AustralianSuper sells stake in NSW power network Ausgrid to APG Asset Management

A Dutch pension provider has bought a stake in NSW power distributor Ausgrid in a $2.2bn deal.

AustralianSuper has sold a chunk of its stake in NSW power utility Ausgrid.

APG Asset Management has snapped up a slice of AustralianSuper’s stake in NSW electricity distributor Ausgrid for over $2.2bn.

The deal, sees APG Asset Management, the Netherland’s largest pension provider, snap up 16.8 per cent of the unlisted asset.

Ausgrid is the licensed electricity distributor for large areas of Sydney, the Central Coast, and Hunter Valley, the largest electricity distribution network within the Australian National Energy Market.

The NSW Government sold off 50.4 per cent of Ausgrid to AustralianSuper and IFM in December 2016 for $16bn in a deal engineered by then state treasurer Gladys Berejiklian.

The deal, signed on Wednesday night, now values Ausgrid at $25bn including debt.

APG Asset Management made the purchase on behalf of its pension fund client ABP.

The deal saw the Dutch pension fund fend off competition from Macquarie Infrastructure and Real Assets and the Ontario Teachers’ Pension Plan, advised by Royal Bank Canada, to buy the interest.

Credit Suisse worked with APG Asset Management to secure the stake, which saw final bids due last Friday.

APG Asset Management Asia head of infrastructure Hans-Martin Aerts welcomed the deal.

“We are pleased to become an investment partner in Ausgrid. We see this asset as a great addition to our clients’ investment portfolio,” he said.

“Ausgrid is expected to play a critical role in the energy transition and contribute to further carbon emission reductions. We look forward to working with our partners to ensure a long-term, stable and sustainable investment return for our clients.”

AustralianSuper head of infrastructure Nik Kemp said the sale was “pleasing” and showed the strong demand for long term infrastructure opportunities.

The superannuation funder, Australia’s largest, said the deal would allow it to rebalance its $25bn infrastructure portfolio, noting the funds could allow it to “participate in future growth opportunities”.

Australian Super has more than $17bn invested in Australian infrastructure.

“Ausgrid is a high-quality asset with a talented management team that has contributed positively to member returns, while also delivering benefits to customers and the community. AustralianSuper remains a significant investor in Ausgrid,” Mr Kemp said.

“As markets evolve and the Fund continues to grow, AustralianSuper needs to actively manage its portfolio to ensure it is invested in a range of assets that offer the best long-term financial outcome for members.”

AustralianSuper said it had sunk more than $5bn in Australian and global infrastructure asset, including interests in Sydney’s WestConnex road, and the Australian Towers Network.

The Super Fund has also made investments in Transurban Chesapeake, the toll road providers Washington expansion, as well as Peel Ports in the United Kingdom.

AustralianSuper has more than $110bn invested across the Australian economy.