Spark Infrastructure is a specialist fund. Its objective is to invest in regulated utility infrastructure, both within Australia and overseas.

 

Spark Infrastructure is a specialist infrastructure fund. Its objective is to invest in regulated utility infrastructure, both within Australia and overseas. This includes electricity and gas distribution and transmission and regulated water and sewerage assets which offer relatively low risk and stable cash flows, facilitate the payment of relatively predictable distributions to investors and offer the potential for long term capital growth.

The initial public offering completed in December 2005 enabled the Fund to acquire a 49% interest in each of the following businesses:

ETSA Utilities (ETSA) is South Australia's only significant electricity distributor, delivering electricity to approximately 793,000 customers over an area of approximately 178,200 square kilometres. ETSA is one of the largest infrastructure businesses in South Australia.

Powercor is the owner and manager of the largest electricity distribution network in Victoria, delivering electricity to approximately 673,000 customers across 65% of the State.

CitiPower is the owner and manager of the electricity distribution network servicing Melbourne's central business district (CBD) and inner suburbs, delivering electricity to approximately 299,000 customers.

The other 51% interest in each of CitiPower, Powercor and ETSA is held by Cheung Kong Infrastructure (CKI) and Hong Kong Electric (HKE). CKI also has a direct interest in the Fund.

 

To build the pre-eminent Australian listed infrastructure investment fund, by:

• achieving long term, attractive and stable returns and capital growth for investors in line with our risk profile and market expectations
• establishing a diversified global portfolio of quality regulated infrastructure assets;
• leveraging key strategic partnerships

 

The performance of the Fund is underpinned by high quality seed assets and management.

Future growth is likely to come from organic growth in our existing portfolio and from co-investment opportunities with our sponsors/partners CKI, RREEF and other third parties.

Spark Infrastructure already possesses a quality portfolio of assets which consists of a 49% interest in three electricity distribution businesses. These businesses rank among the most reliable and efficient of their kind in Australia. They produce predictable and growing cashflows from their current operations and possess strong organic growth opportunities. Investing in the existing portfolio of assets offers a secure path towards profitable growth and will continue to be a key priority for Spark Infrastructure.

Spark Infrastructure will also target acquisition opportunities in the utility infrastructure sector both in Australia and internationally, focussing on regulated utility infrastructure assets in electricity and gas distribution and transmission, and regulated water and sewer assets. Spark Infrastructure will seek a portfolio of international utility infrastructure assets, with the objective of diversifying the future asset portfolio by asset class, region and regulatory regime.

Spark Infrastructure will aim to establish itself as an Australian market leader in managing, enhancing and growing a significant portfolio of quality infrastructure assets, for the benefit of its investors.

 

Spark Infrastructure seeks to invest in OECD countries and countries which have comparable sovereign credit ratings or level of economic development.

Spark Infrastructure seeks to provide an attractive cash yield and long term capital growth for investors. The key objectives are to:

• maintain and optimise the performance of the portfolio of assets according to agreed criteria over time;
• grow the fund portfolio of businesses in line with a well-defined strategy;
• maintain the market positioning of Spark Infrastructure; and
• maintain best practice compliance and governance standards.

The fund will adopt the following investment criteria whether investing directly or co-investing:

Investment opportunities must be yield and value accretive with respect to the funds invested for acquisitions. While there is a strong preference for all acquisitions to be yield and value accretive immediately, opportunities that are of a strategic nature and that will be yield and value accretive in the medium term may be considered;

The investment opportunity must have a risk/return profile complementary to the existing investment portfolio;

When considering potential acquisitions, Spark Infrastructure will seek an interest or shareholding which enables it to have influence over key strategic, operating and commercial decisions affecting its investments;

• the investment opportunity must have predictable and stable long term cash flows and have revenue growth potential;
• the investment opportunity must operate in a transparent regulatory regime and have relatively high barriers to entry; and
• there must be capable operational management in place or available to manage the business in accordance with agreed business plans.

Specialist Infrastructure Group

About Spark Infrastructure

Underlying Income 20.6% above 2006