Australia’s QIC Invests in Smart Metering with Vector

QIC has announced a contractual close for a joint venture deal with Vector Limited’s New Zealand and Australian smart metering business for US$ 2.34 billion. The business is called Vector Metering. Vector Metering is the local market leader in Australia and New Zealand.?The deal, which remains subject to regulatory approvals, follows Vector’s request for QIC to serve as its preferred joint venture partner.?The deal consists of a sale by Vector of a 50% interest in Vector Metering to a new fund and co-investors managed by QIC Infrastructure. QIC Infrastructure has AU$ 28.9 billion in 23 assets currently, with foreign offices in New York and London. According to QIC, their goal is to maintain “an ‘Active-Core’ asset management strategy driving value creation across each stage of our investment process and supported by majority control positions or strong positions of influence or negative control.” Elements of the Active Core include “engagement with management teams on business plans, stakeholder engagement, operational improvement and growth opportunities including through our Board representation.”

Vector Metering owns and operates 2.3 million meters across the electricity and gas markets in Australia and New Zealand. QIC’s Head of Infrastructure, Ross Israel said that energy transformation is at the core of this deal: “With this investment, QIC Infrastructure’s global investments supporting the transition to a low-carbon economy have grown to AU$ 5 billion. Our energy platform assets also aim to invest more than AU$ 15 billion in the energy transition over the next five years. Smart meters have a critical role to play in the ‘decarbonization’ of the electricity supply in both Australia and New Zealand. Their role is rapidly evolving from data processing for timely billing purposes. They are an enabler for electricity networks to manage an ever-increasing volume and volatility of electricity supply due to the broader energy transition and increasing penetration of renewable generation.” QIC and Vector plan for an additional extensive introduction of smart meters to cover most habitable areas in Australia. This will increase Vector’s market dominance should it materialize.

The Queensland government formed QIC in 1991. QIC bills itself “as an alternatives specialist with a long-term investor mindset.” Investments range from infrastructure, real estate, private capital, liquid market solutions, multi-asset portfolios, active fixed interest and tailored overlays. QIC manages AU$ 98.7billion, or US$ 67.9 billion.

Advisors

Advisors to the deal were JP Morgan, Craigs Investment Partners, Herbert Smith Freehills and Russell McVeagh.

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