Future Fund lands at MAp Airports for A$188m

Australia’s Future Fund, the government’s investment fund, has bought a 5.05 percent stake in MAp Airports (MAp), the majority owner of Sydney Airport.

The stake cost the Future Fund around A$188 million (€145 million; $207 million), according to a statement released by MAp to the Australian Stock Exchange.

Business Spectator, an Australian newspaper, says “there is talk that the operator of Sydney Airport may become a takeover target, with speculation that the Future Fund and the Abu Dhabi Investment Authority (ADIA) could join forces to make a joint acquisition”. The newspaper also says that ADIA owns a 5 percent stake in MAp.

MAp hit the headlines recently thanks to an asset swap agreement signed with the Ontario Teachers’ Pension Plan Board (OTPP), a Canadian pension fund. The deal called for OTPP to exchange its 11 percent stake in Sydney Airport for MAp’s 39 percent holding in Brussels Airport and its 30 percent interest in Copenhagen Airport, plus a cash payment of A$791 million.

Kerrie Mather, MAp’s chief executive, labelled the asset swap a “transformational transaction” for the airports operator, giving it an 85 percent stake in Sydney Airport, which is now its only asset and “sole focus”, Mather added.

The close to A$75 billion Future Fund was started by the Australian government in 2006 to assist the government in paying its future public sector superannuation liabilities. The fund receives its money from budget surpluses. 

In its latest annual report, the Future Fund said it had allocated A$2.6 billion to infrastructure and timberland, or 4.5 percent of its total size. Most of the fund’s infrastructure investments are in Australia (39 percent), followed by the UK (34 percent), Europe (15 percent) and North America (12 percent). 

The fund privileges economic infrastructure (39 percent) – followed closely by regulated infrastructure (44 percent) – and has a small commitment (7 percent) to contracted infrastructure.