Exclusive: GIP hires ex-Port of Brisbane head, eyes new fund

Russell Smith is joining the firm alongside Rob Stewart, former boss of Credit Suisse Australia, as the firm prepares to launch an Aussie-dollar vehicle.

Global Infrastructure Partners (GIP), the New York-headquartered fund manager, has added two heavyweights to its Australian team shortly before the expected kick-off of multi-billion dollar privatisation programmes in the country.

People with knowledge of the situation told Infrastructure Investor that Russell Smith, former head of Port of Brisbane, is joining the firm along with Rob Stewart, who stepped down as chief executive of Credit Suisse Australia last week and is to run GIP’s Sydney office from the start of June. Both will work alongside Ari Droga, head of GIP in Australasia since 2008.

It is also understood that GIP has started soft marketing an Australian-dollar-denominated vehicle to more closely focus on what it sees as an important and growing market. The firm was so far targeting Australian assets through Infrastructure Partners II, a vehicle it closed on $8.25 billion in October 2012.

A spokesperson for GIP declined to comment.

The $21.6 billion fund manager is no stranger to the Australian market, having acquired a 26.7 percent stake in Port of Brisbane through a consortium in November 2010. The firm sold its entire interest in the asset to Canadian pension La Caisse de dépôt et placement du Québec in November 2013, a transaction that valued the port at about A$6.2 billion.

GIP’s latest moves confirm the growing interest of overseas fund managers for Australian assets, some of which are expected to be sold by the country’s most populous states through high-profile auctions in the coming months.

The re-election of the Liberal-National coalition in New South Wales last month opened the way for the sale of its poles and wires businesses, through which it hopes to raise as much as A$13 billion (€9.4 billion; $10.1 billion), to proceed. This lifted investors’ spirits two months after Queensland’s Labor government, voted in at the end of January, opposed the state’s previously announced A$37 billion privatisation programme.

Other potential prizes lined up for sale include Port of Melbourne and Port of Gladstone as well as a number of non-core assets, such as pipeline and storage businesses, that industry insiders expect corporate players to divest.