Disclosure: Mark Wiseman is a senior adviser at Lazard Ltd and was part of a team that advised Intel in its deal with Brookfield Infrastructure referenced in the article below.
Only during such periods as the Industrial Revolution and the Second World War has there been the kind of inflection point for industrial policy and infrastructure building that exists now.
In Canada and internationally, there is an abundance of private capital and increased appetite from institutional investors for innovative and reliable investments. At the same time, the private sector needs enormous amounts of capital to fund projects that will build and supply the industries of the future.
Economic uncertainty, geopolitical divisions and an urgent demand for renewable energy and digital services are all contributing. Just as public infrastructure such as airports and roads is critical to long-term economic success, so, too, is the development of corporate capacity to meet modern industrial needs.
Investors and corporations are scrambling to take advantage of private infrastructure investment opportunities. In Canada, institutional investors and pension funds are at the forefront of the wave of private capital that has become available for financing corporate infrastructure, as demonstrated by Brookfield Infrastructure’s recent US$15-billion investment with chip maker Intel INTC-Q to build a massive semiconductor fabrication facility in Arizona. The agreement was good news for the U.S. chip shortage, with promising implications for the country’s economy and the drive to reshore critical manufacturing.
The private capital to finance such projects is swelling, with US$3.3-trillion of dry powder for investments available at the end of 2021, and investors are increasingly seeking safe havens in infrastructure projects that provide long-term risk-adjusted returns and free up capital to fund corporate growth.
To tap into this, corporations are creating asset classes and cash flow models that meet investors’ needs. For example, an investor might get partial ownership of a production facility while the corporation maintains control of the assets produced, creating scale and allowing the corporation to focus on their core business – in turn producing returns for investors putting their long-term capital into action.
The advent of these deal structures has been made necessary partly because of geopolitical trends. The past few years have seen dramatic instances of decoupling and division in the global economy, precipitating demand for onshore industrial capacity. Look to Europe’s energy woes or Canada’s struggles with PPE and vaccines to understand why Western democracies want to establish supply chains and production capabilities at home or with trusted allies.
Washington is revitalizing domestic industrial policy, determined to become independent and superior to its global rivals. Foreign companies are also beginning to move manufacturing capacity to the U.S., as access to this lucrative market becomes more dependent on domestic production.
U.S. Secretary of Commerce Gina Raimondo floated the idea of “friend-shoring” last fall, whereby the country invests securely alongside trusted countries to facilitate new infrastructure and drive industrial policy. Combined with our expertise in infrastructure financing, this represents an opportunity for Canada.
Ottawa should focus on catalyzing private investment in renewable energy and digital infrastructure. The Canada Infrastructure Bank was established for infrastructure projects that are public, but government policy now needs to go further to facilitate private capital toward corporate ones.
Time is of the essence, given how long it takes to build these projects and increasing global competitiveness. The U.S. government rolled out the CHIPS Act, and other infrastructure legislation, aimed at pooling private capital efficiently for infrastructure projects. The EU has proposed a European CHIPS Act. Canada cannot afford to sit on the sidelines of this industrial revolution.
Specifically, we should focus on the value chains associated with renewable energy and digitization. Once considered emergent asset classes, renewable energy and digital capacity are on their way to becoming the dominant infrastructure classes of the next decade.
The infrastructure expertise of Canadian investors, such as Brookfield BAM-A-T and the Maple Eight pension funds, has not thus far equated to domestic innovation in these fields. A recent EY analysis ranked Canada 13th out of 14 countries for electric-vehicle readiness – an indictment on our ability to capitalize on our strengths in an industry that could contribute US$48-billion annually to our economy.
The need for improved digital infrastructure is equally as urgent. While many thought the digital revolution would take place in the clouds, applications from cloud computing to 5G adoption are becoming increasingly data-intensive, requiring physical infrastructure.
Analysts predict the data-centre market will be worth US$37.6-billion by 2026, compared with US$6.9-billion in 2021. Technology giants Amazon AMZN-Q, Microsoft MSFT-Q, Alphabet GOOGL-Q and Meta META-Q are more than doubling their data centre square footage every three years, but there are a vast number of companies who need a digital infrastructure ecosystem to provide their services.
This kind of opportunity, like the electric-vehicle industry, can be seized through the implementation of creative infrastructure financing arrangements between corporations and investors. As we rapidly enter a new economic and geopolitical era, the way we finance the projects of the future must adapt in tow.
