EQT recently held its fifth annual US Industrial Advisor Conference in New York.
“The US market has increased in importance and opportunity for EQT and EQT’s Infrastructure funds. EQT is building a growth oriented track record in the US and we are scaling up the ambitions”, comments Glen Matsumoto, Partner and Head of investment advisor EQT Partners Inc., at the fifth annual US Industrial Advisor Conference held in New York City in late August attended by 30 US based EQT Industrial Advisors plus professionals from EQT Partners’ New York office and some of their European colleagues.
The EQT Infrastructure funds, which make investments in infrastructure companies, today own four companies in the US – RTI (providing essential edible oil management service to the foodservice industry in the US), Peregrine Midstream (a midstream natural gas storage company), Westway Terminals (a bulk liquid storage company with terminals located in 15 locations across the US and Canada), and the most recent US acquisition, Synagro Technologies. Synagro is the US market leader in the treatment and recycling of the organic by-product of the wastewater treatment process, so called biosolids.
“Having a strong network of Industrial Advisors in the markets where the EQT funds invest is an important prerequisite for success, we have a “local with locals” mantra across EQT’s target markets. There are cultural differences in corporate governance practices in the US compared to other EQT markets. However, we are finding that the EQT Governance Model, with the TROIKA, its Nordic approach and high level of transparency, is a clear and important differentiator for EQT compared to other private equity firms and infrastructure investors in the US”, continues Glen Matsumoto.
“Another important conclusion drawn from discussions with EQT’s US Industrial Advisors is the way EQT works with growth focused strategies in portfolio companies. Our core belief is that when you focus on building and developing companies from a long-term perspective, superior value creation for EQT’s fund investors will follow”, stated Glen Matsumoto in his closing remarks at the Conference.
The first EQT Infrastructure fund investment, Midland Cogeneration Venture (MCV, one of the largest gas-fired cogeneration power plants in the US), is a good example of EQT’s focus on building excellent companies. MCV was acquired in May 2009. In December 2012, EQT exited MCV to buyer Borealis Infrastructure, the infrastructure arm of the Ontario Municipal Employees Retirement System (OMERS), one of the largest institutional investors in Canada.
“MCV went through a transformation that only few could have imagined back in 2009. I am very proud that the operational performance of the plant increased significantly while employee safety further improved”, says Roger Kelley, former MCV CEO and current EQT Industrial Advisor attending the Conference.
“Borealis Infrastructure was a perfect match for MCV. I’m confident that the employees and customers of MCV, the local community where MCV is located in Michigan and Borealis Infrastructure as new owner will benefit for many years to come from the industrial acceleration applied during EQT Infrastructure’s ownership of MCV”, concludes Glen Matsumoto.