The chair of the Queensland Investment Corporation believes appetite for infrastructure investments is growing, with demand often outstripping supply around the world.
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Damien Frawley said QIC, which is responsible for more than $75 billion in investor funds, was interested in investigating Queensland infrastructure investment opportunities which may present if the government went down the path of asset sales.
Speaking to an industry lunch, Mr Frawley said infrastructure had developed into a “mainstream asset class” over the past decade, with “long-duration cash flows, yield, inflation hedging and predictability” making it an “excellent fit” with superannuation fund liabilities.
“Infrastructure assets are dependable, tangible and in many cases, provide extremely reliable, long-term returns through regulated pricing,” he said.
“It means that there’s an incredible global appetite for infrastructure.
“Far and away the biggest problem our infrastructure team, and in fact all global infrastructure investors, have, is finding assets to invest in.”
With the government considering offloading the Townsville, Gladstone and Bundaberg ports, the Mount Isa rail line, SunWater ‘s industrial assets, the retail arm of Ergon and power generation companies Stanwell and CS Energy, if given a mandate at the next election, Queensland’s assets and who may end up in control of them has begun dominating the agenda.
Mr Frawley said QIC, which has financial stakes in the Brisbane Airport Corporation and the Brisbane ports, as well as international infrastructure such Thames Water and New Zealand power utility Powerco, said the state’s potential asset sales could fit the investment bill superannuation funds, pension funds and fund managers were looking for.
“While some sectors of the public may have an emotional attachment to state-owned assets going under the hammer, claims that sales to private investors result in worse service aren’t necessarily borne out by the facts,” he said.
Mr Frawley said if “the settings were right”, asset sales could prove a “win-win” situation for both “government balance sheets ... and much needed infrastructure needs of the community”.
QIC is owned by the Queensland government.
