Jason Boyes, who becomes chief executive of Infratil next week in the headquarters of investment bank Morrison & Co, which manages the fund. Photo / Mark Mitchell
As Jason Boyes prepares to become chief executive of one of New Zealand's largest companies, the range of possibilities could hardly be wider.
On the one hand he could - through no fault of his own - become one of the shortest-serving chief executives in NZX history, while on the other, he could find himself in charge of deploying a vast sum of money at a time when valuations of the types of assets Infratil owns and invests in are changing at unprecedented speed.
On Thursday, Boyes becomes chief executive of Infratil, an investment fund run by Wellington-based investment bank Morrison & Co.
The company began in 1994 as a $50 million fund with a cornerstone shareholding in Trustpower, but has now grown into a $5 billion owner of airports, renewable energy businesses, telecommunications companies, data centres and healthcare.
He has worked at Morrison & Co for more than a decade, but his experience with the company predated joining it in 2011.
Boyes grew up in Blenheim before moving to Wellington for law school. He spent 15 years as a lawyer, becoming partner at Buddle Findlay, having spent time working for UK law firm Slaughter & May during a spell in London.
His time at Buddle Findlay would eventually see him assist Infratil on its purchase of the downstream New Zealand assets of Shell, later rebranded Z Energy.
It was a watershed moment for Infratil, which partnered in the deal with the New Zealand Superannuation Fund, and also for Boyes' career, as he grew to know the key staff at Morrison & Co.
Not long afterwards Lloyd Morrison, the late founder of the eponymous investment bank, called him up inquiring what the bank would need to do to get him to work there. Boyes, impressed by what the company was doing, responded "not much".
Since joining he has been credited with leading the 2013 flotation of Z Energy, its acquisition of a major stake in Vodafone NZ, the capital raising which followed and the establishment of international renewable energy businesses.
He has held the roles of head of legal, chief commercial officer and chief financial officer of Morrison & Co.
Most recently he has been head of the firm's Europe division and was even in London in March 2020 preparing to relocate, selecting schools and looking at houses, until Covid-19 prompted a return to Wellington.
Less than a year later he was announced as Infratil's new chief executive, the third in the company's 27-year history.
In theory at least, the new job could be a short one.
In December, AustraliaSuper, the behemoth pension provider, revealed publicly that it had made a $5.4b offer for the company.
Infratil insists the process for replacing long-time chief executive Marko Bogoievski was under way. Boyes admits he has thought about the possibility of a short tenure.
"It is a worry, and in some ways it is a bit of a shame. We were already working on it before AusSuper turned up, right?
"In other ways, it's quite invigorating, because we thought we were sharp before AusSuper came along, but we're laser focused now, no doubt about it."
Analysts have speculated that the nearly $3b deal announced this month to sell Tilt Renewables, the Australasian wind farm developer, spells the end of the AustraliaSuper offer, as the majority stake in the renewable energy business and its data centre business CDC, were the likely main attraction.
"There's only been one asset class that's hotter than renewables at the moment, and that's data centres, so we've been fortunate to be in those places from a shareholder perspective, but that is weight of money because there is a lot of money around."
While Boyes believes the offer is "gone for now", no one expects formal notification that the interest is over and other suitors may be more likely than before.
"Is it a genie out of the bottle? There's less impediment to anyone writing the letter. It's our job to get on with business really."
The alternative to Infratil being taken over is Boyes immediately being responsible for deciding what to do with the largest cash pile the fund has ever had.
Infratil's gross share from the sale is more than $1.9b, or $1.7b after Morrison & Co's fees.
Tilt was sold to a consortium of Australian investors and Mercury (Tilt's other major shareholder).
While he claims the new owners may be better able to extract value from the business than Infratil was, Boyes described the price for Tilt as "astonishing" and in excess of what its majority owners expected when it launched the review just over three months ago.
"The acceleration of investment into the climate transition has been phenomenal. Everybody's been caught by surprise on that," he said. "The pace of change has been unprecedented in valuations."
It remains to be seen whether the step change in the value of international renewables assets is a one off, or the wider implications of money being pumped into the system by central banks to keep economies going, which was boosting asset prices everywhere.
"It's almost like the widget that you use to keep score has changed, rather than the intrinsic value, which is quite worrying."
While it might be worrying generally, Boyes said the weight of money looking for a place to be invested has been good for Infratil shareholders, as infrastructure generally, and renewable energy and data centres were in demand.
"There's only been one asset class that's hotter than renewables at the moment, and that's data centres, so we've been fortunate to be in those places from a shareholder perspective, but that is weight of money because there is a lot of money around."
