Innovative $2.1B Energy Infrastructure REIT Launched
First-of-its-kind investment vehicle for energy infrastructure sector
Dallas, Texas, November 29, 2010
Hunt Power, Marubeni Corporation, John Hancock Life Insurance (USA), TIAA-CREF, and OPTrust Private Markets Group announced today they have agreed to form Electric Infrastructure Alliance of America (EIAA) and Gas Infrastructure Alliance of America (GIAA) as real estate investment trusts (REITs) to invest in the energy infrastructure and gas storage and delivery sectors in the United States. These alliance members will invest up to $2.1 billion to develop and acquire electricity and gas transmission and distribution assets, primarily in Texas, the Great Plains and the desert Southwest. These will be the first REITs of their kind in the electricity and gas transmission and distribution sector.
“This is an innovative direct investment alliance, leveraging the expertise and active participation of the members, within a new REIT structure that will help to mobilize capital to invest in the electricity and gas transmission and distribution sectors,” said Kirk Baker, Chairman and President of both EIAA and GIAA, and Senior Vice President of Hunt Power.
Subsidiaries of Hunt Power will manage the REITs and will invest up to $322.5 million in cash and assets in the alliance, Marubeni will invest up to $500 million, John Hancock will invest up to $450 million, TIAA-CREF will invest up to $450 million, and OPTrust will invest up to $400 million.
“Marubeni, as a leading Japanese investor in the global electric power market, is pleased to join with other world-class investors to look for potential opportunities in the U.S. electric power transmission and distribution sector,” said Toshi Fukumura, Senior Vice President at Marubeni Power International, Inc. “This investment provides a strong platform for growth in the U.S. transmission and distribution sector.”
“EIAA and GIAA are actively seeking to partner with utilities, co-ops, municipalities and local distribution companies seeking expertise and capital to upgrade and expand their infrastructure systems,” said Jerry Hanrahan, Managing Director, John Hancock Power and Project Finance. He added, “EIAA and GIAA will have the financial strength, broad industry expertise and the ability to transact as opportunities are identified.”
“TIAA views energy infrastructure services in the U.S. southwest as a good addition to our growing portfolio in infrastructure,” said Lisa Ferraro, Managing Director, Energy & Infrastructure, TIAA-CREF. “This alliance unites a strong developer and manager with substantial investors so that all can participate in the growth of the region for the long term benefit of our respective clients.”
“We are all pleased to be investing in a new and innovative REIT investment vehicle that represents a transformative means of mobilizing capital in the electricity infrastructure sector. As a group of active investors in this alliance, we all look forward to unlocking the operational and financial potential this transaction provides,” said Kevin Warn-Schindel, Group Head & Managing Director of OPTrust Private Markets Group.
As part of this transaction, EIAA will acquire an interest in Sharyland Distribution and Transmission Services (SDTS), an affiliate of Hunt Power. SDTS will own five line segments and four substations that have been proposed as part of the Competitive Renewable Energy Zone (CREZ) transmission build out in the Electric Reliability Council of Texas (ERCOT). The facilities will be built by Sharyland Utilities, L.P., and once completed, will form a loop in the Texas Panhandle and South Plains that will bring wind power to major load centers in Texas while enhancing reliability. Applications for regulatory approval have been filed with the Public Utility Commission of Texas for all five segments, with final decisions expected by May 2011. Construction is expected to be completed in 2013. There will be no changes from an operational perspective, as Sharyland Utilities will continue to operate the assets as a regulated utility and will continue its activities under the jurisdiction of the Public Utilities Commission of Texas. Possible future acquisitions by EIAA could significantly expand the group’s activities into other regions of the United States.
About Hunt Power (Media Contact: Jeanne Phillips, Senior Vice President of Corporate Affairs and International Relations, 214 978-8534, firstname.lastname@example.org)
Hunt Power, L.P., is part of an affiliation of privately-held companies, which are wholly-owned subsidiaries of Hunt Consolidated, Inc., directed by Ray L. Hunt. These entities are engaged in oil and gas exploration and production, Liquefied Natural Gas (LNG) processing, refining, alternative energy, power, real estate, private equity investments and ranching.
Hunt Power and its affiliate SDTS own the electric transmission and distribution assets currently operated by Sharyland Utilities, L.P., a Texas-based public electric utility privately owned by Hunter L. Hunt and other members of the family of Ray L. Hunt. In addition, a subsidiary of Hunt Power, Hunt Transmission Services, L.L.C, provides support services to Sharyland Utilities and is actively working with Sharyland Utilities in identifying, analyzing, and negotiating new growth opportunities, either through acquisition of existing assets or through new incremental construction projects.
Both Hunt Power and Sharyland Utilities are managed by Hunter L. Hunt.
About Marubeni Corporation (Media Contact: Daniel Welt, Vice President Development, 212 450-0433, email@example.com)
Marubeni is a Japanese sogo shosha or “trading house” headquartered in Tokyo, Japan. It owns over 7,600 MW of net capacity in its global IPP portfolio and owns utilities in Jamaica and Grand Bahama Island and transmission lines in Australia. Together with Marubeni’s recently announced investment in Atlantic Wind Connection, this investment in EIAA provides Marubeni with a strong platform for growth in the U.S. transmission and distribution sector. Marubeni will look for further expansion and investment opportunities in the U.S.
About John Hancock (Media Contact: Brian Carmichael, Director, Corporate Communications, 617 663-4748, firstname.lastname@example.org)
John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. For more than 120 years, clients have looked to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Funds under management by Manulife Financial and its subsidiaries were C$474 billion (US$460 billion) as at September 30, 2010.
Manulife Financial Corporation trades as “MFC” on the TSX, NYSE and PSE, and under “945” on the SEHK. Manulife Financial may be found on the Internet at www.manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including life insurance, fixed and variable annuities, fixed products, mutual funds, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at www.johnhancock.com.
About TIAA-CREF (Media Contact: Chad Peterson, Director, Corporate Media Relations, 704 988-6811, email@example.com)
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $434 billion in combined assets under management (as of 9/30/10) and provides retirement services to the academic, research, medical and cultural fields.
About OPTrust Private Markets Group (Media Contact: Gordon Forstner, DFH Public Affairs, 416 206-0118 ext. 221, firstname.lastname@example.org)
OPTrust manages one of Canada’s largest public pension plans, serving more than 82,000 members and pensioners, and has over C$12 billion ($US11.7 billion) in assets under management.
The OPTrust Private Markets Group (“PMG”) is the private markets investment arm of OPTrust, a jointly sponsored Canadian pension fund. PMG is responsible for all of OPTrust’s private markets investing which includes both private equity and infrastructure with a total capital allocation of $5.5 billion. PMG has offices in London and Toronto and has a dedicated team of over 30 professionals with significant principal investing expertise.
Within the infrastructure portfolio, PMG has considerable experience in sourcing, executing and managing businesses across a variety of sectors globally, including renewable power, conventional power generation, regulated utilities, transportation and social infrastructure at various stages of development (i.e. both operational and development assets).
Please see www.optrust.com for further information on OPTrust.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.