London City Airport bought with Canadian pension money

London City Airport has been sold to a consortium of investors led by a group of Canadian pension funds.

The price of the transaction was not disclosed but Sky News, citing rumors based on the airport’s reputed value, says it would have been around £2billion. Global Infrastructure Partners, the private equity group that bought London City in 2006, initially paid around a third of that amount, earning it a significant return on investment.

This reflects the substantial growth of the company over the past few years. The airport has seen passenger numbers more than double, from around two million at the time of the first acquisition to 4.3 million last year.

Global reportedly decided to sell London City last summer after its ambitious growth plans were thwarted and London Mayor Boris Johnson backed campaigners who opposed plans to double passenger numbers again by 2030.

This buyout was led by a union that includes the Ontario Teachers’ Pension Plan Board; Borealis Infrastructure, which invests the assets of the Ontario public sector pension plan; Aimco, which invests on behalf of 26 pension, endowment and government funds in Alberta, and Wren House, which is part of the Kuwait Investment Authority.

The BBC notes that the group has invested together several times before and already owns a number of airports around the world, including Belfast International, Birmingham, Bristol, Brussels and Copenhagen. He promised to increase the number of routes from the hub, which, due to its small size and location in London’s Docklands, is popular with bankers and city professionals.

Large pension funds invest their members’ money – either directly, through an in-house team, or outsourced to a third-party fund manager – so that it grows enough to meet contribution pledges future. They are big funders of infrastructure assets such as airports and toll roads because they tend to provide a stable source of revenue and are less prone to financial shocks.