Australian infrastructure fund manager Palisade Investment Partners is seeing attractive opportunities in mid-sized infrastructure deals, announcing it has acquired a 50-per-cent stake in the Victorian regional port of Portland for $66.5 million.
Palisade purchased the stake in the port, which provides a transport hub for natural resource industries such forestry, grain and mineral sands, from AIX, Hastings Fund Management’s listed infrastructure fund.
The deal continues a focus on mid-market deals, with the manager shying away from high-profile large deals, whose valuations are becoming expensive, Palisade’s director of investments Roger Lloyd says.
“The focus is very much on mid-market transactions so we are not pursuing the highly contested transactions that you see a lot of the funds going for because there is a belief that there is a bit too much heat at that end of the market,” Lloyd says.
“There are a lot of opportunities in Australia at the smaller end. This port transaction fitted our mandate very well. It is not the port of Brisbane that went for higher multiples; it is a regional port and the size fitted perfectly.”
Lloyd says that the fund typically targets deals requiring equity investments of between $75 million and $125 million.
Palisade in portions and personnel
Since Palisade acquired the management rights to two infrastructure funds from Perpetual in 2008, the business has enjoyed exponential growth, with assets under management growing from $200 million to more than $695 million.
Assets are split between three funds covering core, social and regional infrastructure.
Its diversified infrastructure fund has core assets including airports in the Northern Territory, a power station in Western Australia and a wind farm in South Australia.
The regional infrastructure fund focuses on food, water, waste and energy assets and includes regional livestock yards and a waste-treatment plant.
Palisade’s social infrastructure fund includes the 229-bed Casey Hospital in Melbourne and the operation of nine police and courthouse complexes in six locations across regional South Australia.
Lloyd says the manager has a further $110 million it is yet to allocate to infrastructure projects.
A number of its investments include long-term contracts with State and Commonwealth governments, including a 99-year concession on Darwin and Alice Springs airports.
Other assets include the Tasmanian gas pipeline – the sole gas connection between the state and the mainland.
The chairman of Palisade’s investor advisory group is former deputy prime minister and leader of the National Party, Mark Vaile.
Lloyd says Palisade is targeting strong growth in the coming years and has hired a number of new staff.
Recent hires include Dan Roberts from Macquarie Group and Jonathan Chau, a former member of Mallesons Stephen Jacques’ Sydney project finance and infrastructure team. Ashley Matus also joined the accounting side of the business in January, with Lloyd saying a new hire from investment banking is set to be announced in the coming weeks.