A. Business Overview
Quinbrook Infrastructure Partners LLC (the “Firm”) is a Delaware limited liability company formed on
14th March 2016, as part of the Quinbrook group (“Quinbrook” or the “Group”). The sole member is
Quinbrook Infrastructure Partners (Jersey) Limited (the “Manager”), a Jersey registered limited
company (registered number 121767) which is regulated by the Jersey Financial Services Commission
(the “JFSC”) as a Fund Services Business class U. The Manager is ultimately beneficially owned by
Messrs. David Scaysbrook (50%) and Rory Quinlan (50%) (together the “Founders”) who together
form the Board of Managers of the Firm.
The Manager has been appointed as an Investment Manager by Quinbrook Infrastructure Partners
(GP1) Limited (the “General Partner”), a Jersey limited company (registered number 121416)
regulated by the JFSC as a Fund Services Business class ZJ, in its capacity as the general partner of the
Quinbrook Low Carbon Power LP and Quinbrook Low Carbon Power Parallel Fund (US) LP ( together
the “Fund”) as well as US Wind Co-Investment Partners LP (“Wind Co-Invest”), UK Gas Co-Investment
Partners LP (“Gas Co-Invest”) together the “Co-investment Funds” and certain co-investment capital
as yet unallocated to a specific vehicle. The Manager is a specialist ‘value add’ investment manager
that originates, acquires, constructs, operates and manages, direct investments in low carbon and
renewable energy infrastructure assets and businesses.
B. Advisory Services
The Firm provides investment advisory services to the Manager in respect of the Fund and Co-
investment Funds, which fall into four main categories discussed in more detail below. The Manager
(an Exempt Reporting Adviser) receives investment advice not only from the Firm, but also from two
other Exempt Reporting Advisers (together with the Firm “the Advisers”), namely Quinbrook
Infrastructure Partners Limited based in the UK and Quinbrook Infrastructure Partners Pty Limited
based in Australia. The Advisers each employ small teams of people with responsibilities across deal
origination, asset management, administration, compliance, and investor relations. The Advisers all
perform similar functions, although with different emphases, across the following four categories:
i. Sourcing, analysing and recommending investments or exits
The Advisers provide origination and analysis services regarding relevant assets and
businesses in the target jurisdictions of the Manager’s strategy. The Firm focuses specifically
on origination and evaluation of assets in the USA, but its scope of services is not limited to
this jurisdiction. The Firm employs personnel with extensive experience in the renewable
energy industry, as well as expertise in financial modelling and analysis. The Manager seeks
to make primarily control investments in lower carbon and renewable power infrastructure
assets and businesses primarily in the United States of America, the United Kingdom and
Australia. It targets both pre-construction project opportunities as well as distressed
operating assets which offer turnaround potential, but it will not consider marine/tidal,
ethanol, waste to energy, or technology businesses. The Firm will present a recommendation
paper to the Manager’s Investment Committee for each investment transaction proposed.
The board of the Manager makes all investment decisions, as well as the decision to allocate
portions of individual assets for co-investment.
ii. Facilitating or executing transactions
Should any investment recommendation from any Adviser be accepted by the Manager, the
resources of any of the three Advisers can be deployed to facilitate the purchase or
divestment, and manage the transaction. As previously discussed, the Firm is primarily
focussed on proposed investments within the USA, where the Manager benefits from the
Firm’s specific geographic expertise and contacts, as well as the familiarity of the Firm’s
employees with the asset to deliver the best outcomes it can.
iii. Asset Management and Oversight
Once an asset has been acquired for the Fund’s portfolio, the Advisers assist in the oversight
of the asset management processes, in particular the day-to-day operation of the acquired
business or asset. The Firm’s location in the USA makes it particularly suited to assist in the
management of assets located within the USA, but the teams of any Adviser may be called
upon to assist where there is specific technological or industrial expertise in another team
but the services are provided to the Manager and not to the other Advisers and so no
recharge or separate engagement is required.
iv. Marketing the Fund
The Manager is responsible for investor relations, with support in varying degrees from the
Advisers. The Firm lends support to marketing efforts through its network of contacts which
do include some potential investors, but primarily through presentation of due diligence
materials.
