Palisade gets Perpetual leg-up into infrastructure middle market

Palisade Investment Partners will seek about $200 million from wholesale investors when it reopens its newly-purchased Perpetual unlisted infrastructure funds in August, promising a ‘pure’ alternative to infrastructure driven out of investment banks.

Backed by Ian Macoun’s boutique incubator, Pinnacle, Palisade yesterday announced it would buy three Perpetual funds with $250 million under management, and employ the four Sydney-based members of Perpetual’s seven-member infrastructure team – team head Roger Lloyd, Karen Fox, Vicki Rigg and Jim Fanning. (Two of the Melbournians, Brett Lazarides and Sandra Lee, recently moved to UniSuper.) Palisade’s joing managing director, Ian Mitchell, said the investment banking experience of himself and co-founder Peter Salisbury exactly complemented the funds management skills of the Perpetual four. He said Palisade had a “;considerable pipeline”; of investment opportunities, many of them in the renewable energy space. The group was not interested in “;billion dollar inner city toll roads”; where competitive tender situations had lead to aggressive leverage, but would focus on the underserviced market for deals with an enterprise value roughly between $50 million and $100 million. Rather than “;going head to head with the Macquaries and Babcocks”;, Salisbury said Palisade would probably find itself tendering against trade buyers such as engineering groups, and in this interest rate environment may even favour all-equity deals. Mitchell said deals could be structured so that super funds could take on construction risk if they wanted to, and also the traditional long-term operating risk of infrastructure, in deals such as “;diesel replacement”; – where wind or solar power are offered to towns that are not part of the national electricity grid. The new employees will be given equity in Palisade, and Pinnacle will retain what Mitchell describes as a “;significant but minority interest”; in the manager.