Babcock & Brown Public Partnerships internalises management(3)

The social infrastructure investor has become the latest Babcock & Brown-managed fund to sever ties with the defunct Australian asset manager. It will also change its name to ‘International Public Partnerships Limited’, pending shareholder approval.

London Stock Exchange-listed social infrastructure fund Babcock & Brown Public Partnerships (BBPP) has reached an agreement to internalise its management agreement.

BBPP created a new management company, Amber Infrastructure Group Limited, which will acquire its management agreement and advisory rights. Both were previously held by troubled Australian asset manager Babcock & Brown.

BBPP will also change its name to “International Public Partnerships Limited” in a further effort to distance itself from Babcock, which entered administration earlier this month after a group of subordinated noteholders in New Zealand voted against a restructuring proposal.

Both measures require BBPP shareholder approval. Once approved and carried out, they will sever all remaining ties with Babcock, the firm said in a statement.

Babcock typically had three ties with its listed entities: an equity stake of 8 to 10 percent in their shares, long-term external management and advisory agreements, and some level of debt between the two.

As it has struggled over the past six months to eke out a future with a banking syndicate to which it collectively owed A$3.2 billion (€1.6 billion; $2.1 billion), several of the listed funds it managed took steps to sever those ties. These include: Babcock & Brown Wind Partners, Babcock & Brown Communities, Babcock & Brown Capital and Babcock & Brown Infrastructure.

BBPP cleared profit of £10.5 million (€11.3 million; $15 million) on revenues of £224.9 million in 2008, versus profit of £6.9 million on revenues of £131.2 million in 2007.