Australia’s infrastructure investment scene is set to be shaken up by the return of Hastings founder Mike Fitzpatrick, who is part of a consortium that will today propose a management takeover to super funds invested in a major bank’s infrastructure business.

Investors in ANZ Infrastructure Services (ANZ IS), whose Energy Infrastructure Trust speaks for three-quarters of its $1 billion under management, will attend an information meeting in Sydney today on a proposal that ANZ sell its 80 per cent stake in the management company.

Under the proposal, Mike Fitzpatrick would purchase 50 per cent of the business,  ANZ IS managing director John Clarke would double his existing 20 per cent personal interest, while Les Fallick’s Principle Advisory Services, the placement agent for ANZ IS, would take the remaining 10 per cent.

It is understood that Clarke would commit to running ANZ IS for a further five years under the proposal and not exercise exit rights over his shares, while ANZ – itself an investor in the Energy Infrastructure Trust and major investor in the ANZ IS Diversified Infrastructure Trust – would continue to provide access to deal flow initiated by its corporate banking activities.

Fitzpatrick said yesterday it was clear ANZ had an interest in selling the infrastructure business, and he hoped investors would see the proposal as a good way of continuing to align their interests with those of ANZ IS management.

“John Clarke and ANZ IS have an outstanding track record, particularly given the current environment, and I’m hopeful investors will see the merits of the transaction and allow it to proceed,” he said.

Fitzpatrick said Clarke’s strong performance relative to many of his infrastructure peers was due to his more prudent use of leverage during the ‘boom years’.

Major external investors with the two ANZ IS trusts include Military Super & Benefits Scheme ($112 million equity according to its 2007/08 annual report), Catholic Super ($95 million), AGEST ($34 million), BUSS Q and TWU Super (roughly $25 million each).

Fitzpatrick, who is chair of the Australian Football League and finished three years on VFMC’s board in January, progressively sold his pioneering Hastings infrastructure business to Westpac between 2002 and 2005. It is understood that his ‘non-compete’ agreement with Westpac in the infrastructure space elapsed earlier this year.

ANZ CEO Mike Smith has been a vocal critic of several of the institutional banking businesses which flourished under his predecessor, John McFarlane, describing them as “cottage industries” while flagging a renewed focus on traditional commercial banking.  The bank has already stepped away from its securities lending and private equity businesses, while ANZ Specialist Asset Management (the responsible entity for Energy Infrastructure Trust) was recently replaced as manager of the Rabinov Property Trust.

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