Eric Machiels, Managing Director, Asset Management at OMERS Infrastructure, sheds light on how companies within OMERS’ portfolio have played a crucial role in keeping the economy going throughout the pandemic and their ambitions to support a transition towards a reduction in carbon emissions.
As a global investor, OMERS Infrastructure has seen first-hand the impact that COVID-19 has had on communities and businesses in every part of the globe. Through our various board roles, we have remained highly engaged with our portfolio companies to support them as we all work to secure a post-COVID economic recovery. With the vaccine rollout now underway, we hope we can finally see light at the end of the tunnel.
OMERS was established in 1962 and now supports over half a million public sector employees across Ontario, Canada in their retirement. Like other investors, COVID-19 presented an unprecedented challenge to our portfolio. Thanks in part to our strategic portfolio diversification as well as our active management approach, our infrastructure portfolio proved resilient in 2020. Sectors such as regulated utilities (power and gas grids, water), renewables and digital infrastructure continued to perform well, while some transport sector assets were understandably quite challenged given global restrictions on travel.
Throughout 2020, we have sought to help our companies navigate through the crisis and have supported their management teams to ensure their balance sheets remained resilient and strong given increased volatility. Vitally, our assets have been able to provide their essential services in a safe manner for their customers and staff, despite the challenges they faced.
From the start of the pandemic, we knew the important role that many of our assets would play as the world adjusted to life under lockdown. We are proud of how the utility companies in our portfolio continued to deliver essential services such as water, gas and electricity. Many organisations stepped up to support their communities, such as London City Airport, which offered logistical support to the temporary NHS Nightingale Hospital which was established next to the airport at the start of the pandemic to welcome up to 4,000 critical patients. Similarly, Associated British Ports (ABP) was able to ensure continuity of service for its customers in often challenging circumstances, keeping internal employee communication flowing in various innovative ways and persisting in implementing the key initiatives which underpin its ambitious commercial and operational strategy.
How well a company manages a crisis depends on the quality of its employees, management team, governance culture and the resilience of its systems and processes. ABP’s successful navigation through the last 12 months is testament to its strength in all these aspects. Everyone at ABP should be proud of the way the team held together and managed the twin challenges of the pandemic and the changes to trade due to Brexit.
We know that infrastructure will play a key role in delivering our post-COVID economic recovery. Governments in the UK and across Europe are rightly seeing investment in infrastructure as a key building block in achieving this goal. Initiatives such as Freeports in the UK will also be crucial in supporting this recovery. It is incredibly exciting to see ABP has been successful in its bids for Freeports for the Humber, Southampton, Garston and Plymouth.
Energy transition is high on the agenda of businesses and regulators. OMERS has recently announced its own commitments to achieve a 20% carbon reduction across our total portfolio by 2025, and at OMERS Infrastructure we are actively looking to invest in low carbon opportunities and working with our existing assets to support this transition, which we believe will secure sustainable returns for our members over the longterm.
ABP is a stand-out example of a port infrastructure provider that takes its environmental obligations seriously, working hard with customers and stakeholders to deliver improvements in air quality, investing in programmes to promote energy efficiency, as well as installing one of the largest privately owned networks of air quality monitoring systems in the UK. ABP’s strategy will continue to deliver major investment in solar and wind generation capacity to maximise the use of renewables for powering the business.
As long-term partners, OMERS stands steadfastly beside our portfolio companies as we work together to support the economic recovery post-COVID and invest for a low-carbon future.