Morrison & Co says other clients aligned with Infratil, offer investment opportunities
By Jonathan Underhill
May 13 (BusinessDesk) - Morrison & Co, the Wellington-based investment manager that founded Infratil in 1994, says clients taken on since then are potential partners of the listed fund and provide a wider scope for assessing business opportunities.
Morrison & Co Infrastructure Management was paid a management fee of $19 million by Infratil for the year ended March 31, down from $19.7 million a year earlier. Notes to Infratil's annual accounts also show other fees paid to parties associated with Morrison & Co, including for investment banking services, of $2.6 million, down from $2.9 million in 2013.
Since 2006 it also has a global infrastructure investment mandate from the New Zealand Superannuation Fund, which is a cornerstone investor in Public Infrastructure Partnership Fund that Morrison & Co launched in 2009. It has a "strategic partnership" with Fisher Funds since buying a 26 percent stake in that firm in 2008 and inviting managing director Carmel Fisher onto its board and this year was appointed as an investment manager for the Australian government's Future Fund.
Marko Bogoievski, who is chief executive of both Morrison & Co and Infratil, was asked at Infratil's annual results briefing how shareholders in the fund could be confident they were getting a benefit from the 'symbiotic relationship' between the two entities when investment opportunities were identified.
"Morrison & Co itself is representing a few more clients and I think the clients that we're taking on in every respect are potential co-investment partners with Infratil and they enable us as an organisation, in this case talking about Morrison & Co, to scan more opportunities, to develop more capability in additional sectors," Bogoievski said. "I think you get access to origination and capability that we're probably unlikely to have as a standalone organisation operating in a market like this alone."
Infratil partnered with the NZ Super Fund to buy Shell’s downstream assets, later rebranded as Z Energy, which they sold down and floated on the stock exchange last year. They also bought a combined 40 percent stake in retirement village operator Metlifecare last year.
Bogoievski referred questions about the relationship to Infratil chairman Mark Tume but said "I would accept that as markets evolve you need to consistently assess whether that's the right relationship going forward."
He said with 20 years of data and behaviour "you can judge for yourself whether the relationship has been a positive one or not."
Tume wasn't immediately available to comment.
Infratil had net assets of $2.6 billion as at March 31, down from $2.68 billion a year earlier. It will pay a final dividend of 7 cents a share, up from 6 cents a year earlier and bringing annual payments to 10.75 cents. The company said on a conference call that it was confident of double-digit growth in dividends for the 2015 and 2016 years as gains from investments stoke cash flows.
Infratil's shares rose 2.2 percent to $2.34 on the NZX and have gained 40 percent over the past five years, while the NZX 50 Index rose 85 percent. The stock is rated a 'buy' based on the consensus of six analysts polled by Reuters.