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QIC-owned Queensland Motorways Buys CLEM7 Tunnel

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The Queensland Investment Corporation (QIC), through its global infrastructure arm, bested competitors in a bid for Brisbane’s Clem Jones tunnel (CLEM7). The A$ 70.3 billion QIC purchased the toll road for AS 618 million through its toll road business Queensland Motorways. The road was built at an original cost of A$ 3 billion.

The impending acquisition of CLEM7 will bolster the toll road portfolio of Queensland Motorways. According to a statement, “The addition of the CLEM7 tunnel will further expand and diversify the growing Queensland Motorways asset portfolio of toll roads, which currently includes the Gateway, Gateway Extension and Logan motorways, and will include the Go Between Bridge by late 2013, followed by Legacy Way Tunnel on construction completion in mid-2015.”

The original intent of CLEM7 was to help facilitate traffic between the suburbs north and south of the Brisbane River; however, traffic projections proved to be inflated, and Brisbane’s first private toll-way sunk under its own borrowing.

The acquisition can be seen as a bittersweet result for the northeast Australian state. On the one hand, it picked up a recurring revenue stream for pennies on the dollar. On the other hand, private infrastructure investors might think twice about investing in Australia’s recently proposed infrastructure bonds.

Infrastructure bonds are being suggested as a way to help augment Australia’s limited resources dedicated to infrastructure investment. But a recent slew of bankruptcies including Lane Clove Tunnel in Sydney are undoubtedly concerning.

Atlas Merchant Capital and GIC Scoop Up Stake in Ascensus

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Atlas Merchant Capital LLC and Singapore’s GIC Private Limited acquired just under a 25% equity stake in Dresher, Pennsylvania-based Ascensus, the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. San Francisco Genstar Capital LLC and New York-based Aquiline Capital Partners LLC were the sellers of the shares in Ascensus and will maintain control over the company.

Atlas Merchant Capital LLC was founded by Bob Diamond and David Schamis. Diamond is the former group chief executive of Barclays plc.

GIC is an investor in Alight Solutions, a provider of human capital solutions.

Advisors

Barclays acted as the lead financial advisor and J.P. Morgan acted as financial advisor to Ascensus in connection with this transaction. Willkie Farr & Gallagher LLP acted as legal counsel to Ascensus.

Debevoise & Plimpton LLP acted as legal counsel to Atlas Merchant Capital and Sidley Austin LLP acted as legal counsel to GIC.

In 2015, JC Flowers sold Ascensus to Genstar Capital and Aquiline Capital Partners.

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The Value of Research: Skill, Capacity, and Opportunity

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This article is sponsored by S&P Dow Jones Indices.

How much should a portfolio manager be willing to pay for research? The question is of importance to any manager, but has become particularly pertinent since newly imposed European rules require that the costs of investment research—previously offered by many investment banks as an in-kind consideration in return for brokerage business—be unbundled from trading.

Unfortunately, attempts to determine a fair value for research in the most general circumstances are doomed to fail. Even if we only consider direct recommendations to buy or sell certain securities, the value of such recommendations to a portfolio manager will vary according to the absolute size of positions taken in response. Instead, we provide a framework for estimating relative research values across markets and constituents, under certain stylized (but reasonable) assumptions.

REPORT: The Value of Research: Skill, Capacity, and Opportunity

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Khazanah to Scale Back International Investments, Preps 2019 Dividend

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Malaysia’s Khazanah Nasional Berhad is prepping to declare more than 1 billion MYR in a dividend payout to the Malaysian government for 2019. Khazanah Nasional is undergoing a significant strategy shift to focus more on domestic assets, while selling off venture tech investments, overseas real estate, fund investments, and other non-strategic assets. The wealth fund also plans to scale back its overseas presence in markets such as San Francisco and London.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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