Lead Manager

SECTION 3
BUSINESS OVERVIEW
In 1996, Babcock & Brown began to focus on taking principal investment positions in projects developed under
the UK Government’s Private Finance Initiative (PFI or PPP) and has since developed assets in the sector with a
gross development value of £418 million.
In 1997, the Infrastructure and Project Finance Group expanded into the Australian infrastructure market through
the acquisition of Australian Industry Development Corporation (AIDC). AIDC was a Commonwealth
Government-owned investment bank with a significant presence in the Australian infrastructure and project
finance market. Babcock & Brown on-sold or liquidated certain businesses of AIDC, principally the
non-infrastructure-related businesses, retaining a significant and profitable infrastructure investment portfolio and
pipeline.This business formed the basis of the current Australian Infrastructure business.
Babcock & Brown’s Australian business was further strengthened through the establishment of Prime
Infrastructure (Prime Infrastructure), an ASX listed infrastructure fund. Prime Infrastructure was established with
the Dalrymple Bay Coal Terminal (DBCT) (see case study that follows) as its foundation asset.
The Asian business was established in 2002. Babcock & Brown believes that there are significant opportunities
in a number of Asian markets as private infrastructure development is further encouraged in those regions.
Business activities
Financial advisory and arrangement
Babcock & Brown’s financial advisory and arrangement practice was established in the 1970s.The Infrastructure
and Project Finance Group has built a strong reputation for its ability to execute complex transactions requiring
innovative financing solutions. Babcock & Brown’s success in this field has been acknowledged through a high
level of repeat business and its receipt of a number of industry awards. Recent awards include:
• 2003 Financier of the Year – American Wind Energy Association
• 2003 Asian Infrastructure Deal of the Year (Pusan Newport) – Project Finance International
• 2003 Asia-Pacific Project Finance Advisor of the Year – Project Finance International
• 2003 European Utilities Deal of the Year (City of Mannheim) – Asset Finance International
• 2003 US Power Distribution Deal of the Year (Tennessee Valley Authority) – Asset Finance International
• 2002 European Renewable Deal of the Year (Eurovento) – Project Finance
• 2002 European Manufacturing Deal of the Year (Stendal Pulp Mill) – Project Finance
Principal investment and investment management
Babcock & Brown has successfully parlayed its industry expertise, experience and relationships developed as an
advisor into successful principal investment businesses in Australia, the US and Europe. Babcock & Brown has
acted as a principal, developer, equity sponsor and bridge financier, and has also purchased portfolios of completed
infrastructure assets. Babcock & Brown’s typical focus is on the “risk capital” component of any funding, being
the equity, preferred equity or subordinated debt. On limited occasions Babcock & Brown may invest in the
direct senior debt component of the capital structure.
Sector focus and experience
Over the past 20 years, Babcock & Brown has completed transactions across a wide range of infrastructure
industry sub-sectors but has to date chosen to focus on several specific sub-sectors where it believes it has a
competitive advantage. Babcock & Brown’s recent experience in these sub-sectors is described on the
following pages.
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