Cost of Eyjafjallajökull: Canadians and Koreans count their losses.

Saturday, April 24, 2010

By Mark Cobley

Empty skies and chaos at airports as silica dust blots out brilliant springtime sun in Northern Europe dominates pictures in newspapers today, as Eyjafjallajökull continues to belch to the east. Much focus is on the financial losses to the airports and airlines, thought to amount to £100m (€114.2m) in the UK alone, but who ultimately bears these costs?

Well spare a thought for Korean pensioners and teachers in Ontario.

Korea's national pension fund bought 12% of London's Gatwick airport when it was sold by Spanish owners in February this year. Meanwhile the Canadians will have found themselves particularly exposed to "volcano risk" this morning: the C$100bn (€73.7bn) Ontario Teachers' Pension Plan has stakes in both Birmingham and Bristol airports, and also Copenhagen, which some fear will be shut later this weekend as the ash drifts south from Norway.

This is probably why it has a globally-diversified portfolio, with a stake in Sydney's airport too.

A fellow Canadian fund, the Caisse de Dépôt et Placement du Québec, owns 26% of BAA, the UK airports operator that runs Heathrow and had to sell Gatwick after a competition ruling. So at least the Canadians are spreading their volcano risk around.

Global Infrastructure Partners, a $5.6bn (€4.1bn) investment-fund joint venture between General Electric and Credit Suisse, will also be nervously watching the skies over London for continued signs of ash-clouds this weekend. It has a 75% holding in London City Airport and the lion's share of Gatwick too.

Even the Arabs may have something to worry about. The Abu Dhabi Investment Authority is believed to have acquired a nearly 15% stake in Gatwick from Global Infrastructure Partners, according to a report in the FT.

GIP, the Ontario Teachers' Plan, ADIA, and the CDPQ could not be reached for comment this morning.
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