Thames fund aims to float on the NZX

An infrastructure fund launched yesterday offering New Zealanders the chance to own a stake in London's Thames Water will invest in other infrastructure projects and eventually float on the NZX.

Equity Partners Infrastructure Fund No 1 (Epic) is offering 96.7 million shares at $1 each and will use the cash to acquire a 1.22 per cent stake in Thames Water, which Macquarie Bank paid £8 billion ($21.6 billion) for in a takeover last year.

Epic will initially be an unlisted fund but Equity Partners director George Kerr said the plan was to move to an NZX listing in 12 to 18 months.

The Thames Water stake was just the first asset in the fund. An NZX listing would be sought when the further acquisition had been identified.

Kerr said Epic's partnership with Macquarie would enable it to take advantage of investment opportunities from the bank's wide range of global infrastructure assets.

But he said Epic would not be obliged to invest in any particular asset and could also invest in non-Macquarie assets.

"What we're trying to do is pick the eyes out of the opportunities that come our way via Macquarie and others.

"They are free to deal with other people as are we. We can either accept or reject the deals that are proposed by Macquarie."

Macquarie will act as advisers to the fund and will manage the initial public offer. The offer is expected to be completed by the end of the month.

Epic has been structured to take advantage of the portfolio investment entity (PIE) tax regime which begins on October 1. Kerr said the tax changes enabled the fund to offer a high after-tax yield - expected to initially be 9.1 per cent per annum.