AMP Capital to buy power stake from Brookfield

The Sydney-based fund manager has agreed to pay NZ$525m for 42% of New Zealand’s second-largest electricity and gas distribution company.

Australian fund manager AMP Capital will acquire a 42 percent stake in Powerco NZ Holdings (Powerco) from Toronto-based Brookfield Infrastructure for NZ$525 million (€315 million; $410 million). The deal represents an enterprise value of NZ$1 billion.

The investment will be made on behalf of a number of AMP Capital’s clients and managed funds including the AMP Capital Infrastructure Equity Fund (IEF) and AMP Capital Core Infrastructure Fund.

Powerco supplies electricity and gas to more than 426,000 consumers (323,093 electricity and 103,313 gas) on New Zealand’s North Island. The firm accounts for 16 percent of total electricity connections and 40 percent of total gas connections in the country and has a 37,058-kilometre network.

The deal was led by AMP Capital’s internal origination and asset management team, including IEF fund manager Michael Cummings, who was on the board of Powerco from 2008 to 2012.

AMP Capital global head of infrastructure Scott Davies pointed out in a statement that the acquisition offered clients “exposure to a geographically diversified quality asset in the core regulated utility sector”. He added that AMP Capital had been managing funds in New Zealand since the 1920s.

The deal is conditional upon approval from the New Zealand Overseas Investment Office and is expected to complete by the end of this year.

AMP Capital had more than A$130 billion under management at the end of March this year and has made over 80 infrastructure equity and debt investments globally since 1988.