Home ListingJune 19, 2015

Australian Funds Settle Dispute Over Airport Stake

Two of the country’s biggest asset owners have ended a legal battle over the valuation of Perth Airport.

Reported by Featured Author

Australia’s sovereign wealth fund has settled a legal battle with the country’s biggest superannuation fund concerning the valuation of Perth Airport.

The A$90 billion (US$69.8 billion) superannuation fund had accused Future Fund of inflating the amount it paid in 2012 to secure its 29.7% stake in the airport’s holding company, pricing other investors out of the deal. Local reports said AustralianSuper had claimed to have lost out on as much as A$33.5 million.

“AustralianSuper is pleased that its resolve to protect its members and maintain high standards has resulted in a settlement that improves the returns for members.”The Future Fund this week agreed to pay AustralianSuper A$7 million to end the three-year case, but did not admit any liability. Instead a spokesperson told Investment Magazine that it had “chosen to settle the lawsuit for purely commercial reasons.”

The spokesperson added that Future Fund “has always maintained that it has acted appropriately and properly at all times.”

In a statement on its website, AustralianSuper said it was “very pleased” with the settlement. The majority of the money “will compensate members for the losses that AustralianSuper says it incurred as a result of Future Fund’s conduct.” The rest of the settlement covered the fund’s legal costs.

“AustralianSuper will always robustly defend its members’ rights, insist on appropriate transparency in all its commercial dealings, and promote high standards of corporate behaviour,” the statement said. “AustralianSuper is pleased that its resolve to protect its members and maintain those high standards has resulted in a settlement that improves the returns for members.”

AustralianSuper owns a 5% stake in Perth Airport Development Group. Future Fund bought its stake in the company as part of a A$2 billion deal in 2012 with the Australian Infrastructure Fund to purchase a number of assets.