KEY POINTS:
What is it called and what sort of savings product is it?
Equity Partners Infrastructure Company - or EPIC as it's known - is a company which owns utility company Thames Water in the United Kingdom. Thames Water is the largest water and wastewater services company in
the UK.
Who is the company that is behind it?
The offer is being promoted in New Zealand by Macquarie Equities. However, the asset was bought by a subsidiary of ASX-listed investment bank Macquarie and is now held and run by Equity Partners Infrastructure Management, a New Zealand-based, privately owned asset management firm.
Who is the target market?
The offer is being aimed at higher net worth individuals who want a listed, and defensive investment.
What return does it offer?
EPIC's first year expected dividend yield is 9.10 per cent, which it says is substantially higher than comparable New Zealand listed property trusts, infrastructure companies and regulated utility companies.
When was it launched?
The prospectus and investment statement was registered on April 26.
What other products is it like or is it competing with?
EPIC is up against most other defensive, income assets such as property trusts, infrastructure assets. Plus it could be considered a competitor to other listed debt securities.
Is it long term, short term or medium term?
One would expect to hold this over the medium to long term and provide regular income to a portfolio as well as the possibility of some capital gains.
What is the unique selling point?
One of the two key features being pushed is that this is a tax-effective investment as it will be in portfolio investment entity (PIE) structure. These are the new investment vehicles, which will become common as the year progresses. It also provides some diversification in underlying investments.
How strong a stomach do you need for it?
This has the characteristics of a classic infrastructure in a mature company - established company and cashflows - so mild stomach category.
What's the hitch?
These are around liquidity and the underlying asset itself. There are restrictions on listing and it appears Macquarie will run a secondary market.
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