Infratil revalued its 48 per cent shareholding in CDC up 70 per cent last year to $1.55b, while analysts at Forsyth Barr have said it could be worth $3b.
Boyes appeared to dismiss the idea that Infratil would review its ownership of the business to expose its value, largely because the growth prospects for the business are strong.
"There's two elements to a decision to sell. One is current valuation but two is the growth outlook. You might get good valuation for what you've got today, but if you've still got plenty of room to grow, do you hang on for that journey? We're definitely in that camp for CDC.
"With Tilt, the pace of development is quite different. It's been good, don't get me wrong, incredibly strong. But their pace of development was much more determined by Government policy, particularly in Australia."
Boyes gives little away about where the proceeds of Infratil could go, other than it is likely to be in the areas the company is already operating in. The company had been "ferreting out ideas" since announcing the Tilt review in December.
"I think what our shareholders want is good ideas to invest their money in, so that's our job. That's what we've been preparing to do since before we announced the sale of Tilt, so we think we've got some good ideas, but equally we're not just going to put it in there for the heck of it. We didn't get to where we are today by just doing that, that's for sure."
Returning cash to shareholders was a possibility, a step the company had taken after it sold its holding in Z Energy, but while it would be inefficient to sit on the cash for a long period of time, the feedback from shareholders were they were more interested in finding good investments than they were in receiving payouts.
"I think if you were just sitting on cash in 12 months time that you didn't really need and you look like you've run out of ideas that could change, which is fine by the way, [but] I think at the moment the net view if you can continue to do what you've done in the past, then please do."
There were "a bunch of opportunities in front of us" in New Zealand, although it was challenging to find opportunities which were at scale.
"The market cap now is five and a bit billion. To be meaningful in the portfolio, it needs to be able to get up to around a billion to be meaningful in the portfolio.
"That's more the constraint at the moment, there's only so many sectors, but we're quite positive at the moment that it can be done."
The sale of Tilt, and the announcement that TrustPower is looking to sell its retail business, has sparked commentary that the Tauranga-based company (from which Tilt was spun out of in 2016) could be looking to move back into a renewables development business.
Boyes said there are a number of interesting things happening in the New Zealand electricity market, from the work of the Climate Change Commission, to the potential exit of the Tiwai Point aluminium smelter or even the potential for a massive pumped hydro scheme at Lake Onslow in Otago.
"I think there are a really interesting set of options around TrustPower, or New Zealand energy, right now," Boyes said.
"I don't think anyone really knows how much renewables needs to be built, but we know it's more, and TrustPower could be a really good developer again."
Separate to the decision on what to do with the money, it appears Infratil has engaged in a little soul searching in the wake of the takeover process, after receiving significant feedback from shareholders, about how the company is perceived.
While some feedback appears to verge almost on the romantic, with shareholders celebrating the ability to own a company which has grown into one with an impressive collection of strategic assets, some appeared to see the company as distant.
"From what I can tell now, and we got a lot of feedback during the takeover, [it was] a little bit surprisingly, the emotional connection people felt they had to Infratil and what we'd achieved, which was lovely.
"But it's clear that we're viewed as smart investors who've delivered over a long period of time," which had attracted close to 40,000 investors.
"People value the ability through a New Zealand company to access New Zealand strategic assets, but also really interesting stuff that's happened offshore. That kind of mix is valuable to people.
"I do worry that being seen as smart investors sometimes makes us seem aloof, which is not intentional."
Boyes doesn't say so, but it appears there is concern that Infratil could be seen as distant, even arrogant. There is clearly a sense of mystery. Infratil's structure means it has no employees of its own, or even a headquarters.
Outside the building where the company is operated from is a nameplate for Morrison & Co. Rather than a foyer, guests ring a bell to be allowed into an entrance with a darkened lift to be taken to an equally dark foyer with unusual art and meeting rooms behind invisible doors.
The headquarters was designed by Lloyd Morrison himself and bankers from other parts of the financial services sector believe it was designed to be intimidating. Boyes said the company's approach was more playful.
"The intention in the past has been to have a sense of mystery around us, which I think is great and quite fun and a little bit playful.
"But I would like us to, and we would all like to feel, or seem, less aloof from our communities, because we're definitely not, and our companies are not, either. They're very embedded in our communities and focused on them.
"So that's a bit of a work on, in my mind, which was on all of our minds, to make sure that potential perception…doesn't get too embedded, because it's not how we are as individuals."
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