Newly-formed Australian infrastructure debt fund manager Rearden Capital has announced the composition of its board.
The firm, which will invest capital through independent mandates with two or three large super funds, will focus on senior secured debt. It is open to the idea of a traditional closed-ended fund, however, with “a couple of smaller super funds” having expressed interest in such a vehicle should a cornerstone investor come forward, the firm said in a statement.
Rearden's board will be chaired by Nick Greiner, former premier and treasurer of New South Wales, and the recently retired chairman of Infrastructure New South Wales. He is deputy chairman of CHAMP Private Equity.
Vaughan Busby, founder and chief executive of Rearden, was previously the founder of New Zealand infrastructure manager HRL Morrison & Co's Australian arm. He is chairman of Perth Energy, and a non-executive director of Australian Stock Exchange-listed Energy One.
The rest of the board comprises: Tony Shepherd, chairman of the Business Council of Australia with extensive infrastructure project experience including the $2 billion Melbourn City Link project; Mark Tume, a director of New Zealand Super (New Zealand's equivalent to the Future Fund); and Ottmar Weiss, who has more than 25 years' experience in banking, finance and risk management, latterly at Macquarie Bank where he was global head of the equity markets group and a member of its executive committee.
Chief executive Busby said in a statement: “We believe there is significant opportunity and would expect investors will diversify some of their fixed income portfolio into infrastructure debt. The rationale is compelling as debt offer better yields than fixed income but it also benefits the broader economy in that it assists developing Australia’s core economic infrastructure.
“Post-GFC many institutional investors are looking for improved portfolio diversity with greater capital protection. The long-term nature of infrastructure debt with its inflation adjusted returns will appeal to many institutional investors. Infrastructure debt can take some of the volatility out of a portfolio whilst still providing solid cash yields typically associated with infrastructure assets. Also in a rising interest rate environment I expect fixed income managers will start including floating rate debt products in their portfolios.”
“The fact that Rearden is a truly independent player will also appeal. A number of equity managers are looking to manage debt and I think the conflicts are just too great,” he added.