OTPP Sells Its Stakes in Three UK Airports to Macquarie

Ivan Levingston and Mary McDougall of the Financial Times report Macquarie buys stakes in UK airports from Ontario Teachers’ Pension Plan:

Australia’s largest infrastructure investor has bought stakes in three UK airports from Ontario Teachers’ Pension Plan, marking the latest deal in the travel industry as investors capitalise on a post-pandemic rebound.

Macquarie Asset Management said on Wednesday it had acquired 25 per cent of London City airport, a 55 per cent share in Bristol airport, as well as a 26.5 per cent stake in Birmingham airport. It did not disclose the value of the stakes.

The acquisitions come with Macquarie’s ownership of infrastructure assets in the UK under scrutiny as a result of the crisis at Thames Water, which amassed massive debts and regularly paid dividends during a decade-long ownership to 2017 by the Australian investor.

Macquarie said the airports offered “unique propositions and catchment areas which present significant growth opportunities” and that it was committed to helping airlines expand their route networks.

The sale of Ontario Teachers’ stake in London City has completed, while the Birmingham and Bristol airport deals are subject to regulatory approval and are expected to complete by the end of this year.

Ontario Teachers acquired its holdings in Birmingham and Bristol in 2007 and 2008, respectively, before adding its share of London City in 2016.

The Macquarie deals follow a spate of transactions in the UK’s airport sector. US private equity group Blackstone struck a £235mn deal with Canadian pension investor PSP in March for a 22 per cent stake in the owner of the Aberdeen, Glasgow and Southhampton airports.

Private investors have also backed several other UK airports, including London’s Heathrow and Gatwick. Spanish construction company Ferrovial agreed last year to sell the majority of its stake in Heathrow to private equity group Ardian and Saudi Arabia’s sovereign wealth fund.

The Labour government has made airport expansion one of its areas of focus, with four out of London’s five major airports seeking to expand. London City airport received permission to expand its passenger numbers by more than a third last August.

Richard Lowe of IPE Real Assets also reports Ontario Teachers sells stakes in UK airports to Macquarie:

Ontario Teachers’ Pension Plan has sold its stakes in three UK airports to Macquarie Asset Management – more than 24 years after first entering the UK airports sector.

The Canadian pension fund has sold a 55% stake in Bristol Airport, a 26.5% interest in Birmingham Airport and a 25% share of London City Airport to Macquarie European Infrastructure Fund 7.

Ontario Teachers first invested in UK airport infrastructure in 2001, later acquiring direct stakes in Birmingham in 2007, Bristol in 2008 and London City in 2016.

In 2017, Ontario Teachers reduced its exposure to Bristol and Birmingham airports by selling stakes to New South Wales Treasury Corporation and Sunsuper Superannuation Fund (now Australian Retirement Trust). Ontario Teachers had previously taken full ownership of Bristol Airport in 2014, after acquiring Macquarie’s 50% stake. Stepstone is also listed as a minority owner of Bristol Airport.

Ontario Teachers has owned a 48.25% stake in Birmingham Airport since it acquired an additional 19.25% stake from Victorian Funds Management Corporation in 2015. The rest of the airport is owned by West Midlands metropolitan boroughs and employees.

The Canadian investor had co-owned London City Airport as part of a consortium including fellow Canadian pension funds Alberta Investment Management Corporation and OMERS, and Wren House Infrastructure, an arm of the Kuwait Investment Authority.

Charles Thomazi, senior managing director and head of infrastructure for EMEA at Ontario Teachers, said: “UK airport infrastructure has been a key area of focus for Ontario Teachers over the past 20 years and we’re very proud to have supported Bristol, Birmingham and London City as they’ve grown, developed and continued to strengthen the experience for passengers.

“Each airport plays an important role in its region and, with all currently undergoing expansion programmes, will continue to grow and deliver for their passengers, communities and the broader economy.”

Macquarie is acquiring the stakes on behalf of its latest European infrastructure fund, for which it raised €8bn. Last year, a previous fund in the series sold a stake in AGS, the owner and operator of Aberdeen, Glasgow and Southampton airports.

Gordon Parsons, senior managing director at Macquarie Asset Management, said: “As a leading investor in airports around the world, including the UK, we understand their importance to local communities and for economic growth. Collectively, Birmingham, Bristol and London City airports serve over 25m passengers each year and are a valued home for leading regional and global airlines.

“Each airport has a unique path for growth ahead, and we’re supportive of the management teams’ plans to deliver enhanced customer experiences and more routes to each of the communities they serve. We look forward to playing our part, as a long-term investor, to support all three airports on their development in the years to come.”

Capital Brief also reports Macquarie buys stakes in three UK airports from Ontario Teachers’ Pension Plan: 

The news: Macquarie Group has agreed to acquire ownership stakes in Bristol, Birmingham and London City airports from Ontario Teachers’ Pension Plan.

The numbers: The investment by Macquarie Asset Management, via its Macquarie European Infrastructure Fund 7, was for an undisclosed amount and includes a 55% stake in Bristol Airport, a 26.5% stake in Birmingham Airport and a 25% stake in London City Airport.

