CBRE to Buy Majority Stake in Caledon

Caledon manages some $7 billion of assets for institutional investors through a combination of direct investments and primary funds. Closing is expected to occur later this year, subject to regulatory approval and other customary closing conditions.

Ritson Ferguson, CEO of CBRE Global Investors
Ritson Ferguson, CEO of CBRE Global Investors

CBRE Group Inc. has entered into an agreement to acquire a majority interest in Caledon Capital Management Inc., of Toronto, an investment manager specializing in private infrastructure and private equity investments.

Once the transaction is closed, Caledon will be renamed CBRE Caledon Capital Management Inc. and operate as a separate business unit under CBRE’s independently operated investment management subsidiary, CBRE Global Investors.

Prior to the merger, most of Caledon’s management team previously worked for Canadian pension plans. That team will continue to manage the business “and will maintain significant long-term ownership,” according to the announcement. With a staff of 30-some in Toronto, Caledon manages about $7 billion of assets for institutional investors through a combination of direct investments, co-investments, secondaries and primary funds.

Closing is expected to occur later this year, subject to regulatory approval and other customary closing conditions.

Caledon Capital Insights

Investors are increasing their allocations to alternative investments, including real assets,” said Ritson Ferguson, CEO of CBRE Global Investors. “Caledon’s market-leading investment solutions are a logical extension to our existing suite of real estate and infrastructure investment solutions….”

“Caledon’s infrastructure investments range from solar energy projects to toll roads to energy transmission and distribution systems and are primarily outside Canada,” Caledon COO Dennis Pellarin told Commercial Property Executive. “Caledon primarily focuses on core and core-plus assets in OECD countries characterized predominantly by regulated, long-term contracted or demand-driven revenue streams. These assets may be complemented with select higher-returning value-add opportunities,” Caledon Founding Partner David Rogers told CPE.

Caledon seeks to diversify its infrastructure investments by investment type (co-investments, minority direct investments and funds, and secondaries), stage of life cycle (pre-construction, construction, growth phase, mature phase), investment strategy (asset vs. platform approach) and governance (passive minority, active minority, joint-control),” he continued.

Caledon’s infrastructure investments over the past two years or so have included a co-investment in a natural-gas transmission and distribution utility in New Zealand, a direct investment in a water and sewerage utility in the United Kingdom, and a co-investment in a gas turbine power plant in Ohio.