C. Tailoring of Advisory Services
The Firm has been appointed by the Manager to support its marketing efforts in the United States.
As such, the Firm has developed relationships with several US institutional investors. Any investor
making a commitment to the Fund is offered the opportunity to also commit an equivalent amount
to co-investment opportunities, through vehicles established and controlled by the Manager.
The Firm tailors its investment advice to the investment strategies of the Fund and the Co-Investment
Funds. The Manager has the power to enter into side letters with investors, which may waive or
reduce fees, grant enhanced transparency, or require consultation before certain structural changes
are contemplated.
As of 31 December 2019, the Manager has discretion over c.USD 1bn of commitments, with c.USD 525m of
capital currently deployed in the USA which the Firm has facilitated. The investment strategy dictates that
>50% of the Fund’s ultimate portfolio will be US assets, and the Firm expects to facilitate additional
transactions in the USA in the coming months. 100% of the Wind Co-Invest portfolio will be US assets.
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The Firm is paid an advisory fee by the Manager to cover the costs incurred in exploring and recommending
infrastructure projects for investment. No part of the fee is negotiable.
Certain expenses incurred by the Firm will be recharged to the Manager, and ultimately recharged to the
Fund or Co-Investment Funds. The categories of expense that can be recharged are set out in the Fund’s
governing documents and include regulatory expenses, the costs of external consultants or advisers engaged
to work on certain investments, acquisition and financing expenses, legal fees, and out of pocket expenses
incurred in the investigation, monitoring and disposal of the Fund assets.
Information on fees to be charged by the General Partner of each fund will be described in the relevant fund
offering documents, and generally takes the form of a percentage of the fund’s total committed capital. The
General Partner is permitted to enter into side letters and other agreements granting more favourable rights
or terms to certain investors.
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Certain of the Firm’s supervised persons are entitled to participate in the group’s carried interest plan. Once
offered the opportunity, participation is at the discretion of the supervised person. Participation is not
considered to create a conflict of interest for two reasons; i) that participation generally results in alignment
of interests with investors; and ii) that the investment advice provided by the Firm to the Manager can be
accepted or rejected at the Manager’s sole discretion.
Currently the Manager does not collect performance fees. However, the Fund documents allow for the
Manager to charge performance fees on future products. Such performance fees may create an incentive for
the Manager to make more speculative investments on behalf of the Fund than it would otherwise make in
the absence of such performance-based arrangements. If the Fund performs poorly, the Manager may have
an incentive to devote resources to other activities from which it has better prospects for earning incentive-
based compensation. However, the Firm is paid on a fixed-fee basis by the Manager, which reduces the risk
of conflicts of interest arising in the recommendation of investments.
Although not currently contemplated, the Firm is entitled to provide advisory services to other Clients. This
could give rise to conflicts of interest where supervised persons participate in the carried interest plan of the
Manager but not of other Clients. These conflicts are managed by the Firm’s policies, including the Deal
Allocation Policy, Conflicts Policy, Compliance Manual and Code of Ethics.
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The Manager is the Firm’s only direct client. The Manager has been appointed to manage the Fund
investments, and may be appointed to manage investments on behalf of other investment vehicles
contemplated by the Founders. The Firm therefore acts as sub-adviser to the pooled investment vehicle
clients, which are therefore also counted among the Firm’s clients.
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A. Methods of Investment Analysis
Each of the Investment Advisers conducts research on potential investments via a combination of
document review, interviews, and site visits. Documents include both published industry research
and private corporate documents, including legal documents, customer agreements, financial
records and projections and business plans. Interviews are conducted with a range of key officers,
suppliers, customers and competitors. Often the Advisers will retain consultants, legal advisers, and
financial advisers to supplement its own analysis.
The Firm focuses primarily on investment opportunities within the USA, though its team can be called
upon to analyse provide services relating to assets in other jurisdictions at the Manager’s request.
The Firm relies on the industry knowledge of its US-based investment team members to select the
analysis tools and to carry out the preliminary evaluation of the opportunity.
Based on the compiled information from the research phase, the Firm will apply its own analysis tools
and methodologies to evaluate the potential investment and produce a recommendation which is
supplied to the Manager.
