Canada pension fund the Ontario Municipal Employees Retirement System (OMERS) is nearing an agreement on the purchase of Inchcape Shipping Services, the marine management services company owned by the private equity arm of troubled state investor Dubai World, according to the Financial Times.

The deal would be the first OMERS has carried out in Europe after opening a London office six months ago, and reflects a trend among Canadian pension funds to make direct investments instead of going through private equity funds as limited partners.

Carlyle, Cinven, CVC Capital Partners and General Atlantic are also among the final round bidders for ISS, but OMERS is reportedly the favourite of the company’s management. The Toronto pension fund has shown a willingness to hold onto assets for longer than the standard three- to five-year private equity investment lifespan and has a more hands-off management approach, which may explain the preference of the ISS higher-ups.

Dubai World private equity arm Istithmar acquired the company from Electra Private Equity in January 2006 for $285m, at the start of a two-year spending spree that included the purchase of luxury New York department store Barneys for $942.3m and a stake in live entertainment group Cirque du Soleil. [Read More]