Palisade in Aussie defence PPP deal

The fund manager, through its Australia Social Infrastructure Fund, has bought a 49.9 percent stake in the A$800m LEAP 2 project from Plenary Group. Palisade is now a co-investor in the project, as well as predecessor LEAP 1, alongside Plenary and the Caisse de depot et placement du Quebec.

Palisade Investment Partners, an Australian fund manager, has acquired a 49.9 percent stake in an Australian defence accommodation public-private partnership (PPP) for an undisclosed amount, Palisade announced in a statement.

The deal will see Palisade’s Australia Social Infrastructure Fund (PASIF) become a major shareholder in the Living Environment Accommodation Project Stage 2 (LEAP 2) PPP. The stake was acquired from Australian developer Plenary Group and will see ASIF become a co-investor in the asset alongside Plenary and Canadian pension Caisse de depot et placement du Quebec (the Caisse).

Both Palisade, which represents several Australian superannuation funds, and the Caisse have agreements in place with Plenary allowing them to buy into PPPs originated by Plenary in Australia. 

The LEAP 2 project comprises construction of more than 3,000 accommodation units across 14 Australian defence bases. The 30-year PPP has a capital cost of over A$800 million (€677 million; $841 million) and a Consumer Price Index (CPI)-linked revenue stream.

“Australia has a large pool of primary and secondary infrastructure assets in which offshore investors are currently taking significant ownership interests. PASIF’s acquisitions represent an opportunity for local superannuation funds to invest in Australia infrastructure,” Vicki Rigg, PASIF portfolio manager, said in a statement.

PASIF also owns 49.9 percent of LEAP 1, alongside Plenary and the Caisse. The fund’s portfolio of social infrastructure PPPs now spans every Australian state and territory with the exception of Tasmania. Palisade says PASIF’s portfolio contains a mixture of greenfield and operational projects, all with “strong CPI-linked government-backed revenue streams from long-term concessions”.

PASIF is Palisade’s third infrastructure fund, following its Diversified Infrastructure Fund and Regional Infrastructure Fund. In all, Palisade manages more than A$700 million through its funds and what it calls “discreet investment management agreements”.