Babcock & Brown Wind Partners has reached an agreement with its manager, Babcock & Brown, to terminate their management agreements and exclusive financial advisory agreement for a cash payment of A$40 million (€20 million; $28 million).
The termination fee is the largest yet paid to Babcock by any of its satellite funds that have reached similar accords.
On 10 November, Babcock & Brown Capital announced plans to bring management in-house in exchange for A$32.5 million. Earlier, Babcock & Brown Communities also announced plans to buy back its management agreement for A$17.5 million in connection with listed property developer Lend Lease’s proportional takeover of the firm.
The fee will be comprised of an upfront payment of $35 million and a deferred payment of A$5 million payable on 30 June 2009.
The management internalisation is targeted to be completed by 1 January 2009, at which point existing Babcock & Brown Wind professionals currently employed by Babcock will become direct employees of Babcock & Brown Wind.
The agreement, reached in principle and subject to documentation, follows a management agreement termination proposal submitted by Babcock & Brown Wind to Babcock last month.
Babcock & Brown Wind also confirmed the appointment of Miles George as its managing director.