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Ontario Teachers' $200M Aspenleaf Stake Sale Amid Green Shift

Ontario Teachers' Pension Plan to sell its $200 million stake in Aspenleaf amid pressure to reduce carbon footprint.

By Mackenzie Crow

ᐧ

4/29, 14:59 EDT
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Key Takeaway

  • Ontario Teachers’ Pension Plan is negotiating the sale of its $200 million stake in Aspenleaf Energy, valuing the company at $800 million.
  • The decision to sell reflects a move away from fossil fuels amid pressure to reduce carbon footprints, despite not exiting the sector entirely.
  • Aspenleaf, backed by ARC Financial Corp., specializes in revitalizing financially stressed energy assets in western Canada.

Ontario Teachers' Pension Plan Eyes Aspenleaf Exit

The Ontario Teachers’ Pension Plan, holding assets worth C$247.5 billion ($181 billion), is reportedly in discussions to divest its stake in Aspenleaf Energy Ltd., a Canadian oil and gas producer. The stake, valued at approximately $200 million, represents a significant portion of Aspenleaf's total valuation of around $800 million. This move comes as the pension fund, alongside other investors, faces increasing pressure to lower the carbon footprint of its investment portfolio. Despite this, the Ontario Teachers’ fund has not committed to a complete withdrawal from the fossil fuels sector.

Aspenleaf's Strategic Position in the Energy Sector

Aspenleaf Energy, supported by both Ontario Teachers’ and ARC Financial Corp., specializes in the exploration and acquisition of light oil and liquids-rich gas assets across western Canada. The company's strategy has been to target financially distressed energy firms, leveraging its operational expertise and capital infusion to revitalize these entities. With projects in Alberta's Swan Hills, Leduc, and Twining fields, Aspenleaf represents a key player in the region's energy landscape.

ARC Financial's Role and Investment Philosophy

ARC Financial Corp., a Calgary-based private equity manager with a focus on the energy sector, has been a pivotal backer of Aspenleaf alongside Ontario Teachers’. Since its inception in 1989, ARC has transitioned from offering corporate advisory services to managing private equity investments, raising 11 energy-focused funds that amount to over C$6.3 billion of committed capital from global institutional investors. This shift underscores ARC's long-term commitment to the energy sector, despite the evolving market dynamics and increasing scrutiny over environmental impacts.