by Ganesh Sahathevan
Returns generated from the infrastructure portfolio included divestitures by Equis, a fund manager in our portfolio, of its renewable-power platform consisting of solar, wind and hydroelectric power operations in Australia, Japan, India, Indonesia, the Philippines and Thailand.................
Left unsaid is the fact that a portion of the assets were ring fenced, for the benefit of Equis' founders, a deal uncovered by Euromoney:
The inside story of Equis and its partners’ $800 million bounty
The partners (led by Australian David Russell ),most of them ex-Macquarie bankers, had delivered for their investors, who included some of the biggest institutional names in the world: the University of Texas/Texas A&M Investment Company (Utimco), Partners Group, Willis Towers Watson, BlackRock, JPMorgan Pension, numerous Australian superannuation funds, and others representing the Dutch, German and Malaysian state.
Over $500 million of the proceeds was allocated to a separate vehicle from which the limited partners (LPs – investors like pension funds) were excluded. The result of that was that David Russell and his colleagues are believed to have walked away with as much as $800 million, more than 20% of the gross equity proceeds. Even in the high-octane world of private equity, that’s quite something.
Did they take away too much? Since they were entitled to hundreds of millions of dollars by any estimation, wasn’t that enough? David Russell and his partners legitimately made a fortune out of the Equis Energy sale. The question is whether more of the proceeds should have been shared with the pensioners and endowments who were ultimately funding the enterprise.
TO BE READ WITH
Sunday, November 28, 2021
Najib oversaw deal funded by Malaysian state investment agency that created Australian billionaires who celebrated their good fortune by buying exotic cars, luxury homes, yacht
by Ganesh Sahathevan
The deal that enriched the Australians was concluded in January 2018 while Malaysia's Najib Razak was Prime Minister and Finance Minister.
According to Euromoney:
When renewables private equity group Equis Energy was sold to GIP for $5 billion – $3.7 billion of it equity – investors walked away with well over double their initial investment. The founders of Equis made around $800 million. But why was more than $500 million of the proceeds ringfenced into a vehicle called Equis Renewables, in which the underlying investors did not participate, while the general partners got it all? The story of how those assets got there casts a light on the curious inner workings of modern private equity.
When the money cleared, the partners of Equis went shopping to celebrate. Founder and leader David Russell got a yellow Lamborghini; his brother Tim, a personalized orange Porsche. Craig Marsh settled upon a black McLaren with carbon-fibre trims.
They had reason to celebrate. The clearance of funds that day in January 2018 marked the conclusion of the biggest renewable energy sale ever completed.
The Australian newspaper reported in March 2018 that (David Russell) was buying a Melbourne mansion from Shane Warne for close to A$20 million ($13.5 million), and the following month Brisbane’s Courier Mail reported he had bought a trophy home in Noosa, Queensland, for A$18 million in a deal that set a record for the entire Sunshine Coast region.
Saturday, November 27, 2021
Empowered to uplift Bumiputera welfare, Malaysian state investment fund created Australian billionaires instead
by Ganesh Sahathevan
The Daily Telegraph of Melbourne has published a story about the super yacht Lady E and its owner, billionaire David Russell , who is from Melbourne but now lives in Singapore.
In 2019 Euromoney published an investigative story about how Russell made his billions,.The story included a reference to an entity representing the "Malaysian state":
The inside story of Equis and its partners’ $800 million bounty
The partners (led by Australian David Russell ),most of them ex-Macquarie bankers, had delivered for their investors, who included some of the biggest institutional names in the world: the University of Texas/Texas A&M Investment Company (Utimco), Partners Group, Willis Towers Watson, BlackRock, JPMorgan Pension, numerous Australian superannuation funds, and others representing the Dutch, German and Malaysian state.
Over $500 million of the proceeds was allocated to a separate vehicle from which the limited partners (LPs – investors like pension funds) were excluded. The result of that was that David Russell and his colleagues are believed to have walked away with as much as $800 million, more than 20% of the gross equity proceeds. Even in the high-octane world of private equity, that’s quite something.
Did they take away too much? Since they were entitled to hundreds of millions of dollars by any estimation, wasn’t that enough? David Russell and his partners legitimately made a fortune out of the Equis Energy sale. The question is whether more of the proceeds should have been shared with the pensioners and endowments who were ultimately funding the enterprise.
Malaysian state investment entities are expected to uplift Bumiputera welfare. In this case it appears that the unnamed Malaysian state entity created Australian billionaires instead.The Equis deal does not seem to have received much publicity in Malaysia; it is perhaps time for Malaysian agencies to ask what it is that drove the managers of the entity to be so generous to a non-Bumiputera, and a foreign one at that.
END
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