B. Material Risks in Investment Methodology
The success of the investment methodology will depend in substantial part upon the skill and
expertise of the Firm’s personnel and third party consultants retained by the Firm. There can be no
assurances that such individuals will continue to be employed or to function on behalf of the Fund.
The loss of one or more individuals may have a material adverse effect on the ability of the Firm to
provide high quality investment advice.
C. Security-Specific Risks
The Firm provides investment advice concerning assets in the energy infrastructure sector. The
material risks in this sector include:
i.
Reduction in Federal and State Support for Renewable Energy: Renewable energy projects
currently enjoy support from national, state and local governments and regulatory agencies
designed to finance development of renewable energy. The combined effect of these programs
is to subsidize in part the development, ownership and operation of renewable energy projects,
particularly in an environment where the low cost of fossil fuel may otherwise make the cost of
producing energy from renewable sources uncompetitive. Any reduction in or elimination of
these programs could have an adverse effect on the future development of renewable energy
projects and resources.
This is a key risk in energy investing given that all energy markets in developed economies are
heavily regulated, whether it be oil and gas, electricity or gas transmission, power generation or
renewable power supply. Global fossil fuel subsidies in 2014 are estimated at around US$ 490
billion, with subsidies to renewable energy technologies in the power sector of US$ 112 billion
(
Source: World Energy Outlook 2015, IEA). There is a dichotomy evident in energy markets in so
far as regulatory risk is concerned. On the one hand, fossil or emissions intensive energy supply
is now encountering unprecedented regulatory risk in the potential pricing or taxing of carbon
emissions and the reduction of fossil fuel industry subsidies. This can increase the costs of
production and supply of fossil energy and may have the effect of increasing the pricing of that
energy as increased costs are passed onto consumers. Higher electricity prices are but one
relevant example. On the other hand, many renewable energy technologies (especially those
that deliver intermittent supply, such as solar PV and wind energy), may require the
maintenance of price support mechanisms to achieve the expected investment returns except
in energy economies where such renewable energy supply has met or is approaching ‘grid
parity’. Any retrospective change to those regulatory mechanisms is an investment risk. So, what
is a regulatory risk currently to the fossil energy sector is conversely an opportunity for
renewable energy as increased electricity prices directly benefit low-carbon energy suppliers
who are either exempt from a carbon cost or have lower exposure to it. Accordingly, regulatory
‘risk’ must be seen in a comprehensive energy market context as opposed to a risk attaching to
renewable energy alone.
ii.
Contract Risk: To the extent that the Partnership invests in assets that are governed by
concession agreements with government authorities (whether at the national, state, local,
district or other level), there is a risk that the agreements with such government authorities may
contain clauses more favourable to the government counterparty than would a typical
commercial contract. For instance, a lease or concession may enable the government to
terminate the lease or concession in certain circumstances without requiring it to pay adequate
compensation. In addition, government counterparties also may have the discretion to change
or increase regulation of the Partnership’s operations or implement laws or regulations affecting
the Partnership’s operations, separate from any contractual rights they may have.
iii.
Environmental Regulation: Environmental laws, regulations and regulatory initiatives play a
significant role in the emerging low-carbon and renewable energy industries and can have a
substantial impact on investments. Quinbrook will seek to carefully evaluate the expected
impact of environmental compliance on all potential investments. The Fund may invest in
portfolio companies that are subject to changing and increasingly stringent environmental and
health and safety laws, regulations and permit requirements.
There can be no guarantee that all costs and risks regarding compliance with environmental laws
and regulations can be identified. New and more stringent environmental and health and safety
laws, regulations and permit requirements or stricter interpretations of current laws or
regulations could impose substantial additional costs on portfolio companies or potential
investments. Compliance with such current or future environmental requirements does not
ensure that the operations of the portfolio companies will not cause injury to the environment
or to people under all circumstances or that the portfolio companies will not be required to incur
additional unforeseen environmental expenditures. Moreover, failure to comply with any such
requirements could have a material adverse effect on a portfolio company, and there can be no
assurance that portfolio companies will at all times comply with all applicable environmental
laws, regulations and permit requirements. Past practices or future operations of portfolio
companies could also result in material personal injury or property damage claims. Under certain
circumstances, environmental authorities and other parties may seek to impose personal
liability on the limited partners of a partnership (such as the Fund) subject to environmental
liability. However, an investor in the Fund may reduce its risk of such personal liability by
avoiding activities with respect to the Fund’s portfolio investments other than as specifically
contemplated by the constitutional documents of the Fund.
iv.
