UniSuper Fund Backs Sydney Water
Published on by Water Network Research, Official research team of The Water Network in Business
An industry superannuation fund is recommitting investment in one of Sydney's largest infrastructure assets.
UniSuper is extending its partnership in the Prospect Water Filtration Plant for a further 14 years, from 2021 to 2035.
The $54 billion fund first invested in the plant in 2001, acquiring a 49% equity interest alongside French waste management and water treatment company SUEZ (51%).
UniSuper head of property and private markets, Kent Robbins, said the fund embraced its opportunity to continue its long term commitment to a quality investment.
"The agreement provided UniSuper with an opportunity to extend the investment life and enhance its position in a quality asset. It also provided an opportunity to invest additional capital with attractive returns," Robbins said.
About one-sixth of UniSuper's investment portfolio is dedicated to major infrastructure assets including Sydney, Adelaide and Brisbane Airports, the Victorian Desalination Plant, and the Victorian Comprehensive Cancer Centre, as well as through companies including Transurban Group, APA Group and Axicom.
"UniSuper is attracted to the quality investment characteristics displayed by infrastructure. Large scale infrastructure assets have what we term 'fortress-like' characteristics, with their strong market positions supporting the generation of stable, long-term cash flows, making it a natural fit for superannuation funds with long-dated liabilities. The long term agreements also tend to provide inflation protection, offering investors predictable, stable, long-term returns," Robbins said.
Under the latest agreement the Prospect Water joint venture will continue to operate the plant 24-hours a day, seven days a week, filtering up to three billion litres of water per day.
Commissioned in 1996, the plant has the capacity to provide drinking water for up to 85% of Sydney's population. It was built under a 25-year build, own, operate and transfer agreement that was originally due to expire in 2021.
Source: Financial Standard
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