Macquarie’s getting Active in Ben Becks’ embedded utility space

Macquarie Bank has struck a deal to buy 25 per cent of Active Utilities, an embedded electricity and utility network operator.

Ben Beck is the managing director of Active Utilities. Picture: Aaron Francis

Macquarie Bank has struck a deal to buy 25 per cent of Active Utilities, a fast-growing embedded electricity and utility network operator owned by Ben Beck.

While terms of the deal have not been disclosed, the Active business bills about $100m worth of electricity, internet, water and other utilities to its customers annually, mostly in large residential strata buildings and increasingly for shopping centre owners and commercial properties.

Beck is the son of Max Beck, the veteran Melbourne property developer and member of The List — Australia’s Richest 250, and has built Active into one of the country’s largest embedded network operators since establishing the business in 2006.

He said the Macquarie deal would help Active continue its growth and also make a push into renewable energy, including plans to install solar panels on every building at the large Essendon Fields project in Melbourne’s north and across the airport precinct.

“Quite a few people have tapped us on the shoulder to buy us out or partner with us over the years, but I wanted to partner with someone who made sense for our business and someone who could help scale it,” Mr Beck told The Australian.

“Macquarie banks 80-plus per cent of the strata industry, so that gives us more access to that. But they give us tentacles into a range of different industries that help us grow into what is the smarter building space, be it via the acquisitions they make or their international business.”

Embedded networks buy energy and other utilities such as internet broadband and water from a retailer and then onsell the energy and other services to the different customers at a site, such as tenants in strata residential buildings.

In the case of electricity, for example, Active will put one meter in the basement of a building and buy the power as a wholesaler and then bill it to a tenant at a discounted rate. Money is made on the margin between what the retailer charges and the tenant pays.

“The tenant gets access to cheaper rates, the building gets access to cheaper rates but the arbitrage between the building and the tenant, the building can take some of that margin as well,” Mr Beck said.

“We are a retailer the same as an AGL or an Origin or Telstra. One of our differences is we consolidate all those utilities on the one bill. They can have their heating and cooling, electricity and internet on the one bill.”

Mr Beck established Active in 2006, after working in the family construction business Becton and then a stint at what is now the timeshare company Accor Vacation Club.

“It was about getting at the coalface of marketing. Timeshare is about as aggressive as you can get in the sales and marketing space, and I was able to cut my teeth there.

“But I realised I didn’t really want to work for anyone else; I wanted to start my own business. Working for Dad I had the opportunity in a development and construction business to see the issues they’d had working with utilities, connecting power and telecommunications and the like. It was a difficult process.”

Deregulation of the electricity sector in Victoria helped Mr Beck’s business expand, as did strategies such as striking deals with buildings across business parks. Previously, each building tenant would buy their own phone system, but Active would build one large phone system at the centre of the park and then provided a service to each building, saving the owners capital expenditure and then give a discount given they had bought the service in bulk.

Mr Beck said the business has particularly benefited from the apartment boom, and while that market continues he is also shifting into more commercial property work, particularly with shopping centre owners who are looking to keep costs down or explore new revenue streams by installing solar panels or selling electricity to tenants.

Active was, Mr Beck said, also investigating how power in rental or Airbnb apartments could be shut down when not in use, and was also building the power network for 400 electric vehicle chargers in a new Melbourne CBD apartment project.

“If you installed 400 vehicle chargers into a building the (power) substation would usually have to be quite large to accommodate that. But we inject smarts that mean the building can talk to the chargers.”