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Brexit hasn’t dimmed appetite for UK assets, Ontario’s giant pension fund says

Brexit hurt short-term returns at Ontario Teachers' Pension Plan, but it hasn't changed U.K. investment plans, said Andrew Claerhout, the fund's senior vice president of infrastructure and natural resources.

"A 100 percent of our liabilities are Canadian-dollar denominated. So as the pound is dropping precipitously, that has hurt our short term performance in Canadian dollars," Claerhout told CNBC's "Squawk Box" on Monday.

The fund, which is Canada's largest pension plan, had $171.4 billion in net assets at the end of 2015, with more than $15 billion in infrastructure assets.

In the wake of the late June referendum vote to exit the European Union, the pound has tumbled. At 10:13 a.m. HK/SIN, the pound was fetching $1.2151, compared with a high of $1.5018 before the vote.

But that's not dampening the fund's enthusiasm for British assets.

"The vote to leave the [European Union] has had short-term impacts on the pound, but it has not had a long-term impact on the desirability of the U.K. market," he said.

"If you look at the reason we've invested in the U.K. historically — the fact that it is an open market, the fact that it is very transparent and that the rule of law is secure, the fact that the regulatory oversight to the extent that it's a regulated asset is very strong — These things have not changed," he said.

Claerhout noted that the pound's drop could make U.K. assets more attractive, as the fund was a long-term investor, willing to hold asset for decades.

He said the fund was currently working on a deal in the U.K., although it wasn't motivated by the pound's drop.

"It's an outstanding asset, but if we happen to buy it at a time of weakness in the pound, that's a bonus," he said.

Luke MacGregor | Bloomberg | Getty Images

When it comes to his remit of infrastructure, Claerhout was hopeful that his fund would soon find more opportunities closer to home.

For one, the Canadian government under Prime Minister Justin Trudeau has promised to spend 120 billion Canadian dollars ($91.15 billion) in infrastructure projects over the next few years.

"We're quite encouraged by that," Claerhout said. "We're a Canadian dollar investor. If we could invest more in Canadian dollar infrastructure, that would solve some of our headaches."

He noted that Canada, like the U.S., hasn't offered up much infrastructure to invest in.

Claerhout was also hopeful that the U.S. election would yield an administration that would be friendlier to infrastructure projects and investors, such as the pension fund.

"The U.S. has been the sleeping giant of the infrastructure market globally. It should be the largest infrastructure market by far in the world and it's not. Frankly, the Australian market, with 25 million people is much more active than the U.S.," he noted.

But while the pension fund has primarily focused its infrastructure investments in OECD countries – or the 35 mostly developed-market countries in the Organisation for Economic Cooperation and Development – Claerhout noted that Asia was also of interest as it has a clear need for infrastructure.

He said the fund was closely watching the One Belt One Road initiative, which aimed to develop trade routes through Asia and into Europe and the Middle East. But he noted that some countries were more attractive to the Ontario-based fund than others.

"If you look at the countries that are involved in One Belt One Road, there's developed Asian countries and there're less developed Asian countries," he said. "From Ontario Teachers' standpoint, we would be less likely to get involved in Myanmar than we would a more developed market."

Additionally, Claerhout noted that the fund would be moving carefully into Asian investments as it hasn't been active in the region historically.

"We do believe there's a great long term opportunity here," he said, but noted that the first steps would be slow.

"We're looking for partners to invest in in Asia that can help us understand some of the local market dynamics, can give us the confidence that we need to take a bigger role in time looking at our own transactions here."

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—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1