High Capital Costs for Certain Renewable Energy Investments: Renewable energy projects
typically involve relatively high levels of capital investment and such up-front expenditures
involve a certain degree of risk.
v.
Political and Societal Challenges: Renewable energy projects will be subject to locational issues
and requirements that are similar in many respects to those applicable to fossil fuel plants.
Proposals to site a renewable energy plant may be challenged based on alleged security
concerns, disturbances to natural habitats for wildlife and adverse aesthetic impacts. In addition,
there is the possibility that political and societal challenges could delay or prohibit the
construction of a project.
vi.
Effects of Ongoing Changes in the Utility Industry: The Fund may make certain investments in
portfolio companies directly related to electric utility industries in the United States, Australia,
the European Union and elsewhere. In many regions, including the United States, the electric
utility industry is experiencing increasing competitive pressures, primarily in wholesale markets,
as a result of consumer demands, technological advances, greater availability and lower priced
natural gas and other factors. A number of countries and markets, including states or power
markets within the United States, have or are considering or implementing methods to
introduce and promote retail competition. To the extent competitive pressures increase and the
pricing and sale of electricity assume more characteristics of a commodity business, the
economics of independent power generation projects in which the Fund may invest may come
under increasing pressure. Deregulation is driving the current trend toward consolidation
among domestic utilities, but also the disaggregation of many vertically integrated utilities into
separate generation, transmission and distribution businesses. As a result, additional significant
competitors could become active in the independent power industry. In addition, independent
power producers may find it increasingly difficult to negotiate long-term power sales
agreements with solvent utilities, which may affect the profitability and financial stability of
independent power projects.
There can be no assurance that (i) existing regulations applicable to electric utility portfolio
companies will not be revised or reinterpreted; (ii) new laws and regulations will not be adopted
or become applicable to electric utility companies; (iii) the technology and equipment selected
by such companies to comply with current and future regulatory requirements will meet such
requirements; (iv) such companies’ business and financial conditions will not be materially and
adversely affected by such future changes in, or reinterpretation of, laws and regulations
(including the possible loss of exemptions from laws and regulations) or any failure to comply
with such current and future laws and regulations; or (v) regulatory agencies or other third
parties will not bring enforcement actions in which they disagree with regulatory decisions made
by other regulatory agencies. Additionally, there can be no assurance that legislation and
regulation favourable to the renewable energy industry will continue to be put into place.
Changes in the tax law could impact certain tax benefits currently enjoyed by companies
engaged in renewable energy and carbon reduction.
vii.
Political and Regulatory Risk: Foreign investment in certain countries may be restricted or
controlled to varying degrees. Such restrictions or controls may limit the types of investments
the Fund can make, limit them by reference to the nationality or legal status of the investor
entity or qualify the nature of ownership interests that can be acquired. Other restrictions may
include limitation on sectors of a country’s economy that are available for foreign investment or
cap ownership levels in various ways. Such restrictions may also increase the costs and expenses
of the Fund in making and administering such investments. Certain regulations may require the
Fund to incur additional costs or lengthy delays in connection with an investment. In addition,
governmental regulations are not predictable and the General Partner, the Manager and/or the
Fund may be subject to political, economic, social and/or market developments. Remittance of
income and capital gains generated by investments by the Fund in certain countries may be
dependent on the absence of foreign exchange controls that would otherwise inhibit or prevent
the repatriation of such income or gains and the Fund could be adversely affected by delays in,
or refusal to grant, any required approvals for the repatriation of capital, profit and dividends
paid on investments held by the Fund. A change in the US government following the recent
election may also see a change in governmental policies which could impact the renewable
energy sector.
viii.
Development Risk: This is the risk that the required contracts, planning and permitting approvals
that are required to bring a project to ‘shovel ready’ status (i.e. ready to commence
construction) are not received. This may include local or state, environmental, noise and other
required approvals and permits, interconnection approvals, utility or customer sales contracts
or any required renewable or energy policy accreditation.
ix.
