Aus & NZ: Funds circle marquee Hastings portfolio

30 November 2017 - 12:00 am UTC

Infrastructure funds are lining up to bid for the right to manage the AUD 6bn (USD 4bn) Utilities Trust of Australia, which is understood to be ousting Hastings Funds Management as its manager.

Numerous fund and other industry sources close to Hastings and its new owner, Northill Capital, confirmed reports UTA is putting out a tender for a new manager.

Several large and mid-sized infrastructure funds that did not wish to be named said they would be bidding for the mandate. 

UTA’s assets include Melbourne Airport, TransGrid in NSW, the NSW Land and Property Information service, the Port of Portland in Victoria, the M5 motorway in Sydney, South East Water in the UK, Southwest Generation in the US and Sydney Desalination Plant.

Hastings and super funds with investments in UTA have yet to return requests to confirm the plan.

The move is yet another blow for Hastings staff after a turbulent 18 months, with two failed attempts by its owner, Westpac Bank, to sell the fund manager. Numerous staff have left Hastings in the past year and more are expected to follow.

Northill Capital sign a deal on 3 November to acquire Hastings for between AUD 150-160m (USD 113m-131m).

It is understood the acquisition will still go ahead as UTA’s move was mooted at the time and taken into account in the agreement with Westpac. After rejecting several other suitors, including property groups Charter Hall and Lendlease, some UTA investors were understood to still be unhappy with Northill, which has no experience in infrastructure investment.

The exit of UTA would halve Hastings’ present AUD 12.6bn in funds under management and leave it with very little to manage in Australia.

Hastings also lost the AUD 2.1bn The Infrastructure Fund when TIF’s board voted in August to either seek a new manager or internalise management.

It is uncertain whether Northill will now pay less for Hastings, but sources said it was primarily buying a brand and investment capability and would still have an infrastructure equity management business in Australia and debt investment business in Europe and the US.