LEGAL REPORT/M&A
Mutually beneficial
Public sector deals offer investor stability while bringing private sector management skills to the table. BY JENNIFER BROWN
I
t could be said the perfect storm has created the ideal climate for private-public sector partner- ships and joint ventures to take shape in the last few years. The
state of the economy being what it is means two factors are at play: pension and other investment funds are looking for solid entities to funnel money into in an attempt to deliver decent returns. At the same time, there are government bodies interested in partnering with the private sector to help them better man-
age increasingly costly infrastructure projects. Pension funds are the logical buyers
for these types of public-sector proj- ects, says David Brown, a partner at WeirFoulds LLP who co-chairs a private equity conference each fall. "They get up and talk about how they love these assets and the reason is that to keep generating seven- to 10-per-cent return it's tough, so they love these assets that can throw off stable, and in some cases government-guaranteed, cash flows.
42 M A RCH 2012 www. CANADIAN Lawyermag.com
They love toll roads, for example, like [407] ETR and the secondary trading of assets like that. They have built-in col- lection mechanisms often administered or assisted by government. These types of assets are incredibly lucrative." Brookfield Asset Management Inc.
announced in September that it was purchasing a substantial stake in two Chilean toll roads from a Spanish firm for US$291 million. A consortium led by Brookfield acquired ACS Group's 46-per-cent stake in the Vespucio Norte
KIm ROSEN
