The Pipeline: UK windfall tax, GIP hits back at FIRB, QIC in ex-Hastings hire, F2i lands Olbia Airport

UK windfall tax beckons, GIP hits out at Aussie rules and 2020 gets an airport acquisition. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Invested in UK utilities? Brace for potential windfall tax
Last week, we welcomed renewed interest in regulated assets. This week, we bring news on how the UK might be about to squander that goodwill.

The Pipeline understands the UK’s cross-party Treasury Select Committee is consulting on whether to recommend a windfall tax on utilities ahead of the budget in March. Our source tells us this consultation should be finished in December.

This would not be the first time such a tax has been enacted – former prime minister Tony Blair takes the crown there with his 1997 clawback on “the excess profits of the privatised utilities”. Still, it would be an incredible move from a Conservative government – although, as our source dryly notes, not as ‘unconservative’ as some of its coronavirus response packages.

All these jolly tidings come against a backdrop of open warfare between water regulator Ofwat and the Competition and Markets Authority. The former recently accused the CMA of “substantive and procedural” errors in its September ruling in favour of four water companies that had been appealing against Ofwat’s latest price controls. That’s strong language for mild-mannered civil servants.

Stronger language was deployed by Yorkshire Water, which hit out at Ofwat in its post-CMA hearing notes, accusing the watchdog of an “offensive suggestion” that its foreign ownership would be viewed unfavourably by customers.

Have you caught wind of the windfall tax? If so, get in touch, as we track the latest developments.

Who runs the world? FIRB
Yorkshire Water may have been offended, but surely investors are used to this kind of thing in Australia, where foreign players, thanks to the blocking of several high-profile infrastructure deals in recent years, are often under the microscope.

However, Foreign Investment Review Board chair David Irvine last week told an M&A conference organised by law firms Allens, Herbert Smith Freehills and King & Wood Mallesons that new rule changes to tighten restrictions further were nothing to worry about.

“In theory, I cannot see these having an impact on the overall attractiveness of Australia as a destination for foreign investment,” he said, as reported by the Australian Financial Review (paywall).

However, Nick Hume, principal at Global Infrastructure Partners in Sydney, pushed back, arguing that a “vagueness” in the draft legislation could lead to vendors taking the “lower, simpler, easier, Australian-only offer” in competitive bid processes.

The Pipeline understands a ‘Team Australia’ element is considered sensible by bidders, a point of view shared by Macquarie Capital’s David Mustow on the panel.

Are the shackles about to be made tighter Down Under?

II50: Meet the industry’s top GPs
November has rolled around and that means it’s time to unveil our annual ranking of the industry’s top fund managers. Unlike most rankings, the Infrastructure Investor 50 is not a simple AUM ranking. Rather, it tracks the fundraising prowess of the industry’s elite GPs over a five-year period. That means no coasting on past glories if you want to ensure a place at the top table.

In this edition, the world’s top infrastructure GPs grew their assets raised between 1 January 2015 and 31 August 2020 by a very respectable $78 billion, to a total of around $574 billion.

Find out which firms made the cut HERE.


Send us your awards submissions!
It’s global awards time! Infrastructure Investor’s annual awards remain the only honours in the industry decided solely by the industry. Submissions have already started coming in. Don’t miss your chance to share your firm’s achievements – there are 64 categories to choose from – and help us compile our shortlists.

So if you haven’t already, click HERE to submit your firm’s achievements in 2020 so far – the deadline is Friday 13 November.


“Looking at our pitch book and hearing our strategy over a Zoom call is great. But until they sit across from us and have a beer or a sandwich, it’s tough to build a level of comfort”

Ken Bryant, a co-founder of Sidereal Capital Group, expresses scepticism that desktop diligence can ever replace the people skills GP-LP relationships require

Who’s hiring

QIC appoints ex-Hastings chief
Australian fund manager QIC has appointed Peter Siapikoudis as portfolio manager for its core infrastructure fund, the QIC Infrastructure Portfolio.

Siapikoudis will be based in Melbourne and will lead portfolio analytics and research. He joins the firm from Atticus Capital, an asset consultant where he was managing director and principal.

Siapikoudis was previously CEO and portfolio manager of The Infrastructure Fund at now-defunct Hastings Funds Management. Prior to that, he held senior roles at Campbell Lutyens and Frontier Advisors.

QIC’s core strategy is a mature one, investing in diversified Australian assets including airports, ports and energy. This complements its more recent A$2.35 billion ($1.7 billion; €1.4 billion) Global Infrastructure Fund, which closed in 2017. This vehicle has invested in assets including the Port of MelbourneBrussels Airport and the parking system at Northeastern University in the US.

Jumping seas at DIF
Remaining in Australia, it’s all change at DIF Capital Partners after the €3 billion close of its sixth flagship fund last week.

Paul Hubener, previously DIF’s head of Americas and based in Toronto, has exited his role after nine years, and has been replaced by the firm’s head of Australasia Marko Kremer, who has been with DIF since 2008. Kremer’s role in Sydney will be taken up by Martin Hanke, a senior director in the Sydney office since 2015.

DIF did not comment on Hubener’s departure, although it is believed to be linked to a company policy ensuring partners step down when reaching a certain age to allow new talent to come through. Hubener is set to continue with DIF in an advisory role.


F2i lands Sardinia’s Olbia Airport
Ah, Sardinia! If you’ve ever spent time on this beautiful Italian island, you would not begrudge anyone wanting to go back to it. With that in mind, we applaud F2i’s acquisition of a controlling stake in Olbia Costa Smeralda Airport. As the island’s second-largest hub, it joins the Italian GP’s portfolio alongside its controlling stake in Sardinia’s Alghero Airport.

We also applaud F2i’s courage. After all, though Olbia Airport moved three million passengers in 2019, it has been as hard hit as any other global hub this year. Nevertheless, as CEO Renato Ravanelli reasoned: “Sardinia has all the characteristics to benefit from a faster recovery, thanks in particular to its position as an exclusive tourist destination.”

That belief is backed by a commitment to invest more than €120 million to expand runway and terminal capacity. This is no doubt helped by the airport’s status as one of Europe’s leading hubs for ‘general aviation’ – aka, private jets.

F2i will want those high-net-worth tourists back as soon as possible.

Today’s letter was prepared by Zak BentleyBruno AlvesKalliope GourntisJordan Stutts and Daniel Kemp also contributed.

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