Monday, June 24, 2024

QIC eyes pivot back to Australia as European partner Tucker exits – exclusive

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QIC is looking to pivot its focus back to its domestic Australian market in a move that has seen the departure of Giles Tucker, partner and leader of its European infrastructure team, Infrastructure Investor has learned.

Tucker is departing the Queensland government-owned group after nine years, having joined in March 2015 from Royal Bank of Canada and sat on the boards of significant European assets Brussels Airport and Thames Water.

His departure comes in what sources have described as a restructuring led by QIC’s chief executive Kylie Rampa, who took over the reins in April 2022. The move will see QIC focus more on its Australian base, with about 70 percent of investments in its current fund – QIC Global Infrastructure Fund II – slated for Australia, while the predecessor fund had a target more of around 60 percent.

Fundraising momentum for QGIF II is believed to be slow, with only about $500 million raised to date ahead of its $3.5 billion target, sources said. Infrastructure Investor revealed in May 2022 the plans to launch QGIF II, with a target then slated of between $3 billion and $5 billion and to be raised in US dollars to attract broader international support. QIC declined to comment on fundraising. A source said Kirsten Whitehead, an Australia-based partner in portfolio management, has returned from a year’s sabbatical to manage the fund and sit on its investment committee.

QGIF I was first launched in 2015, reaching a A$2.35 billion ($1.5 billion; €1.4 billion) close in March 2017. However, the vehicle was reopened in 2021, raising an additional A$1 billion.

Tucker’s departure is believed to have come alongside other members of QIC’s global infrastructure team. Amelia Henning, who joined as principal from Barings in August 2022, has also departed, while it is believed there are planned departures of principals in QIC’s New York office.

Sources said that in addition to focusing more on Australia, the move is also part of QIC’s plan to focus less on international transport assets and more on the energy transition sector. A sales process for CampusParc, the Ohio State University parking concession system leased to QIC in 2012 before it began making investments through funds, is believed to be underway, while other core asset divestments in the US are also slated to begin soon.

QIC has interests in 22 infrastructure assets across five OECD countries, comprising A$32.8 billion in assets under management in the transport, energy and utilities and social infrastructure sectors. Its most recent deal came in April last year when it bought 50 percent of Vector Metering, a smart meter business in Australia and New Zealand. The business has been renamed Bluecurrent and is serving as a seed asset for the new fund. QIC also recently added capital into existing US-based clean energy platform Generate Capital, amid a wider $1.5 billion capital raise from other new and existing investors.

“We see a generational opportunity for the infrastructure asset class to facilitate the energy transition and improve the resilience of essential assets, and we will continue to leverage our 17-year track record as a market leader in Australia, built by a dedicated team and a commitment to thematic sector insight,” QIC’s head of infrastructure Ross Israel said in a statement to Infrastructure Investor. “We have been investing in the energy transition thematic for over a decade with several leading platforms including Tilt Renewables, Pacific Energy and Bluecurrent.

“Australia represents a compelling investment destination in particular for the energy transition given the scale of the transition requirement, regulatory and political tailwinds, and Australia’s critical minerals endowment and position to provide them into global supply chains.”

Israel added that QIC actively manages A$9.5 billion in energy transition investments globally with our energy platform assets aiming to invest more than A$15 billion in the energy transition over the next five years.

“The US represents 17 percent of our portfolio and incorporates a presence across 30 states; the UK and Europe represents 5 percent of the portfolio,” he said. “These assets are supported by an experienced team of 148 people, comprising 84 dedicated investment professionals and 64 non-executive directors and advisors with a breadth of experience.”

QIC’s infrastructure investments are generating an IRR of 13.8 percent up to the end of June 2023, its 2022-23 annual report revealed in October. This figure stood at 14.1 percent the previous year.

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