Public Sector Pension Investment Board (PSP Investments) has made waves with its recent announcement to acquire a 7.51% stake in the 407 Express Toll Route (407 ETR) from the Canada Pension Plan Investment Board (CPP Investments). This significant investment is part of strategic moves to bolster infrastructure assets in Canada, particularly as traffic demands increase across Ontario.
On March 13, 2025, PSP Investments revealed its plan to pay approximately CAD 2.39 billion for the stake, which is set to be finalized by Q2 2025. At the same time, AtkinsRéalis Group Inc. has agreed to sell its remaining 6.76% interest to CPP Investments and Ferrovial, increasing Ferrovial’s ownership to 48.29%. The overall valuation of 407 ETR stands at approximately CAD 41.27 billion.
This transaction positions PSP Investments alongside established players—CPP Investments and Ferrovial—in ownership of the 407 ETR, which serves over three million vehicles weekly and spans 108 kilometers as Ontario’s only all-electronic, barrier-free toll highway. Notably, this acquisition is reported as PSP Investments’ largest infrastructure commitment to date, signaling its growing focus on high-quality, road assets.
“We are pleased to join CPP Investments and Ferrovial in the 407 ETR ownership group. PSP Investments has deep expertise in the transportation sector and will support the long-term stability and reliability of this road,” said Sandiren Curthan, Managing Director and Global Head of Infrastructure Investments at PSP Investments. “This investment exemplifies our broader infrastructure strategy.”
CPP Investments will also benefit from this arrangement, optimizing returns for its contributors. James Bryce, Managing Director and Head of Infrastructure at CPP Investments, noted, “This transaction enables CPP Investments to optimize returns for CPP contributors and beneficiaries...while continuing to own a significant stake in high-quality business.”
The added infrastructure capital not only promises to improve traffic flow but also reflects the continued collaboration among involved parties. Ignacio Madridejos, CEO of Ferrovial, expressed enthusiasm about the partnership: “We are pleased to have PSP Investments join Ferrovial and CPP Investments as shareholders... to improve mobility and growth in the region.”
Such collaborations are increasingly pivotal as urban centers such as Toronto experience mounting traffic congestion. The strategic financial moves of PSP Investments, CPP Investments, and Ferrovial allow these entities to share risks and tap the growing market potential.
Ferrovial’s involvement with the 407 ETR dates back to 1999, showcasing its long-term commitment to the asset. This acquisition is structured with various purchase phases, including immediate and deferred payments, which enables targeted cash flow management and investment alignment with the expected future performance of 407 ETR.
407 ETR has positioned itself as not just a toll route but as part of the Greater Toronto Area’s infrastructure backbone, necessitating continuous upgrades and investment to accommodate rising traffic demands. This investment plan emphasizes the importance of structured financing solutions and the commitment of major investments to augment public infrastructure.
Both PSP and CPP Investments have been proactive over the last decade, amassing significant infrastructures under management, with PSP Investments reporting CAD 264.9 billion net assets under management as of March 31, 2024, and CPP Investments' fund totaling CAD 699.6 billion as of December 31, 2024. Their substantial financial indexes fortify their capability to handle civic infrastructure challenges increasingly faced by urban populations.
The closing conditions for the transactions require reliance on obtaining customary regulatory approvals and fulfilling all contractual obligations. These requirements are feasible under expected economic conditions, considering the strategic need for enhanced transportation options and regional connectivity.
Ferrovial’s strong financial position with gross profit margins close to 87% is indicative of its adeptness at managing infrastructure projects and anticipated returns from ventures like the 407 ETR, which has demonstrated profitability and operational excellence. This partnership aims to deliver improved service efficiency for the countless individuals and businesses utilizing the roadway.
The 407 ETR has substantially contributed to easing congestion and facilitating economic growth regions beyond its tolls. With commitments from PSP Investments, Ferrovial, and CPP Investments, the future of this highway looks secured, leading to improved experiences for daily commuters and shipments alike.
The awareness of infrastructure stability raises prospects for dynamic community engagement as these companies work collectively toward sustainable and effective management. The integration of these significant assets sets the stage for future developments to shape the urban mobility experience.
Overall, this accord signals renewed investment dynamism within the Canadian infrastructure sphere. By intertwining strategic interests and financial mettle, these firms aim to bolster Canadian transport solutions considerably.