Infratil owns infrastructure businesses that provide essential services to individuals and communities. If they are efficient and provide good services they create opportunities for profitable growth. This requires continual refinement and improvement because the needs of individuals and communities evolve, business practices and models improve, and technology changes.
Over the last four years Infratil has raised over $1,500 million from divestments and allocated $940 million to the purchase of ownership interests in RetireAustralia, ANU Student Accommodation, Envision Funds, Canberra Data Centres and Longroad Energy. It has also supported the creation of Tilt Renewables.
The object of these transactions is to position Infratil to be able to take advantage of sectors experiencing strong demand growth. Z Energy was an excellent investment, but consumption of motor fuel is not rising. On the other hand, Canberra Data Centres is in a sector with seemingly limitless growth potential.
However, there is always a gap between planting a seed and harvesting the fruit. For instance, Tilt Renewables was formed in October 2016; the earliest date its first wind farm development could be generating is October 2018, and it would be some time after that before the value created by the development is known.
Investing involves patience and a willingness to forgo now in expectation of later rewards. Infratil’s board and management are confident that businesses such as Canberra Data Centres, Tilt Renewables, Longroad and RetireAustralia will be making growth investments in the near term that will create value for Infratil shareholders.