New Zealand-headquartered fund manager Morrison & Co is shifting its offshore expansion into Europe aided by its recent takeover of the management of Utilties Trust of Australia’s (UTA) AUD 6bn (USD 4.3bn) portfolio.
Chief Investment Officer, Paul Newfield, said its UTA mandate has helped it with leads in Europe as the firm has grown its presence there to manage the trust’s existing UK assets – the Porterbrook train rolling stock business, Phoenix Natural Gas in Northern Ireland and South East Water in England.
“We see a lot of opportunity in both North America and Europe in the renewable energy space, spanning development, operational portfolios and work out asset management,” he told Inframation.
“We have built our presence there with our UTA assets and a growing team in London.” Morrison & Co officially took over as UTA manager from Hastings Funds Management on 1 July.
Newfield said, Europe is a mature renewable energy market, but his investment analysts are finding opportunities that suit its “more flexible capital and active asset management approach as the market becomes increasingly complex and less reliant on long-term, government subsidised contracts”.
As in Australia, subsidies for green power are now being withdrawn.
Although it has made a foray into land registries, UTA is largely made up of core infrastructure assets.
Morrison & Co itself is closer to a private equity fund than a traditional infrastructure GP, focusing on “growth assets” that it could apply in its operational expertise to develop assets and businesses to achieve target returns of around 11% to 15%.
While in Australia in August, Edward Northam, the head of investment for Europe for Macquarie’s Green Infrastructure Group GIG, echoed those views.
“In Europe, it is transitioning from what is a subsidy-based model to auctions, which favour the lowest cost technology and projects and then ultimately it is going to move into an unsubsidised model,” he said at the time.
In the US, Newfield said Morrison’s Longroad Energy is similarly finding opportunities to take assets, including “distributed energy portfolios” held by purely financial owners and improve their performance by applying its operational expertise.