open briefing, page-4

fees paid to aln Alan Kohler reckons the performance fees paid to ALN are over the top, and rising bond yields are pushing down Infra stock prices.
however it is a 2 way street, AIH has first choice of any ALN offerings and underperformance will be punished by the market. It all comes down to a question of performance. here is quote;
"The one that is out of line is Alinta Infrastructure Holdings (AIH). Alinta charges its infrastructure fund as follows: a base fee rising to 1 per cent of market capitalisation, plus 20 per cent of any outperformance against the S&P/ASX 200 Accumulation Index, plus 3 per cent of gross revenue, paid monthly. Plus, Alinta actually has the nerve to charge AIH for services rendered (at cost).

I think we can confidently say that this is the high watermark of the infrastructure bubble. Alinta's particular entry in the Guinness Book of Fee Records is the 3 per cent of revenue, in addition to charging for services provided. No one else does that.

This, presumably, is why Alinta can afford to overpay for AGL — just stick the assets into AIH and almost any level of debt can be serviced by the fees.

Meanwhile bond yields are beginning to rise, and the bond bears are rousing themselves again and mournfully ringing the bells for the Beginning of the End.

Ten years of falling bond yields have supported all asset values, with the infrastructure boom perhaps the most extreme manifestation.

If it's true, as some are saying, that we are in for a longish period of rising bond yields, then infrastructure fund promoters such as Macquarie and Babcock & Brown will struggle to get another dollar of performance fees for years, since these are tied to share price. The funds themselves will be fine, because most debt has fixed interest rates and income tends to be on long-term, inflation-linked contracts, but the value of fund equity will tend to decline as discount rates increase with bond yields.

Alinta, of course, will keep getting its 3 per cent of revenue no matter what happens to the price of AIH; even better if it's 3 per cent of AGL's infrastructure revenue as well.