Capital/Construction Cost Risk: This is the risk of cost over-run in the capital budget to construct
an asset primarily but also includes the risk of permanent increases in the long-term costs of
operations and maintenance of a project. This is generally a ‘controllable risk’. For construction
costs, the Fund will typically invest only where such costs can be reasonably fixed or capped.
The cost over-run risk is usually shifted in large part to the contractor and supported by a variety
of retentions, guarantees or other forms of credit support to cover any additional costs.
x.
Production Risk: The risk of achieving expected energy output is a common risk with any energy
supply project. The Fund focuses only on commercially proven technologies with operating
histories. Depending upon the particular energy technology, estimation of expected production
is a top priority in the due diligence phase. This may involve a detailed assessment of solar
irradiation in a given location, average wind speeds, thermal plant availability and outage
allowances, fuel availability and interruption allowances, etc.
xi.
Operational and Technical Risk: Investments in infrastructure assets may be subject to
operational and technical risks, including risk of mechanical breakdown, failure to perform
according to design specifications, labor and other work interruptions and other unanticipated
events that adversely affect operations. There can be no assurance that any or all such risk can
be mitigated. An operating failure may lead to loss of a license, concession or contract on which
a portfolio investment may depend. The long-term profitability of an infrastructure project, once
constructed, is partly dependent upon efficient operation and maintenance of the project.
Inefficient operations and maintenance and, in certain infrastructure sectors, latent defects in
acquired infrastructure assets, may adversely affect the returns of the Partnership.
xii.
Price Volatility: Many low-carbon and renewable projects will supply and sell two separate
commercial products. Firstly, energy in the form of electricity and/or steam and heat and
secondly, a financial asset in the form of either tax credits, environmental credits or premium
pricing under a fixed price off-take contract such as a Feed in Tariff. The latter mechanism often
features fixed pricing over periods of 10 years or more and is not ordinarily volatile except for
the risk of retrospective regulatory change. Investments in deregulated energy markets
featuring market-based pricing of energy and environmental credits and are more volatile by
nature. That volatility can generate both higher and lower prices over time, directly impacting
project revenues. Most often there are ‘spot’ markets acting as short-term price discovery
mechanisms overlaid by a bilateral contracting market. The short- and longer-term uncertainty
of ‘spot’ market prices can be mitigated by entering into medium to longer term contracts with
buyers seeking the same objective in creating price certainty. These contracts are often referred
to as ‘PPAs’, ‘off-take’ agreements and/or price and volume hedge contracts. Long term PPAs
are increasingly difficult to secure in the energy markets of the US and Australia in particular.
Accordingly, there is a greater exposure to variable market prices often referred to as ‘merchant’
price exposure for at least some portion of the revenue stream.
xiii.
Counterparty/Buyer Risk: This risk issue relates to the analysis of default and solvency risk of the
buyers under sales contracts but also includes that of partners and co-investors in the project
and most importantly, suppliers such as fuel providers. Fortunately, in the power generation
sector, most often the buyer counterparties or customers are energy utilities who are entities
with strong financial capacity and of investment grade rating. Accordingly, this is not usually a
major risk concern for most investments. For Feed-in Tariff based projects, the counterparty risk
is really the risk of retrospective regulatory change as revenues are regulated over the long term.
For partners and co-investors, customary credit investigation is the usual method used to
mitigate this risk and on occasion, credit support may be necessary in the form of guarantees or
letters of credit etc. to support certain obligations such as capital calls into a joint venture
operation. More importantly, for projects such as biomass, waste to energy and co-generation
plants for example, counterparty risk is often more acute in so far as the fuel supplier is
concerned.
xiv.
US Gas Market: In recent years, natural gas prices have been depressed in the United States due
to the development of significant quantities from shale resources, which has negatively
impacted power prices and therefore the financial value of both existing and proposed energy
supply assets and projects, including certain gas-fired power generation projects and renewable
energy projects. There can be no certainty regarding the future pricing of natural gas in the US
market and the impact it may have on the relative competitiveness of any existing or proposed
low-carbon or renewable energy project. This may have a material and adverse impact on
project investments made by the Fund in the US market and/or make it difficult for the Manager
to identify investment opportunities that satisfy the Fund’s investment criteria.
xv.
