The Utilities Trust of Australia (UTA) – a private infrastructure fund managed by Australian fund manager Hastings Funds Management – achieved a net return of 11.49 percent for the financial year ending in June, well above its benchmark of 7.26 percent, according to a statement from the firm.
The return is also one of the highest UTA has posted to date, above the fund’s five-year average of 9.89 percent and annual return rate of 11.16 percent since the fund’s 1994 inception. The total return included both improved valuations and cash flow from the fund’s assets, and reflects the successful re-balancing of UTA’s portfolio, according to a Hastings spokesman.
As of this year, about 50 percent of UTA’s portfolio consists of airport investments, while the other 50 percent is in regulated assets, such as energy. UTA’s investments in the airport sector, which include Perth and Melbourne airports, generated the highest return for the fund, amounting to 22.76 percent in total last year, the statement added. Given the re-balancing, the spokesman said that similar net returns should be repeatable for UTA in the future.
In the statement, UTA’s chief executive Colin Atkin said that the fund remains in a “strong capital position, allowing the fund to pursue new investment opportunities consistent with its portfolio strategy”. Atkin also recently told Infrastructure Investor that UTA is now 80 percent-invested, and hopes to go fundraising again early in 2014. Current investors in the fund are primarily comprised of Australian pension funds and superannuation funds.
Australia’s recently published National Infrastructure Plan has estimated that Australian infrastructure projects will require a total of A$80 billion (€56 billion; $74 billion) in investments over the next year, and encouraged private sector involvement. “UTA anticipates that it will be a key participant in these opportunities [in Australia] as and when they arise,” Atkin added in the statement.
However, UTA’s current pipeline also suggests that the fund will grow its overseas allocation from the current 30 percent level, Atkin told Infrastructure Investor previously. The pipeline Hastings' UTA team has developed is “pointing more towards Europe in the short term, as there is more activity in those markets,” he said.