The London City Airport deal has reached financial close, while the acquisitions of the other two airports are expected to conclude by the fourth quarter of fiscal 2025, subject to regulatory approvals, the company said.

The three airports collectively serve over 25 million passengers each year.

Macquarie said it plans to support the airports over the long term by expanding route networks, improving passenger experience and working with management and stakeholders on sustainability strategies.

The context: Macquarie has invested in airports globally for over 20 years and operated in the UK for 35 years. It has previously held stakes in airports in Australia, Belgium, Italy, Denmark, Ecuador, Colombia and the UK.

Last year it exited its ownership in AGS Airports, where it had invested £250 million ($516 million).

It comes a day after Macquarie said it had closed the $US6.8 billion Macquarie Infrastructure Partners VI fund for investments in the Americas, alongside $US1.3 billion in co-investment capital.

Earlier today, Ontario Teachers' issued a press release on this deal:

18 June 2025 - Ontario Teachers’ Pension Plan Board (Ontario Teachers’) announces today that it has reached an agreement to sell its interests in three UK airport assets - Birmingham Airport (BHX), Bristol (BRS) and London City Airport (LCY) - to Macquarie Asset Management (Macquarie).

Ontario Teachers’ has been a long-term investor in these airports, contributing to their growth, modernisation and decarbonisation over the past two decades. Ontario Teachers’ first invested in UK airport infrastructure in 2001, later acquiring direct stakes in Birmingham in 2007 and in Bristol in 2008. A 25% stake in London City Airport was acquired in 2016. These airports have continued to serve tens of millions of passengers annually, driving connectivity across the country, continent and globe and together, play a central role in regional economic growth across the UK, contributing collectively over £3.7 billion in gross value added (GVA) and 37,600 jobs.

Charles Thomazi, Senior Managing Director and Head of Infrastructure in EMEA at Ontario Teachers’ said:

“UK airport infrastructure has been a key area of focus for Ontario Teachers’ over the past 20 years and we’re very proud to have supported Bristol, Birmingham and London City as they’ve grown, developed and continued to strengthen the experience for passengers. Each airport plays an important role in its region and, with all currently undergoing expansion programmes, will continue to grow and deliver for their passengers, communities and the broader economy. We’d like to thank our fellow shareholders for their collaboration and our management teams and airport staff for their dedication and support, not least during the Covid-19 pandemic. We are confident that BHX, BRS and LCY will continue to flourish and are pleased to be passing the baton to new investors Macquarie as they support them in the next stage of their growth.”

During Ontario Teachers’ ownership, highlights include:

Bristol Airport

• Significant growth to over 10 million passengers per annum, with a 72% increase in traffic since 2008 and the fastest recovered major UK Airport post-Covid 19 pandemic;
• Investment of over £300m over the past decade, including in improving the customer experience, Next Generation security, new retail & catering facilities, car parking and the development of a new public transport Interchange
• Strong growth in the number of airlines operating from the airport, providing increased choice for customers to the 115 destinations it serves; and
• Level 4+ accreditation in the international Airport Carbon Accreditation (ACA) scheme; airport on track to achieve a net zero position for scope 1&2 emissions by 2030.

Birmingham Airport:

• 35%+ growth in passengers, from 9.6 million in 2007 to over 13 million at the end of 2024
• Significant investments totalling over £425m made over past 18 years to modernise and expand BHX, including extension of the runway, the opening of a new pier, a new baggage system, upgraded security and check in areas and an enhanced passenger drop off area;
• Multiple new flight routes added, today provided by over 30 airlines connecting travellers to over 165 destinations;
• Level 3 accreditation in the (ACA) scheme since 2023; airport on track to meet commitment for operations to become net zero by 2033.

London City Airport:

• Significant investments by shareholders over last 9 years totalling over £600 million to expand LCY to accommodate larger aircraft and expand facilities, with development projects including the UK’s first remote digital air traffic control tower, expansion of the airside footprint through reclamation of land as part of the City Airport Development Programme (CADP), Next Generation security expansion and a new baggage facility;
• Continued focus on enhancing the passenger experience and destination choice and Level 4+ accreditation in the international Airport Carbon Accreditation (ACA) scheme since 2019.

The sale of Ontario Teachers’ stake in London City Airport has reached financial close following signing. The sales of its stakes in Birmingham and Bristol airports are subject to regulatory approval, and are expected to complete in Q4 2025.

About Ontario Teachers’ Pension Plan

Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $266.3 billion as at December 31, 2024. Ontario Teachers' is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 343,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn. 

Alright, even though financial details are not disclosed, this is a significant distribution for Ontario Teachers' as it was invested in these three UK airports for a long time.

It acquired its holdings in Birmingham and Bristol in 2007 and 2008, respectively, before adding its share of London City in 2016. 

As the press release states, significant value added was obtained on all three airports as Teachers' and its fellow shareholders implemented a plan to contribute to growth, modernize and decarbonize their operations.

