AA UNION CAPITAL INVESTMENT STRATEGY

Value Investing in Sectors Where AA UNION CAPITAL Has Proven Expertise, Applying private equity disciplines to maximize value and drive returns in infrastructure assets.

  • Transport

  • Energy & Utilities

  • Communications

  • Infrastructure Health

Transport

Investment Focus – Rail

…or long term concession

Unregulated or transparent framework

Compelling traffic fundamentals

…strong potential

Sub-optimal infrastructure

Under-exploited commercial opportunities

Energy & Utilities

Investment Opportunity

Renewable Disruption

The challenge for the energy market today is
to deliver reasonably priced, reliable power
supply, while providing increasingly cleaner
sources of energy

Clean, Reliable Energy

Government support for renewables has led
significant investment into wind and solar which has
led to instability in power grids due to the timing of
supply not matching demand

Decentralisation

Markets moving from large centralised
generation assets to a multitude of small
decentralised assets with more customer control

Connectivity of Markets

Interconnectivity of gas markets is leading to greater
flexibility, customer choice and a need for flexible
infrastructure

Communications

Investment Opportunity

Data Demand

• More users demanding higher quality data
• Internet of Things adding to bandwidth shortage
• Preparing for internet everywhere
(network densification, 5G etc.)

Political Environment

• Push for network access in rural areas leading to
additional infrastructure demand
• Local broadcast promoted & protected to support
regional identity

Operator Competition & Outsourcing

• Capex for opex efficiency with private capital investment
• Outsourcing and market consolidation creating
economies of scale
• Watch on labour, energy and rent costs

Facilitating Economic Disruption

• Emerging disruptive business models
• Potential for further rapid growth
• Rise of the cloud and virtualisation
• Watch on technological obsolescence

Infrastructure Health

Investment Opportunity

Aging Demographic

A growing global aged population requiring
greater care needs with comorbidities and
higher acuity

Lifestyle Conditions

Growing prevalence of conditions of affluence
(obesity, diabetes and cardiac complications)
due to rising incomes and increasingly sedetary
lifestyles

Efficient Provision Of Services

Demand for healthcare outpacing economic
growth places significant pressure on payors to
maximise efficiency. Increased opportunity for
scale and consolidation

Complexity Of Care

Increasing cost and complexity of care due to
variety and advancement in treatment options,
specialisation and well informed patients
expecting better outcomes

Integrated Investment Process

AA Union Capital Employs a Consistent, Robust and Exhaustive Approach to its Investment Processes

Identify opportunities & preliminary due diligence

Identify opportunities & preliminary due diligence

  • Weekly team meeting with rigorous screening based on
    – Relative attractiveness
    – Compliance with investment strategy
    – ESG analysis
    – Portfolio fit (diversification across currency, sectors, risks)
    – Value-add opportunities
    – Competitive landscape
    – Resources
  • Peer review brings diverse perspectives/objectivity
  • Appropriate sector specialist/asset management involvement

Creating Value through Active Asset Management

Combining a private equity approach with AA UNION CAPITAL’s strong infrastructure heritage to drive value

Driving value creation within the individual portfolio company

  • Identifying and executing value accretive acquisitions

  • Selection of high calibre non-executive directors

  • Operational efficiency improvements

  • Management team selection, development and incentivisation

  • Optimising business planning

  • Driving strategic direction

  • Leading contract negotiations

  • Growth projects

  • Capital management and structuring

  • Influencing other shareholders

Proactive and consistent application of AA Union Capital’s infrastructure heritage approach drives value across the portfolio

  • Asset transition plans and 100 day plans

  • Unified approach to HR strategies

  • Portfolio synergies

  • Joint ventures to harness strengths across investors

  • Cyber security

  • Imbedding ESG considerations

  • Tax optimisation

  • Developing and implementing hedging strategies

  • Procurement expertise

LET’S WORK TOGETHER

We work as a single united team with market leading firms around the world and give our clients the highest quality advice possible.

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