Public infrastructure will continue to be critical for long-term productivity. But partnerships that allow companies to leverage their competitive advantages and incentivize investors to deploy their capital to increase capacity and reduce financial burdens for corporations will be the defining feature of this next industrial revolution.
My Favorite Investment Writing of 2022 – Of Dollars And Data
With 2022 coming to a close, it’s time for my annual tradition of gathering my favorite investment writing of the year. I started this tradition in 2017, and have continued it ever since (2018, 2019, 2020, 2021).
However, unlike previous years, 2022 was painful for investors of all types. Stocks fell, bonds fell, and crypto really fell in the worst market environment since 2008. And, though this year was difficult for all of us, the silver lining is all the great investment writing that came out of it. With that being said, I present my favorite investment writing of 2022:
The first piece on this list was technically written in February 2021 (and featured on last year’s list). However, given its accuracy and level of foresight, I thought it would be the perfect way to start this year’s list as a reminder of how far we’ve come. If there’s one line that I will never forget it’s:
Eventually, everyone figured out that Galileo was right. Eventually, everyone will figure out that Cathie Wood isn’t. And it won’t take as long either.
Yes Drew. It didn’t take long at all.
Morgan remains my favorite writer in finance because he is one of the few people that can make me re-evaluate my most cherished beliefs. In this piece he challenges our reliance on data and logic by demonstrating why people don’t always behave as rationally as we think they will. Filled with beautiful stories and counter-intuitive insights, this is another Morgan Housel classic that you won’t want to miss.
While I don’t agree with everything that Ben Hunt writes (he can be too bearish for me at times haha), I recognize that he is one of the best thinkers in our industry. In this post, he provides a brief history of financial markets during the era of declining interest rates and how 2022 flipped everything on its head. If you want to have a better understanding of monetary policy and how people respond to interest rates, this is the piece to read.
Sometimes I read a Josh Brown piece and can’t perfectly describe what it’s about, only that you have to read it. This is one of those pieces. In it, Josh walks you through the last few years in markets and explains why everything seems to have taken a sudden 180. Though there are some things that you weren’t suppose to see, thankfully, this piece isn’t one of them.
I love it when a writer provides a simple rule of thumb that makes my financial life easier. In this piece Katie does just that. Using her rule, you’ll be able to quickly calculate out how much you need to save for retirement based on how much you want to spend (each month) in retirement. Not only is this rule practical, but Katie explains it in a fun and relatable way. For anyone who wants great financial tips from one of my favorite people in the industry, look no further than Money With Katie.
With all the bullshit that there’s been in the investment industry over the past few years, this piece from Benn Eiffert is a breath of fresh air. Though Benn is mostly known for being an expert on volatility, he demonstrates his overall investment knowledge wonderfully in this scathing takedown of an industry that has, unfortunately, conned so many. While there’s a lot of bullshit in the financial world, thankfully, you won’t find any in this piece.
While many writers will discuss risk within your portfolio, far fewer think about it with regards to your income and your career. In this piece, Chris Keith teaches a lesson that took me a little too long to learn—diversification shouldn’t stop with your investments. While owning a mixture of income-producing assets can work wonders, having a mixture of different income sources is equally, if not more, important. If you want to learn how to be a little more anti-fragile with your finances in the future, read this.
Jack Raines is the fastest growing financial blogger that I’ve ever seen and this article helps explain why. In it, Jack explains the six types of wealth and why they are all important to your life. Though only in his mid-twenties, Jack writes with the wisdom of someone decades older. Don’t just take my word for it though, read this piece and find out for yourself.
Another young blogger that has taken the financial world by storm, Kyla Scanlon is the go-to person for understanding what’s happening right now in the markets and the economy. In this piece she defines a term that was since co-opted by many others—the vibecession. While she is mostly known for her TikToks, Kyla’s sometimes quirky and always insightful writing is not something to be overlooked.
Ben wrote a lot of great posts on the housing market this year, but this was my favorite because it addressed the elephant in the room—luck. Given that purchasing a home is likely to be the biggest financial decision of your life, luck plays an important role in such transactions. Ben’s piece is useful in this regard because it highlights how this plays out in the real world. If you are in the market for a house (or will be soon), this is the piece to read.
