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 for the deal has not been disclosed but Sky News, citing rumours based on the airport's reputed value, says it would have been around £2bn. Global Infrastructure Partners, the private equity group that bought London City back in 2006, originally paid around a third of that amount, giving it a significant return on its investment.

This reflects substantial growth for the business in recent 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.

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Global was said to have 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 syndicate that includes the Ontario Teachers' Pension Plan Board; Borealis Infrastructure, which invests the assets of Ontario's public sector pension scheme; Aimco, which invests on behalf of 26 pension, endowment and government funds in Alberta, and Wren House, part of the Kuwait Investment Authority.

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

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