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ESG Investing / Asset Management
Queensland state fund manager opens Singapore office
QIC promotes diversification, sustainability, healthcare, infrastructure to Asian investors
Tom King 14 Nov 2023

State-owned Queensland Investment Corporation (QIC), already a well-known investment partner in Asia, has recently expanded into the region with the soft opening of a new office in Singapore.

The move by the the fund manager to establish a presence in the Southeast Asian wealth and financial hub is expected, says Ross Israel, the fund’s head of global infrastructure, to “reinforce QIC’s engagement with existing Asian stakeholders while broadening its reach to potential new investors”.

The fund manager has A$102.8 billion (US$65.50 billion) in assets under management and has grown into a significant long-term specialist manager in alternatives since its formation in 1991.

“Opening in Singapore is very exciting for us, and it’s something that has been in the wings for a while,” he says. “We have a couple of people already in place and are ready to expand that up to about five people by the middle of next year.”

Asian investors, according to Israel, continue to be drawn to Australia due to its robust regulatory regime, less-leveraged economy and opportunities emanating from its enduring commodity market, adding: “It’s a good adjusted risk diversifier for capital from Asia.”

Energy transition commitment

Australia, under the government of Prime Minister Anthony Albanese, has made a strong commitment to sustainable investment, with a focus on reducing greenhouse gas emissions by 43% from 2005 levels by 2030 and achieving net-zero targets by 2050.

Those factors are now complemented by the country’s energy transition commitment with the Albanese government ramping up action on its ambitious pledges to implement renewable energy and drive the country to become a low-carbon economy. 

Queensland, where the fund manager is headquartered, is particularly invested in renewable energy, with specific targets and a focus on sustainable infrastructure. And the fund manager, Israel shares, is actively engaged in investing in renewable energy solutions, such as solar and onshore wind, and addressing the challenges of long-distance transmission of renewable energy, energy storage and electrification.

As a state, Queensland is committed to renewable energy targets of 70% by 2032 and net zero by 2050. At the moment, about 20% of Queensland’s electricity comes from renewables.

Fundamentals are attractive

The state fund manager is also committed to investing in natural capital and sustainable agriculture, which is supported by its Queensland Natural Capital Fund, a vehicle designed to invest in commercial farming assets, with a focus on carbon, biodiversity and reef credits.

The investment corporation’s thematic investment approach seeks to enable institutional investors to benefit from long-term trends of addressing challenges of population growth, food security, biodiversity protection and climate change.

In partnership with the fund manager, Asian investors have also been attracted to the healthcare sector in Australia, such as in hospitals and healthcare facilities.

QIC’s Global Infrastructure Fund owns 79% of Nexus, Australia’s second-largest day hospital platform with a national footprint of day- and short-stay hospitals across six states and territories in Australia, and 92% of Evolution Healthcare a leading comprehensive and day hospital operator with a strong presence in New Zealand.

Sustainability, diversity

The fund manager is also active in constructive engagement with the boards of hard-to-abate industries it is invested in to make sure that they are walking the talk on their sustainability pledges.

“As an owner of ports and airports, we’re engaged in how we decarbonize the services that we facilitate, such as electrification at those respective ports and airports, and in how we provide sustainable fuels going forward to decarbonize airlines and shipping lines,” Israel shares. “These are some areas where we’re tangibly involved in working with management teams in our portfolio companies.”

QIC’s Global Infrastructure Fund owns 15.84% of Brussels Airport and 25% of Brisbane Airport the key domestic and international gateway to Brisbane and southeast Queensland, and 35% of Hobart International Airport.

The infra fund also owns 40% of the Port of Melbourne the largest container and general cargo port in Australia and 26.7% of the Port of Brisbane.

“And on the social side, we’re committed to diversity quotas on boards,” Israel notes. “We have an objective to work through the benefits of diversity in the workforce and not only at the board level, but also in the management and employee layers’ of companies.”

Olympic premium

In addition to being a prime hinterland for investment in renewables, Israel also wants to remind investors that Brisbane, Queensland’s commercial and political capital, and now Australia’s third-largest city, is the host of the 2032 Summer Olympic Games.

“There is a focus on infrastructure development in Brisbane, particularly due to the upcoming 2032 Olympics, so investments in infrastructure development, including transport, stadiums and precinct development, may be relevant for Asian investors,” he states. “We’ve, obviously got some core backbone infrastructure to deal with in respect to the 2032 Games, and that could see tremendous opportunities for some of our investors.

“We have a large metro project that’s going on in the city of Brisbane, and our real estate colleagues are involved in some of the precinct developments above the rail stations. And with the Olympic infrastructure agenda being further defined in the coming years, there will be some really good opportunities for investors from Asia to partner with.

“Brisbane 2032 is also aiming to be the first net-zero games. It’s going to be very exciting from an infrastructure investment perspective and, because the Olympics is bipartisan, the political alignment to get things built will be strong.”

 

 

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