OTTP to sell its stake in Northern Star Generation

The Ontario Teachers' Pension Plan (OTPP) last week announced that it has entered into a definitive agreement to sell all of its 50% ownership interest in Northern Star Generation LLC (NSG) to GulfSun Power Holdings, LLC, an affiliate of Harbert Management Corporation.

Terms of the transaction, which is expected to close late in the second quarter of 2014 subject to receipt of customary regulatory approvals, are not being disclosed.

Based in Houston, Texas, NSG owns or has beneficial equity interest in eight electric generation facilities with a combined net capacity of approximately 1,235MW. The eight facilities are located across the United States, with four in Florida, two in Pennsylvania, one in Nevada and one in California.

GulfSun is backed by commitments from the California Public Employees' Retirement System (CalPERS) and Harbert affiliates. The UBS International Infrastructure Fund owns the other 50% of NSG, and will retain its interest.

Andrew Claerhout, Senior Vice-President, Infrastructure at Ontario Teachers' Pension Plan, said:

"During the more than 10 years that OTPP has been an investor in Northern Star Generation we have supported the company's growth and our investment has performed very well. OTPP will continue to pursue investment opportunities in the power sector in addition to our current 50% ownership stake in InterGen."

Teachers' Infrastructure Group manages a global portfolio of $11.7 billion of direct infrastructure investments, including water and wastewater, electricity distribution, gas distribution, airports, power generation, high-speed rail and port facilities.

With $140.8 billion in net assets as of December 31, 2013, the Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the defined benefit pensions of 307,000 active and retired teachers in Ontario.