The $50 billion industry super fund will take full ownership of the largest wind farm in Western Australia as it moves to boost its infrastructure portfolio.
Rest has agreed to buy out UBS Asset Management's 60% stake in Western Australia's Collgar Wind Farm, taking full ownership of the renewable energy project it has been involved in since 2010.
Collgar - WA's largest wind farm at a size of 18,000 hectares and 206 megawatts of total capacity - generates between 40% and 50% of the state's renewable electricity on average. It held a five-star Global Real Estate Sustainable Benchmark rating in 2018.
Rest's in-house investment manager Super Investment Management negotiated and concluded the deal. Its chief investment officer George Zielinski said the acquisition would strengthen Rest's infrastructure portfolio.
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"Collgar Wind Farm is a premium infrastructure asset that has been delivering strong returns for Rest members. Renewable energy projects like this will continue to play an important role in Australia's future," Zielinski said.
"As an existing owner, Rest has been able to monitor and assess the wind farm's operational performance since construction was completed in 2011. Taking full ownership is a great opportunity to drive further value from the asset and strengthen Rest's infrastructure portfolio.
"The project has and is expected to continue to generate sustainable cash flows. We are confident it will help grow members' retirement savings into the future."
Infrastructure makes up around 6% of the fund's core strategy. It's an asset class, Zielinski said, the fund has been focusing on, pointing to its recent investment in California's Long Beach Container Terminal through a Macquarie Infrastructure Partners-led consortium.
"Rest's aim is to build out an infrastructure portfolio that is diversified across geographies and asset types," he said.
"The portfolio also includes investments in other renewable energy projects, airports and transmission networks."
UBS Asset Management said its real estate and private markets infrastructure business - the arm which held its 60% stake in Collgar - determined the time was right to divest after it reached the end point of its business plan for the wind farm.
"We identified the potential for our first greenfield investment opportunity almost a decade ago. We are proud of the project's long-term environmental contribution and look forward to its continued success under Rest's full ownership," UBS Asset Management head of infrastructure Tommaso Albanese said.
"We continue to invest in similar such opportunities that offer our clients access to a wide spectrum of mid-market infrastructure investments across the globe."