BTG) to invest in residential development opportunities in Brazil. CPPIB has committed an equity investment of US$240 million for a 40% interest in the venture and BTG has committed to making an equal investment. BTG will act as the investment advisor and manage the day-to-day affairs of the venture, while CPPIB will have a seat on the investment committee which approves all investments made by the venture.
"This opportunity provides us with an attractive entry point to the Brazilian residential market as we continue to expand our real estate portfolio in Brazil. The fundamentals of Brazil's residential development sector are compelling as a growing middle class, increased economic activity, and favourable demographic shifts drive increased demand for new housing," said Peter Ballon, Vice-President and Head of Real Estate Investments - Americas, CPPIB. "We are pleased to be investing alongside BTG, a well-aligned and experienced local partner with a proven track record in the residential sector."
The venture, which will invest capital alongside local residential developers, will leverage BTG's extensive experience in the Brazilian residential market and its position as one of Brazil's leading investment banks.
CPPIB's real estate portfolio in Brazil is valued at C$1.5 billion at September 30, 2013. The portfolio includes interests in retail, office and logistics properties totalling more than 4.1 million square metres (44 million square feet), including development assets.
"Brazil remains a strategic market for CPPIB over the long term and we will continue to seek attractive investment opportunities through partnerships with top-tier local partners," said Mr. Ballon.
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