Macquarie Asset Management, via its Macquarie European Infrastructure Fund 7, acquired a 55% stake in Bristol Airport, a 26.5% stake in Birmingham Airport and a 25% stake in London City Airport. 

Macquarie is no stranger to airports. Late last year, along with Ferrovial, it sold its stakes in AGS Airports to AviAlliance, PSP Investments' airports platform:

Macquarie Asset Management (Macquarie), via Macquarie European Infrastructure Fund 4, and Ferrovial have reached an agreement to sell AGS Airports to AviAlliance.¹ The terms of the transaction represent an enterprise value for the business of approximately £1.53 billion.

AGS Airports owns and operates the primary airports serving Aberdeen, Glasgow and Southampton. These airports provide essential domestic and international connectivity to three important economic and population centres across the UK and serve more than 10.8 million passengers annually.² The airports contribute approximately £2 billion in Gross Value Added to the UK economy per year and support more than 30,000 jobs across a sophisticated supply chain.³

AGS Airports was established as a 50:50 joint-venture between Macquarie and Ferrovial following their 2014 acquisition of the airport portfolio from Heathrow Airport Holdings Limited. A partnership approach with Ferrovial has enabled AGS Airports to invest £250 million to deliver vital improvements, including:

• The largest investment in Aberdeen International Airport’s capacity since its main terminal was opened in 1977. The £20 million investment increased terminal space by 50 per cent to accommodate enhanced security facilities, an increased retail offering, new areas for baggage reclaims, expanded business lounges, and new immigration and arrivals facilities.
• A £9 million investment to revamp infrastructure at Glasgow Airport to accommodate all wide-body aircraft alongside improvements to a dedicated pick-up and drop-off facility, new car rental centre, expanded security facilities, and improved retail and lounge options.
• A £17 million runway extension at Southampton Airport, which opened in 2024, securing the airport’s future contribution to local communities and businesses across the South East and importantly allowing for the airport to be able to operate larger aircraft and diversify its airline base.

During the COVID-19 pandemic, when UK air arrivals fell by 89 per cent between April 2020 to January 2021⁴, Macquarie and Ferrovial also provided vital support to ensure the ongoing resilience of the airports group despite the unprecedented challenges posed to its day-to-day operations.

Martin Bradley, Head of Infrastructure for Macquarie Asset Management in EMEA, said: “Since 2014, we have worked in partnership with Ferrovial to support around £250 million of investment by AGS Airports aimed at delivering a better experience for passengers travelling via Aberdeen, Glasgow and Southampton airports. Following this decade of investment, we are pleased to be passing the baton to AviAlliance to unlock the next phase of growth.”

Andy Cliffe, Chief Executive Officer of AGS Airports, said: "Over the past 10 years, Macquarie and Ferrovial have played a central role in unlocking our full potential. Their close partnership with the teams across our three airports ensured we had the support to invest in our passenger offering while improving our operations. We are grateful for their close stewardship and look forward to continuing to develop our services and beneficial impact on passengers and communities across the regions of Aberdeen, Glasgow and Southampton.”

Macquarie has invested or arranged more than £60 billion in UK infrastructure over the past two decades and is supporting £20 billion of investment across its portfolio over the coming years to deliver improved energy, transport, utilities, social and telecommunications infrastructure in England, Wales and Scotland. 

The transaction is expected to reach financial close by Q1 2025, following the satisfaction of customary closing conditions and regulatory approvals. 

1. A wholly owned subsidiary of Public Sector Pension Investment Board (PSP Investments)
2. LTM June 2024 passenger numbers across Aberdeen, Glasgow and Southampton Airport, AGS Airports
3. https://www.glasgowairport.com/media-centre/2019-and-older/glasgow-airport-contributes-1-44-billion-to-scottish-economy-and-supports-over-30-000-jobs/
4. GOV UK statistics relating to passenger arrivals in the United Kingdom since the Covid-19 outbreak 

Clearly Macquarie knows how to add value to airports it invests in and given that UK regulators aren't too happy about how they managed Thames Water, I'm confident they will take the necessary steps to work closely with existing shareholders and add value to the airports they just acquired stakes in.

Now, what will Ontario Teachers' do with the funds it receives? It will invest them elsewhere as opportunities arise.

These airports deals demonstrate how large alternative asset managers can compete with the Maple Eight or work with them to acquire and sell prized assets.

If it makes sense to sell stakes in an infrastructure asset and they get a decent price, why not sell?

It's part of managing their portfolio and yes, it will also boost returns of OTPP's Infrastructure group this year.

Below, Ontario Teachers’ Pension Plan, one of the world’s largest and most influential institutional investors manages nearly $200 billion dollars in assets globally. Global markets are in flux on the back of geopolitical & trade uncertainties While emerging technologies like AI threaten to disrupt business models across sectors. Prashant Nair caught up with Jo Taylor, the CEO At Ontario Teachers’ Pension Plan to discuss the impact of potential changes in the global economy and also the Plan's investment strategy in India (March 30, 2025).

Also, Faultline recently reported on the battle over London's $80 billion airport. Worth watching this, very interesting and has nothing to do with why OTPP sold its stakes in these three UK airports.