Macquarie infra fund completes spin-out

Macquarie executive Stephen Mentzines resigned from the board of the Macquarie Power and Infrastructure Corporation, now called Capstone Infrastructure, and another Macquarie director has replaced him. Macquarie will receive C$14m from Capstone and will use about half of the proceeds to acquire Capstone shares.

Toronto-listed Macquarie Power and Infrastructure Corporation (MPIC) has completed its split from Macquarie Group, taking its management team in-house and changing its name to Capstone Infrastructure.

In a March presentation about the spinout, MPIC said it would benefit from splitting with Macquarie because it would have fewer management fees, a simpler structure, and more room to pursue acquisitions.

A Capstone spokesperson said the spinout would not affect any of the portfolio companies or the company’s dividend policy. The spokesperson said all 20 Macquarie employees have transferred to Capstone. The company also has 60 employees across its portfolio businesses.

MPIC, formerly Macquarie Power and Infrastructure Income Fund, switched from a fund structure to a corporation on 1 January, according to documents filed on the Toronto Stock Exchange.

MPIC’s portfolio includes wind, hydroelectric, biomass, gas cogeneration and solar power plants in Canada. In March, MPIC agreed to acquire a 33.3 percent stake in a heating business in central Sweden from Finland-based Fortum Corporation for C$109 million (€78.4 million; $114.1 million). The Macquarie European Infrastructure Fund II acquired the remaining 66.6 percent of the business.
 
MPIC is not the only Macquarie-managed entity to separate from its parent. In 2009, both the Macquarie Communications Infrastructure Group and the Sydney-listed Macquarie Airports fund cut their ties with Macquarie. The following year, a portion of the Macquarie Infrastructure Group also split off from its parent company, becoming Sydney-listed toll road operator Intoll.

Macquarie will receive a C$14 million “consideration payment” from Capstone and use about C$7 million to acquire Capstone shares, according to the March MPIC presentation. Macquarie has agreed to hold onto its Capstone shares for at least a year.

Capstone said Macquarie senior managing director Stephen Mentzines resigned from the board of directors as part of the spinout.

Macquarie will continue to be represented on the board for at least a year. Earlier this month, Capstone said it had replaced Mentzines with another Macquarie executive, James Cowan, who serves as a managing director for Canadian operations at Macquarie Infrastructure and Real Assets, which manages the firm’s infrastructure funds.

Capstone Infrastructure was last trading at C$8.22, up .75 percent on the day’s trading.