Industry observers often called them “satellites”: the myriad of listed and unlisted funds managed by Australian investment banks Babcock & Brown (Babcock) and Macquarie Group.
With Babcock now bankrupt and selling its assets, many of its satellites have taken the opportunity to spin out of its orbit. Among these: Babcock & Brown Wind Partners, Babcock & Brown Communities, Babcock & Brown Capital and Babcock & Brown Public Partnerships.
Last month, the latest spinout saw Babcock & Brown Infrastructure Fund North America re-emerge as SteelRiver Infrastructure Partners after an auction of Babcock’s 5 percent interest in the fund, together with its management rights. John Hancock Life Insurance Company, one of the fund’s largest limited partners, won the bidding to increase its interest (the size of which is undisclosed) and take a joint interest in the management company alongside the newly independent management team.
The transaction is likely to give the $1.9 billion fund – half of which has been invested – a shot in the arm. “The fund will continue to explore opportunities in the market and now, with the overhang of the Babcock & Brown name lifted, there may be more opportunities,” a source close to the situation said.
As with other Babcock spinouts, the existing management team will remain in place, with Chris Kinney as chief financial officer. Under Kinney’s watch, the fund has acquired interests in a mix of port, energy and transmission businesses. These include the Trans Bay Cable, a 53 mile-long high-voltage submarine cable linking San Francisco and Pittsburgh (California) and an 80 percent controlling interest in the Natural Gas Pipeline of America, one of the largest natural gas pipelines and storage systems in the US.
The source told Infrastructure Investor that the SteelRiver name is meant to “constitute a fusion of two aspects that are close to our business – the resilience of the asset class in which we work and the fluidity of the management of these assets”.
Other post-Babcock name changes include International Public Partnerships Limited (formerly Babcock & Brown Public Partnerships), Alternative Investment Trust (Everest Babcock & Brown Alternative Investment Trust) and Everest Financial Group Limited (formerly Everest Babcock & Brown Limited).
Shareholders in another recently separated Babcock satellite – Babcock & Brown Capital – have also voted to erase the Babcock brand after terminating their management agreement with the firm in late April for A$5 million (€2.7 million; $3.6 million). The firm will soon be known as Eircom Holdings Limited – a reflection of its main asset, Irish telecommunications company Eircom.