The builders of the Melbourne Convention Centre have partnered in the latest boutique from Pinnacle Investment Management.
The Plenary Group, which to date has originated ten social infrastructure assets in Australia and Canada worth a total $3.7 billion, will partner with the Pinnacle ‘house of boutiques’ to launch a wholesale social infrastructure fund, capped at $500 million. The fund will be launched by Victorian Premier John Brumby this Wednesday, at the Melbourne Covention Centre which Plenary won the State Government tender to construct in 2006.
The fund will continue Plenary’s public-private partnership (PPP) model, which it claims has allowed it to continue winning and executing projects in an economic environment where the importance of government has dramatically increased.
Plenary manages assets through their construction, commissioning and operations phases.
The fund will be managed by a new entity, Plenary Investment Management, in which Plenary will have majority ownership and the Ian Macoun-founded Pinnacle a significant minority stake. Plenary will vend some of its existing Australian projects into the fund, including the Melbourne Convention Centre and some hospital assets, but the focus will be on delivering new social infrastructure projects.
Macoun said Plenary had hitherto been able to rely on banks’ debt funding for its projects, however the increasing number of projects in its pipeline, and the increasing expense of bank funding, meant equity was now being sought.
“The fund is targeting institutional investors – including public and private super funds – who want to invest in social infrastructure PPPs but haven’t been in a position to engage in costly and lengthy bidding processes or haven’t had access to projects of sufficient size to warrant investment,” Macoun said.
“I have long believed in the power of Australia’s super funds to do an enormous amount of good for the community and our society, without in any sense detracting from their fundamental duty, which is to maximise returns relative to appropriate levels of risk taken. I believed that when we kicked off QIC 20 years ago and I still believe it today. Social infrastructure is a great example of this – personally I think we are going to see a lot more super fund investment in infrastructure, it is ideal for them if undertaken properly,” Macoun continued.
Pinnacle already has an interest in an originator of ‘economic infrastructure’ deals, Palisade Investment Partners.