Australia’s Future Fund, QIC Buy 19.8% Stake in Toll Road Owner Connect East

Future Fund CIO Ben Samild said the deal is in line with the A$223.4 billion sovereign wealth fund’s strategy to increase its Australian dollar exposure.

The Future Fund, Australia’s A$223.4 billion ($147.6 billion) sovereign wealth fund, and the Queensland Investment Corp., have completed their acquisition of a 19.8% stake in Australian toll road network owner ConnectEast Group  from New Zealand Superannuation Fund and Teachers Insurance and Annuity Association of America.

Financial terms of the deal were not disclosed.

ConnectEast Group owns EastLink, which is the largest toll road network in the Australian state of Victoria and sees an average of 250,000 vehicles, including 50,000 commercial vehicles, a day. The company also owns the 1-km-long Ringwood Bypass in Melbourne.

The acquisition will be added to the Future Fund’s global infrastructure portfolio, which had assets of more than A$21 billion as of March 31. QIC, a Queensland government-owned investment company with A$111 billion in funds under management, has been tapped to manage the investment.

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“This is the Future Fund’s first direct investment in an Australian toll road and is in line with our strategy to seek more Australian dollar exposures,” Future Fund CIO Ben Samild said in a statement.

“Infrastructure assets such as Eastlink provide reliable long-term returns and help to protect the portfolio from sustained higher inflation and interest rates.”

Samild said the Future Fund has invested more than A$11billion in Australian infrastructure assets, including Melbourne Airport, Perth Airport, Port of Melbourne, Canberra Data Centres, telecommunications service provider Amplitel, forestry and sawmill business OneFortyOne Plantations, and wind and solar farm owner Tilt Renewables.

QIC said the acquisition will increase its worldwide transport sector investments under management to A$13.2 billion. QIC’s other Australian transport infrastructure investments include the NorthWestern Roads Group, Port of Melbourne, and the Port of Brisbane.

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