Increased Competition: In recent years, there has been a material increase in the number of
investment funds seeking investment capital commitments from institutional investors
allocating to the infrastructure sector across the board in various sectors. As a consequence, the
Manager is likely to face increased competition from other investment fund managers
promoting similar investment funds to the same investor audience that the Manager is seeking
to market the Fund. This may result in the Fund not achieving its target level of investor
commitments or not raising any commitments at all. It may also make it more difficult for the
Manager to source investment opportunities at the expected rate of return as a result for a
greater competition from other investment funds pursuing the same or similar opportunities.
xvi. Brexit: The United Kingdom (“UK”) left the European Union in January 2020. Negotiations of the
terms of the withdrawal during this transition period, which will end 31 December 2020, are
ongoing and complex. This withdrawal may damage the UK economy, the financial system, and
UK based financial firms such as Quinbrook. It is not possible to ascertain the precise impact
these events may have on Advisory Clients or the Adviser from an economic, financial or
regulatory perspective but any such impact could have material consequences for Advisory
Clients.
xvii. Business, Terrorism and Catastrophe Risks: Clients will be subject to the risk of loss arising from
exposure that it may incur, indirectly, due to the occurrence of various events, including
hurricanes, earthquakes, and other natural disasters, terrorism and other catastrophic events
such as a pandemic. These catastrophic risks of loss can be substantial and could have a material
adverse effect on Quinbrook’s business and Clients’ portfolios including investments made by
Quinbrook.
The Firm also assists the Manager in marketing private funds to potential investors. The risks specific
to each of these products can be found in the Private Placement Memorandum for that product.
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The Firm is affiliated with:
Quinbrook Infrastructure Partners (GP1) Limited, the General Partner of the Fund and Co-Investment Funds,
registered with the Jersey Financial Services Commission.
Quinbrook Infrastructure Partners (Jersey) Limited, the Investment Manager of the Fund and Co-Investment
Funds, registered with the Jersey Financial Services Commission.
Quinbrook Infrastructure Partners Limited, Exempt Reporting Adviser, another sub-adviser to the Fund and
Co-Investment Funds, registered with the UK Financial Conduct Authority.
Quinbrook Infrastructure Partners Pty Limited, Exempt Reporting Adviser, another sub-adviser to the Fund
and Co-Investment Funds, registered with the Australian Securities and Investments Commission.
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Trading
A. Code of Ethics
The Quinbrook group makes every effort to foster a culture of compliance throughout its operations,
including the activities of the Firm. The Firm expects its officers, and personnel to comply with all
applicable laws and regulations and to act in accordance with high ethical standards in matters with
competitors, counterparties, regulators, and those who do business with or seek to do business with
entities within the Quinbrook group.
The Firm abides by the Code of Ethics of the Quinbrook Group, which is provided to all new
employees on joining the Firm as part of the Staff Handbook. This requires that personnel comply
with their regulatory requirements, meet the fiduciary obligations to Quinbrook funds and investors
in those funds, and adhere to certain business ethics and principles. All new hires are required to
acknowledge their receipt of the Staff Handbook and the Compliance Policies and Procedures
Manual, their understanding of the provisions contained in these documents, and their agreement
to abide by the principles, policies and procedures set forth therein. The Quinbrook Code of Ethics
contains provisions for:
• Identification and handling of material non-public information;
• Prevention of insider dealing; and
• Reporting and pre-clearance of:
o personal account dealings;
o gifts and entertainment; and
o outside business activities
The Quinbrook personal trading policies generally prohibit personnel from buying or selling certain
securities within the power, energy, utilities and related sectors. The Firm’s personnel are also
required to disclose all outside business activities. In the event an outside business activity presents
a material conflict of interest with the funds advised by Quinbrook, Quinbrook reserves the right to
restrict these outside business activities.
