From online investment newletter Eureka Report:

Former AFL star and Rhodes Scholar-turned-businessman Mike Fitzpatrick
– who picked the infrastructure boom early with his Hastings Funds
Management – has some real reservations about the current state of the
infrastructure industry.

who reportedly made about $36 million when he sold Hastings to Westpac
and now runs the low-key investment operation Treasury Group Ltd, says
in today’s Eureka Report that while there are ” various risks” to the
infrastructure sector at the moment, they are overstated. If there are
risks, he says, they lie in the “very detailed structuring or financial
engineering in some of the transactions and I think it is possible that
some of those heavily structured deals might get into trouble.”

for the leader in the field, Macquarie Bank, Fitzpatrick says Macquarie
is “not in my portfolio at the moment,” but has “a lot more depth and
have been at the game a lot longer” than its chief competitor Babcock
& Brown .

He describes Macquarie as a “Westfield-type
model” who, while they gear the assets aggressively, ” fundamentally
the funds are equity and so I think what you would see would not so
much be the fund blowing up but just, if they got into difficulty, the
funds would have a fall in value and that’s the issue, I think. ” An
increase in real interest rates could “start to knock them back a bit
and the question is whether the predators will leave them alone,” says
Fitzpatrick. “I think the difficulty here is: when the fund gets to a
certain size, can it keep performing? And will investors continue to
tolerate that fee level?”