Disclosure
QIC Outsourced Equities After Failing to Differentiate Internal Performance
“We realized that we could do alternatives well and differentiate performance, but conversely in equities we didn't, and so, so we outsource equities.”
Insight
Private Toll Road Traffic Foreshadowed the GFC by Four Months
“We went back and looked at, you know, that profile of traffic, and it fell off About three to four months before the GFC, it actually fell off a cliff, and it's sort of one of those things that within our wider QIC business we're becoming more aware of is the …”
Insight
Public Utility Market Sentiment Guides Private Infrastructure Asset Sales
“It's interesting because I think the listed view is quite valuable in sentiment, and so often in talking with the CIO, my key question to him is, what's your sentiment right now? Because it gives some test of where exuberance is or isn't in some of the sectors…”
Insight
Infrastructure Underperformance Stems From Mismanaging Customers, Regulators, or Governments
“There are three stakeholders in infrastructure assets that keep emerging The first is obviously the customer of the asset. The second is regulators, and the third is government at a state, municipal, or federal level. You intersect with those stakeholders regu…”
Disclosure
QIC Evaluates Origination Teams on Pipeline Volume, Not Conversion Rates
“On the origination side, we're really driving how many things that we got in the pipeline. So it's not about conversion of X to Y. It's actually about getting to a certain level, a number of deals that we're putting into our pipeline and having that originatio…”
Insight
Boosting Short-Term Infrastructure Returns Jeopardizes Asset Quality and Alignment
“The perspective is it's a long duration asset, and so you can dial up in the short-term returns, but you will have a consequence with respect to underspend if you look at the quality of the service or the quality of the assets and their maintenance, and so the…”
Prediction Not checkable as stated
Distributed Energy and Battery Storage Will Trigger the Uberization of Electricity
“Distributed energy, this convergence of renewables and battery storage is going to be a really big change. We, if I can summarize the opportunity, we've seen Uber where there's been excess capacity in the car fleet. The one place in infrastructure where there'…”
Assertion Supported
Australia's Compulsory Superannuation System Is the World's Fourth Largest Savings Pool
“So that's created today the fourth largest savings pool in the world.”
Disclosure
QIC Allocates 5-10% to Infrastructure and 5-7% to Private Equity
“Today we're up around, to give you some idea, an allocation of between five and 10% of the total fund is in infrastructure, and similarly even probably higher weighted a little bit in terms of real estate And in PE, I think it's around the same five, five to s…”
Assertion Supported
QIC Doubled Queensland Motorways Value in Four Years to Fund State Pension
“It had two toll roads when we acquired it, And then we added three other toll roads that the city owned, and we built a network company. And then we sold it four years later for about a two times money multiplier, which was a great deal for the Defined Benefit…”
Disclosure
QIC Intends to Permanently Own Scarce Gateway Infrastructure Assets
“To be a permanent owner, and some of these assets are very scarce, they might not trade very often, and from that point of view, if you've got certain key assets, gateway airports, gateway ports, very strategic water assets, for instance, some of these things …”
Disclosure
Government-Owned QIC Incentivizes Teams With Carry Instead of Equity
“We can't offer stock because we're government owned. So the model we've gone down with is really around alignment with our underlying investors, and so it is through a carry structure that is aligned to the performance that we deliver to the client.”
Assertion Supported
Privatized Australian Airports Are Primarily Owned by Superannuation Funds
“The airport sector, by way of example, which was privatized in the late nineties, early 2000, has really been owned largely institutionally by superannuation funds.”
Assertion Supported
Large Pension Funds Are Internalizing Direct Infrastructure Investments for Yield
“Well, we've seen a, like a large number of very big pension funds go direct. There's an internalization that is occurring. They are attracted to the duration of the assets, the cash, yields that come off that, particularly in this point in the cycle where yiel…”
Assertion Supported
Core Infrastructure Equity IRRs Have Compressed From Mid-Teens to Single Digits
“Let's say when we started mid-teen returns, equity IRRs were sort of possible. That is well and truly drifted south in terms of the core assets. You know, some of the very core assets are single digit IRRs.”
Assertion Supported
Early Macquarie and Babcock & Brown Infrastructure Funds Unwound in Australia
“These funds all unwound in Australia, off the stable that was Macquarie, and then Babcock and Brown as well.”
Disclosure
Partner's Capital Constraints and Refusal to Dilute Stifled QIC's Port Deal
“That was, ah, so the lessons learnt, you know, we probably got the thesis right just before the GFC that, you know, there was going to be an opportunity, particularly in emerging markets, to add port concessions, and they did come up. Unfortunately, what happe…”
