Lonsdale Consortium comprising Future Fund, QIC, GIP and OMERS acquire 50-year lease of Port of Melbourne

News provided by

Sep 19, 2016, 10:04 ET

MELBOURNE, Australia, Sept. 19, 2016 /PRNewswire/ -- The Lonsdale Consortium comprising the Future Fund, QIC, Global Infrastructure Partners (GIP) and OMERS was today named by the Victorian Government as the successful acquirer of a 50-year lease of the Port of Melbourne, Australia's leading trade gateway.

The Consortium said it was extremely pleased to be selected to acquire the lease and become custodians of Australia's largest container, automotive and general cargo port.

The Port of Melbourne is a strategic link between Australia and its major trading partners and the Lonsdale Consortium looks forward to working with government and industry to deliver world class facilities and ongoing growth to support future freight demand over the next 50 years.

The Consortium will bring significant operational expertise to the Port of Melbourne. To deliver this it has submitted a long-term development plan which is underpinned by a strong commitment to safety, governance, productivity and sustainability.

Peter Costello, Chair of the Future Fund Board of Guardians, said: "The Port of Melbourne is a high quality asset and an important link between Australia and its trading partners. We're delighted to invest in it and to add it to our portfolio of Australian and global infrastructure assets. It will be an important contributor to our long-term investment objectives as Australia's sovereign wealth fund."

QIC Global Infrastructure Head Ross Israel said: "The Port of Melbourne is core infrastructure – it is a critical and strategic piece of the Victorian and Australian logistics supply chain. Our Consortium has developed a long-term vision and business plan. Leveraging our global port and regulated asset experience, QIC is focused on delivering long-term stewardship and improvements to the port and for its users.

We look forward to working with the Victorian Government, port stakeholders and neighboring communities to maintain, invest and grow Port of Melbourne into the future. We believe this investment brings significant diversification benefits for our clients as a landlord port with a well- defined regulatory regime in a globally scarce infrastructure subsector," Mr. Israel said.

GIP Australia Partner Russell Smith said: "As a leading global, independent infrastructure investor, we are looking forward to supporting the future growth of the Port of Melbourne by applying industry best practice and utilizing our specialist knowledge.

"GIP looks forward to bringing to bear our strong port and rail industry expertise to drive forward the efficiency and capacity of the Port of Melbourne and focus on the necessary transformational change in the road/rail mix servicing the freight task moving through the port to the benefit of all stakeholders."

Ralph Berg, Executive Vice President & Global Head of Infrastructure, OMERS Private Markets, said: "We are confident that our global expertise in managing similar assets will see the Port of Melbourne continue to operate as Australia's leading container and multi cargo port and we look forward to working with port users and stakeholders to further improve the productivity of this important asset."

As part of its successful bid, the Lonsdale Consortium will invest substantial capital to expand the existing capacity of the port to service the freight needs of the State for 50 years. The Consortium is also committed to fostering close ties with industry and the local community.

Members of the Lonsdale Consortium hold significant infrastructure interests across Australia, including stakes in landmark Victorian assets such as Melbourne Airport, Iona Gas Storage Facility and EastLink toll road. The Consortium also brings extensive global and local port ownership experience with involvement in key assets such as Port of Brisbane, NSW Ports and Associated British Ports (the UK's largest port operator).

The Lonsdale Consortium was advised by Gresham Partners and Credit Suisse as its financial advisers and Herbert Smith Freehills as its legal adviser. The transaction is expected to close on October 31.

EDITORS NOTES

Consortium members

About the Future Fund:

The Future Fund is Australia's Sovereign Wealth Fund. The Future Fund was established by the Future Fund Act 2006. The object of the fund is to strengthen the Australian Government's long term financial position by making provision for unfunded Commonwealth superannuation liabilities. These liabilities will become payable at a time when an ageing population is likely to place significant pressure on the Australian Government's finances.
The Future Fund has received contributions from a combination of budget surpluses, proceeds from the sale of the government's holding of Telstra and the transfer of remaining Telstra shares.
The Future Fund Board of Guardians, supported by the Future Fund Management Agency, is responsible for deciding how to invest the assets of the fund.
As at 30 June 2016 the value of the Future Fund was A$122.79bn.
The Future Fund's interest in Port of Melbourne will be managed by QIC.
For more information, please visit: www.futurefund.gov.au.

