Unlisted
BGP Investment Sarl (GPT JV)
In February 2005, Babcock & Brown and General Property Trust (GPT) announced a $1 billion strategic joint venture. The joint venture was formed to pursue real estate investment, trading, and development opportunities worldwide.
In November 2006, following the GPTJV reaching its initial investment target of $5.6 billion, the two parties agreed to the expansion of the GPT JV which included the commitment of a further $800 million in capital.
On 7 June 2007, a number of changes to the Joint Venture were outlined to ensure it is well positioned to build on the success and positive momentum achieved to date. The changes result in the appointment of Babcock & Brown to manage the Joint Venture portfolio (Joint Venture Fund).
During the year ended 31 December 2007, the Joint Venture Fund invested in or committed to acquire assets and projects in Australia, the Czech Republic, Denmark, France, Germany, Lithuania, the Netherlands, Poland, Spain, Sweden, the UK and North America.
The book value of investments held and contracted at 31 December 2007, was $7.4 billion.
At 31 December 2007, the Joint Venture Fund had contracted and completed investments in Europe with a carrying value of €3.2 billion (A$5.4 billion), and in the US with a carrying value of US$1.4 billion (A$1.9 billion).
At 31 December 2007 the composition of the European portfolio was 32.1% residential properties, 20.4% light industrial, 15.7% retail and 4.1% office. The portfolio in the US comprised 14.9% retail, 5.9% multifamily and 4.9% mezzanine. The residential portfolio comprised 1.3% in Australian mezzanine funding and 0.7% in UK mezzanine funding.
Babcock & Brown European Infrastructure Fund
On 25 May 2007 Babcock & Brown announced the first close on its wholesale European Infrastructure Fund, Babcock & Brown European Infrastructure Fund (BBEIF) with commitments of €1.6 billion (A$2.5 million).
BBEIF made its first investment in June 2007, co-investing with Babcock & Brown in acquiring a 10% shareholding in Brisa Auto-Estradas de Portugal S.A. (Brisa), the listed international motorway and toll road company based in Portugal.
On 3 December 2007 Babcock & Brown announced that it had reached final close on BBEIF with total commitments of €2.17 billion (A$3.8 billion) exceeding its initial target of €1.5 billion (A$6.4 billion).
In January 2008 BBEIF acquired a strategic 20% stake in Forth Ports plc.
BBEIF will target additional investments in the energy, water and transport sectors as well as other critical infrastructure assets.
Babcock & Brown Asian Infrastructure Fund
On 23 November 2007 Babcock & Brown announced the first close on its wholesale Asian Infrastructure Fund, Babcock & Brown Asia Infrastructure Fund (BBAIF), raising US$400 million (A$456 million) of capital.
BBAIF has been set up by Babcock & Brown in partnership with The Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU) and has been established to focus on the growing number of infrastructure investment opportunities in the Asian region including China, Hong Kong, India, Japan, Malaysia, Republic of Korea, Singapore and Thailand.
BBAIF used part of the committed capital to acquire a strategic stake in Don Muang Tollway PCL, Thailand.
UK Retail Property Syndicates
The Division has two closed retail property syndicates in the UK.
Foundation Property Fund raised £8.7 million (A$21 million) from retail investors and reached close in May 2004. The fund’s strategy is to invest in UK real estate assets in the office, retail and industrial sectors. The fund can borrow up to 80% of the portfolio's gross asset value. The fund’s 10% return profile seeks to provide a balance between income and capital.
Viking Fund raised £5.2 million (A$12.5 million) from retail investors and reached close in July 2005. The fund can borrow up to 90% of the portfolio's gross asset value. The fund is able to invest into any property sector and can also invest in corporate entities, debt instruments secured against property or any other real estate related investment. It can invest in both the UK and the EU countries of Europe. The fund’s 15% return profile focuses primarily on providing capital return to investors.
Capital Commitments for North American Infrastructure
In October 2007, Babcock & Brown raised approximately US$800 million (A$911 million) of committed capital focused primarily on infrastructure investment opportunities in North America. A further US$230 million (A$262 million) of committed capital was raised in November 2007 increasing the total amount raised for acquiring North American infrastructure to over US$1 billion (A$1.1 billion). Some of the capital committed has been used to co-invest in the acquisition of Natural Gas Pipeline and ICS Logistics alongside BBI. Consistent with Babcock & Brown’s philosophy of co-investment and alignment with investors, it will hold approximately 5% of overall capital commitments, capped at US$90 million (A$103 million).
Subsequent to year end a close on further commitments of capital was reached, taking the total commitments to in excess of US$1.4 billion (A$1.5 billion).