I love when Michael Batnick does posts like this because there are so few writers that can take the 40,000 foot view and summarize it in such a succinct and insightful way. This piece is no exception. In a year where there are many lessons to be learned, Michael drops 20 of them with ease. My favorite is:
Diversification is the only answer to an unpredictable future. If everything is working, you’re not really diversified.
Amen, Michael. Amen.
Last, but not least, we have The Crypto Story from none other than Matt Levine. Matt is the best daily writer in finance, which means that he tends to write about things that happened in the last 24 to 72 hours. However, with this piece Matt created an evergreen epic that dives into the history of crypto and how its future might unfold. While this piece clocks in at around 40,000 words, Matt’s simple way of explaining such complex topics make it an easier read than you might expect. Don’t miss out.
I hope you enjoyed this year’s annual review. Happy investing and thank you for reading!
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This is post 324. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
Ontario Teachers' Announces Appointment of Sustainable Investing Leader Anna Murray – Ontario Teachers' Pension Plan
TORONTO, Dec. 6, 2022 – Ontario Teachers’ Pension Plan Board (Ontario Teachers’) announced that Anna Murray has been appointed to the role of Senior Managing Director and Global Head of Sustainable Investing effective December 5.
Working within Total Fund Management, Investment Division, Ms. Murray will play a leadership role in supporting Ontario Teachers’ long-term plan to create a lasting, positive impact while creating value for members. By working closely with senior leaders and investment teams across the organization, she will execute on the fund’s ambitious climate strategy and net-zero targets, advance its approach to impact investing and oversee corporate governance activities including proxy voting and public company engagements. She will also oversee the continued integration and assessment of Environmental, Social and Governance (ESG) opportunities and risks in the investment process.
“Sustainable investing is a key part of Ontario Teachers’ strategy as it generates positive, real-world impacts while supporting long-term value creation for our members. We look forward to Ms. Murray and her team helping us meet our impact-related commitments, as well as continue to evolve our approach and build on our leadership in sustainable investing,” said Ziad Hindo, Chief Investment Officer.
Ms. Murray has extensive experience leading and developing sustainability strategies. Most recently, she was the Global Head of ESG for Sun Life Capital (SLC) Management where she was responsible for integrating ESG risk management and value creation practices into investment decisions and management across the firm’s global investment platform. She also worked as Global Head of ESG with BentallGreenOak, SLC Management’s real estate investment manager and a globally recognized provider of real estate services.
Ms. Murray is Co-Chair of the Principles of Responsible Investment (PRI) Real Estate Advisory Committee and of the Environmental Committee at the Pension Real Estate Association (PREA). She also serves on the Board of Directors for the Responsible Investment Association and the Canada Green Building Council. She has been named one of the Top 100 Women in Canada by the Women’s Executive Network, Top 40 under 40 and one of Canada’s Clean50, which recognizes sustainability leaders who have made exceptional contributions to the clean economy. She holds an international MBA from the University of British Columbia and a law degree from York University with a focus on environmental justice and sustainability.
About Ontario Teachers’
Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is a global investor with net assets of $242.5 billion as at June 30, 2022. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 333,000 working members and pensioners.
With offices in Hong Kong, London, Mumbai, San Francisco, Singapore and Toronto, our more than 400 investment professionals bring deep expertise in industries ranging from agriculture to artificial intelligence. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.6% since the plan’s founding in 1990. At Ontario Teachers’, we don’t just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on Twitter @OtppInfo.
Phone: +1 (416) 419-1437
Record investment in MB highways in store for 2023 – DiscoverWestman.com
MLA for Turtle Mountain, Doyle Piwniuk, says he’s looking forward the New Year as one full of accomplishments.
“I’m very optimistic, we have a very big year going forward provincially,” he explains. “We’re looking at economic development, reconstructing of more highways, like Hwy 23 in the region, and we have more highways to fix. Going forward in 2023 there will be a record investment in our highways.”
“It’s also going to be a good year for the Turtle Mountains area too because of the opportunities at the International Peace Garden and the economic development in the different communities. I believe we are going to have a very bright 2023,” adds Piwniuk.
“On behalf of my family to your family, I want to wish you a very merry Christmas and a happy New Year,” he shares. “And, any time you want to get ahold of me please contact firstname.lastname@example.org or you can call our number at 204-552-0130.”
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