About QIC:

QIC is a global diversified alternatives investment firm offering infrastructure, real estate, private equity, liquid strategies and multi-asset investments.
It is one of the largest institutional investment managers in Australia. As at 30 June 2016 it had over A$75 billion in funds under management, offering infrastructure, real estate, private equity, liquid strategies and multi-asset investment services.
QIC currently provides investment management services to 95 institutional clients in Australia and internationally, including governments, pension plans, sovereign wealth funds and insurers, spanning Australia, Europe, Asia, Middle East and the US.
Headquartered in Brisbane, Australia, QIC also has offices in with offices in Brisbane, Melbourne, Sydney, London, New York, San Francisco, Los Angeles and Copenhagen.
As at 30 June 2016 QIC managed over A$7.0 billion of infrastructure assets across 10 global direct investments, spanning transport, utilities and public-private partnership.
In addition to managing Future Fund's interest in Port of Melbourne, QIC will also be managing an interest on behalf of Golden Reef Infrastructure Trust, a partnership with a leading US public pension fund, and investing on behalf of the QIC Global Infrastructure Fund.
For more information, please visit: www.qic.com.

About GIP

Global Infrastructure Partners (GIP) is a leading global infrastructure investment manager that invests in infrastructure assets and businesses in both OECD and select emerging market countries.
GIP focuses its proprietary and specialist resources within its three industry sectors – energy, transport and water/waste and has strong port and rail sector credentials.
GIP has offices in New York, London and Sydney and portfolio company operations headquarters in Stamford, Connecticut.
GIP manages approximately US$35 billion for its investors. Additionally, the companies in GIP's portfolio have combined annual revenues greater than US$5 billion and employ approximately 21,000 people.
In Australia, GIP was a major shareholder in Port of Brisbane when it was privatised in 2010, manages a stake of NSW Ports for QSuper and recently was a key member of the consortium that completed the A$12 billion Asciano take-over transaction, with GIP taking a 27% shareholding in the Pacific National rail business stemming from that transaction.
For more information, please visit: www.global-infra.com.

About OMERS Private Markets

OMERS Private Markets (Borealis Infrastructure and OMERS Private Equity) invests globally in infrastructure and private equity assets on behalf of the OMERS pension plan.
Borealis Infrastructure is a Canadian-domiciled entity formed in 1998 to originate, structure, finance and manage infrastructure assets on behalf of OMERS.
As a direct equity investor it expects to exercise active management in each of its investments, with a preference for large, mature operating assets in sectors including ports and other transport infrastructure, as well as electricity, water and gas transmission and distribution.
Borealis Infrastructure currently manages approximately C$16 billion of net assets for OMERS which is invested in a diversified portfolio of over 20 infrastructure assets.
Although Borealis Infrastructure's current investment portfolio is focused on Canada, the United States and Europe, it has a clear mandate to focus on Australia and established an Australian office in Sydney in January 2014.
Founded in 1962, OMERS is one of Canada's largest defined benefit pension plans, with more than C$77 billion in net assets as at December 31, 2015. It invests and administers pensions for 461,000 members from municipalities, school boards, emergency services and local agencies across Ontario. OMERS has employees in Toronto and other major cities across North America, the U.K., Europe and Australia -- originating and managing a diversified portfolio of investments in public markets, private equity, infrastructure and real estate.
For more information, please visit: http://www.borealis.ca/.

Port of Melbourne key facts

The Port of Melbourne is Australia's largest container and multi cargo port, visited by more than 3,000 ships each year.

Trade

Around 2.64 million TEU handled annually
Over 1,000 new motor vehicles per day on average
Total trade of nearly 90 million revenue tonnes
Total trade value around A$92 billion

Asset scale

Over 500ha of port land
36 commercial berths
21 kilometres of waterfront, including 7 kilometres of quayline
Over $2 billion invested in port infrastructure over the last decade, including the Port Capacity Project (completion is imminent)

Shipping and navigation

More than 3,000 ship visits annually
First port in Australia to operate as a VTS authority under Commonwealth accreditation
Professional hydrographic survey

Environmental