In a recent ION Influencers Fireside Chat, Roger Lloyd, CEO of Palisade Investment Partners, discussed the trends in mid-market infrastructure investing.
Roger Lloyd’s Background: Roger Lloyd shared his extensive experience in the infrastructure sector, spanning over three decades. His career began in investment banking at Bankers Trust and Macquarie Bank. He founded Palisade Investment Partners 17 years ago, just before the Global Financial Crisis (GFC).
Market Cycles and Stability: Lloyd highlighted the stability of the Australian market, noting its resilience and lack of significant cycles compared to other economies. He emphasized the importance of taking a long-term view in infrastructure investing, despite short-term global events.
Trends in Mid-Market Infrastructure: The conversation shifted to the bifurcation in the market, with larger funds growing and mid-sized funds specializing. Lloyd explained that specialization isn’t necessarily sector-specific but involves focusing on less competitive, mid-market assets. He highlighted the benefits of building platforms from multiple smaller assets to create value.
Sector Focus and Evolution: Lloyd detailed Palisade’s approach to evolving sector focus, citing examples like the shift from PPPs to renewable energy and digital infrastructure. He emphasized the importance of flexibility and adapting to attractive sectors, such as energy transition and digital infrastructure.
Proprietary Deals and Relationships: Lloyd underscored the significance of proprietary deals in mid-market investing, which constitute 70% of Palisade’s portfolio. He stressed the value of relationships and the ability to structure deals that meet both vendor and investor objectives.
Governance and Value Creation: The discussion touched on optimal governance practices and the use of industry experts. Lloyd described how Palisade leverages non-executive directors and industry champions to enhance value creation and accelerate growth post-acquisition.
Bullish Sectors and Geographic Focus: Lloyd expressed bullishness on the energy transition and digital infrastructure sectors, particularly in the US mid-market. He noted the vast opportunities despite current noise and political uncertainties.
Conclusion: The fireside chat concluded with Lloyd’s optimistic outlook on the stability of the Australian market and the promising opportunities in the US mid-market infrastructure sector.
Key timestamps:
00:07 Introduction to the Fireside Chat
01:29 Starting Palisade Group During the GFC
03:17 Current Trends in Infrastructure Investment
04:06 Market Conditions and Investment Opportunities
04:52 Bifurcation in the Fund Market
05:29 Specialization in Infrastructure Investing
07:31 Creating Value in Mid-Market Investments
08:19 Adapting to Market Changes
09:20 Focus on Energy Transition and Digital Infrastructure
11:00 Building Scalable Platforms in Infrastructure
13:19 Meaningful Relationships in Investment
15:03 Insights from Data and Sector Analysis
17:40 Optimal Governance and Industry Experts
19:32 Value Creation Post-Acquisition
20:49 Value Creation Strategies
22:19 Operational Asset Management
23:18 Investment Focus and Trends
24:56 Regional Investment Insights
25:47 Political Climate and Business Impact
