Partner's Capital Constraints and Refusal to Dilute Stifled QIC's Port Deal
Ross Israel · Ross Israel - Stable, Predictable Cash Flows (EP.53) · May 21, 2018 · at 19:47
Ross Israel, Head of Global Infrastructure at QIC, recounts QIC's most challenging deal involving a Spanish ports concessionaire before the Global Financial Crisis.
0:00 / 0:27exact quote · 28.0s
720p mp4 · rendered on demand · StarZero watermark
“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 happened was the family didn't have the capital To ride that opportunity set with us, and basically they didn't want to get diluted. So we got squeezed in not really growing the base of the business in the way we wanted to.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Ross Israel
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.”
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 …”
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…”
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…”
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…”
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…”