PSP Investments completes 7.51% acquisition in 407 ETR from CPP Investments

The Public Sector Pension Investment Board has officially acquired a 7.51% minority stake in the 407 Express Toll Route from Canada Pension Plan Investment Board, reshaping the ownership structure of one of Canada’s most critical transport assets. The all-electronic, 108-kilometre toll highway—commonly known as 407 ETR—serves over three million drivers per week across the Greater Toronto Area and is considered one of North America’s most valuable brownfield infrastructure assets.

This transaction marks the largest-ever Canadian infrastructure investment by PSP Investments. The Montreal-based pension fund joins long-term co-owners CPP Investments and Ferrovial in overseeing the strategic management and development of the privately operated toll road. Concurrently, Spanish infrastructure developer Ferrovial has expanded its holding through the acquisition of a 5.06% stake from AtkinsRéalis, while CPP Investments has purchased an additional 1.70% portion. Following these moves, the exit of AtkinsRéalis from 407 ETR is now complete.

The finalized post-transaction ownership distribution now stands as follows: Ferrovial at 48.29%, CPP Investments and associated institutional investors at 44.20%, and PSP Investments at 7.51%.

Why is 407 ETR considered Canada’s most valuable toll road asset?

The 407 Express Toll Route plays a vital role in decongesting east–west traffic across the northern GTA. As one of the world’s longest automated toll highways, its operational model eliminates barriers and human toll collection, enabling a seamless commuting experience for millions. The corridor was first privatized in 1999 under a 99-year lease and has consistently demonstrated reliable returns for its institutional investors.

Its location along one of Canada’s most rapidly urbanizing regions gives it strategic importance in regional mobility, long-term infrastructure planning, and transport modernization. With limited substitutes for high-speed east-west connections and accelerating population growth, the tollway continues to post resilient traffic volumes and inflation-linked toll revenues.

Why did PSP Investments buy into 407 ETR now?

PSP Investments’ managing director and global head of infrastructure, Sandiren Curthan, characterized the transaction as a milestone investment aligned with the pension board’s long-term strategy. He noted that the 407 ETR not only fits well into PSP’s global road infrastructure portfolio but also offers deep exposure to high-performing Canadian assets that are already cash-flow positive.

Curthan added that the toll highway’s scale, electronic tolling model, and sustained user base offer the kind of reliable and regulated returns that align with PSP’s pension-focused mandates. He described the acquisition as a continuation of the board’s push to increase allocations toward core infrastructure and essential services.

CPP Investments, meanwhile, repositioned its stake in a way that optimizes internal returns while maintaining material exposure to what it calls its largest infrastructure holding in Canada. According to James Bryce, managing director and head of infrastructure at CPP Investments, the realignment enables the fund to rebalance its broader infrastructure portfolio without reducing its overall conviction in the 407 asset. Bryce emphasized continued collaboration with PSP Investments, Ferrovial, and the 407 ETR management team as the ownership enters a new chapter.

How did the 407 ETR ownership structure change in 2025?

While no official price was disclosed by the parties in the public announcement, industry estimates place PSP Investments’ 7.51% acquisition at approximately CAD 2.39 billion. Ferrovial’s parallel acquisition of 5.06% from AtkinsRéalis is estimated at CAD 1.99 billion, split between direct purchase and a pre-negotiated call option execution. CPP Investments acquired 1.70% of the former AtkinsRéalis stake, completing the reallocation of the full 6.76% shareholding previously held by the engineering firm.

This restructuring also marks the final departure of AtkinsRéalis—formerly SNC-Lavalin—from the ownership group. The Montreal-based firm had been part of the project since its privatization era, but had publicly signaled a strategic exit from non-core assets as part of a broader pivot toward engineering and professional services.

Ferrovial, now holding 48.29%, remains the dominant shareholder. With extensive global experience in operating toll roads and airport infrastructure, the Spanish infrastructure conglomerate is expected to continue leading operational modernization, including possible adoption of AI-driven traffic management and new electronic tolling technologies.

What does the 407 ETR deal reveal about pension fund infrastructure strategy?

Canada’s pension funds have aggressively ramped up direct infrastructure ownership over the past decade, positioning themselves as global leaders in long-horizon, inflation-protected assets. Roads like the 407 ETR are particularly attractive given their regulated pricing mechanisms, consistent demand, and long-term concessions. Unlike greenfield projects, brownfield assets offer immediate returns without the construction risk, making them ideal for pension portfolios seeking stable cash flows.

PSP Investments has invested heavily in transport and utilities globally, with previous stakes in airports, seaports, and toll roads across Europe, Australia, and Latin America. Its decision to anchor domestically through the 407 ETR signals a return to Canadian core infrastructure, particularly as the federal government signals renewed interest in public-private infrastructure partnerships.

What upgrades and innovations could follow the 407 ETR stake reshuffle?

With a recalibrated investor group focused on stability and long-term value, analysts expect the 407 ETR to pursue incremental upgrades rather than transformational overhauls. Future changes could include dynamic toll pricing, electric vehicle prioritization lanes, and sustainability-linked enhancements. These would be driven by both user demand and climate-linked investment frameworks increasingly embedded in pension fund mandates.

There is also potential for deeper integration with regional transit planning. As Ontario’s urban sprawl continues, the need for multi-modal transit infrastructure grows, opening the door to coordinated infrastructure investments that include rail and digital tolling platforms. Any such moves would likely require provincial cooperation and potential renegotiation of aspects of the 99-year lease.

How are institutional investors and analysts reacting to the 407 ETR shake-up?

Industry observers have largely praised the transaction for reinforcing the toll road’s institutional backing. Analysts from major Canadian infrastructure consultancies noted that the reshuffled ownership creates “clarity and cohesion” among long-term investors who are not under pressure to exit or divest. This adds stability to the tollway’s strategic roadmap and ensures that long-term performance—not short-term political or market pressures—drives future decisions.

There is also optimism about the potential for enhanced asset management practices, including digitization, AI-led maintenance forecasting, and ESG-aligned operational targets. Given Ferrovial’s extensive portfolio and global best practices, as well as PSP’s conservative capital deployment strategy, analysts expect a balance between innovation and risk management.

Is the new ownership structure a turning point for 407 ETR’s future?

The entry of PSP Investments into the 407 ETR shareholder group, coupled with Ferrovial’s expansion and CPP’s strategic reshuffle, signals a new phase of long-term institutional stewardship for one of Canada’s most strategically located road assets. With congestion in the GTA projected to intensify and infrastructure demand growing, the realigned ownership strengthens the highway’s capacity to adapt to emerging mobility needs.

More importantly, it demonstrates how Canada’s pension giants continue to anchor core infrastructure with global relevance. Whether through toll optimization, green mobility integration, or smart-road upgrades, the 407 ETR stands as a model for sustainable and investor-backed infrastructure in the 21st century.