Ross Israel - Stable, Predictable Cash Flows (EP.53)

Ross Israel is the Head of Global Infrastructure Investments for QIC, Queensland, Australia's 82B AUZ ($62B USD) investment fund. The Queensland government formed QIC in 1991 to oversee its Superannuation Fund, and the business has since evolved into a Global Diversified Alternative Asset Manager. Ross joined QIC in 2006 to create the Global Infrastructure effort and also serves as a member of QIC's Executive Committee. He has a quarter century's worth of experience in corporate finance and infrastructure funds management. Our conversation covers QIC's structure, examples of long duration assets in ports and waterways, crossing knowledge between private and public markets, managing external assets alongside a substantial internal pool, governance structure, compensation and incentives, navigating stakeholders, and opportunities and risks in the space. The subtle differences in constituents and objectives of sovereign wealth funds from other institutional pools come out in the implementation of QIC's investing. It's a topic we'll continue to explore on future shows. Learn More Join Ted's mailing list at CapitalAllocatorsPodcast.com Write a review on iTunes Follow Ted on twitter at @tseides For more episodes go to CapitalAllocatorsPodcast.com/Podcast Show Notes 3:10 – A look at Ross's background 5:58 – QIC and how is it structured 7:32 – Portfolio composition when Ross arrived 9:08 – What was his strategy for putting money to work 10:03 – What was the thinking behind such a concentrated portfolio 11:28 – Port of Brisbane 15:38 – Local vs. global focus 16:58 – Most challenging deal he's done 18:28 – Lessons learned from their investing strategies 20:01 – Structure of their investment decision meetings 22:43 – Why does QIC take on outside capital? 25:27 – How does being part of a government entity play out in the deal dynamics 27:43 – How does decision making work on the fund? 29:06 – What happens if an internally run fund falters? 30:40 – QIC's approach to incentives and compensation 37:13 – What influence do the large pool of funds have on the way they pursue investments 39:06 – How do they think about their objectives 41:30 – What is the competitive landscape for infrastructure investments 44:38 – What are the concerns as they look out on the horizon 47:32 – How do they view public debt 48:54 – Closing Questions