In addition, the Quinbrook group requires its employees, among other things, to:
• Act in an ethical manner with the public, investors, and prospective investors;
• Place the interests of the funds and fund investors above their own personal interests;
• Attempt to avoid actual or potential material conflicts of interest;
• Use reasonable care and diligence, and exercise independent professional judgment when
conducting investment analysis, making investment recommendations, and engaging in
other professional activities; and
• Comply with applicable laws and regulations in the jurisdictions in which Quinbrook
operates.
A copy of the Firm’s Code of Ethics can be provided to its Clients or potential Clients on request at
[email protected].
B. Recommendations Involving Material Financial Interests
The Firm abides by the Quinbrook Global Deal Allocation Policy and the Quinbrook Compliance
Policies and Procedures Manual which contains the group policy on conflicts of interest. The primary
principle is the fiduciary duty to investors. The Firm’s advisory Client is also bound by this policy.
Where conflicts of interests arise, the Group Audit, Risk and Compliance Committee will decide
whether to manage the conflict, or to decline to act.
C. Investing Personal Money in the Same Securities as Clients
Certain of the Firm’s supervised persons are entitled to participate in the group’s carried interest
plan. Once offered the opportunity, participation is at the discretion of the supervised person.
Participation is not considered to create a conflict of interest for two reasons; i) that participation
generally results in alignment of interests with investors; and ii) that the investment advice provided
by the Firm to the Manager can be accepted or rejected at the Manager’s sole discretion.
D. Trading Securities At/Around the Same Time as Client’s Securities
The assets and securities in which the Quinbrook funds invest are not publicly traded and each
investment transaction is executed at a single price with a single set of terms, regardless of which
of Quinbrook’s funds, including those with carried interest plans, are participating.
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A. Factors Used to Select Broker-Dealers
The Fund and Co-Invest invest directly into infrastructure assets, and the Firm provides investment
advice relating to such assets, having no requirement for the services of a broker-dealer.
B. Aggregating (Block) Trading for Multiple Client Accounts
The Firm currently only has one direct client, the Investment Manager, and therefore
does not aggregate trades for multiple client accounts. Any investment assets acquired
or funded by multiple investment vehicles are held by those vehicles in proportion to
the amounts actually contributed and in accordance with the co-investment
agreements between them.Item 13 Review of Accounts
A. Frequency and Nature of Periodic Reviews and Who Makes Those Reviews
The Firm does not review the Manager’s financial plans. The Investment Advisory Agreement
governing the relationship gives full discretion to the Manager in accepting or rejecting the
investment advice provided by the Firm. The Firm will provide ongoing monitoring services in respect
of the investments it recommends which are accepted by the Manager. The Manager will periodically
review the information provided to it in respect of this monitoring activity.
B. Factors that will Trigger a Non-Periodic Review of Client Accounts
Given the nature of the advisory business, the Firm generally only reviews Client Accounts on a
periodic basis.
C. Content and Frequency of Regular Reports Provided to Clients
The reports issued to the Manager in respect of its managed assets are produced by the Fund via its
administrators, rather than the Firm.
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A. Economic Benefits Provided by Third Parties for Advice Rendered to Clients
No third parties provide benefit to the Firm for advice rendered to its Client.
B. Compensation to Non-Advisory Personnel for Client Referrals
Although there is currently a single Client, The Firm is not precluded from advising others in the
future. These are likely to be other Quinbrook group entities, and as such no referral fees will arise.
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The Firm does not take physical custody of client funds or securities. All Client assets are held in custody by
unaffiliated broker/dealers or banks, however the Firm may have access to client accounts since it or an
affiliate serves as the Investment Manager or General Partner of Private Funds. The Private Funds are subject
to an annual audit and the audited financial statements are distributed within 120 days of fiscal year end to
each limited partner (or member or owner).
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The Firm does not have discretion to manage securities accounts on behalf of clients. The Firm does assist in
arranging investment transactions where the Manager accepts the investment recommendation.
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Due to the investment strategies of the Fund and the Co-Invest and the nature of the Firm’s advisory services
the Firm does not anticipate having authority to vote client securities.
The Firm generally does not participate in class action settlements on behalf of clients or Funds to which it
acts as sub-adviser.
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No prepaid fees are solicited more than 6 months in advance, the Firm has never filed for bankruptcy and it
is not aware of any financial condition that is likely to impair its ability to provide services to clients.
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