Brookfield Infrastructure Partners, the New York Stock Exchange-listed infrastructure fund managed by Toronto-based Brookfield Asset Management, is looking to go shopping in Latin America.
Brookfield Infrastructure Partners (BIP) chief executive officer Sam Pollock said on a conference call with investors this morning that, while the company is focusing on organic growth initiatives in its Australian and European assets, the Latin American market presents an opportunity to buy
We are actually working on a number of new investment initiatives, particularly in Latin America
“We are actually working on a number of new investment initiatives, particularly in Latin America,” Pollock said, specifying Brazil, Chile, Colombia and Peru as countries where the firm might invest.
He added that BIP is seeing “attractive opportunities to partner with or to buy assets from” large corporations that own a lot of infrastructure in the region.
Asked to name specific opportunities, BIP chief financial officer John Stinebaugh said the firm is looking to invest in port assets, toll roads and pipelines in Latin America. He said the firm is “less focused” on the electric transmission sector in Latin America, even though BIP already owns one such asset: an 18 percent interest in Chilean electric transmission grid Transelec.
Overall, Brookfield’s Latin American and Australasian assets contribute 50 percent of its cashflow, Stinebugh said. He added that the assets are well placed to benefit from an economic recovery.
The firm’s Australasian assets include Powerco, a New Zealand electricity and gas distributor; WestNet Rail, a 5,000 kilometer rail network in Western Australia; and Tas Gas Networks, a gas business in Tasmania, Australia, among others.
BIP acquired interests in these assets from Babcock & Brown when it invested in its Australia-listed infrastructure fund, Babcock & Brown Infrastructure. That deal, completed in November 2009, gave the firm an additional $8 billion in infrastructure assets under management.
The additional earning power from the assets showed in the firm’s second-quarter results. Adjusted for a one-time gain in the second quarter last year, the firm posted more than a six-fold increase in second-quarter cashflows: $52 million versus $8 million a year earlier.
The firm reports cashflows as “funds from operations,” or FFO, which Stinebaugh said is a close substitute for cashflows from its operations.
As of press time, BIP’s New York Stock Exchange-traded shares stood at $17.69, up .86 percent on the day’s trading.