What Are We Doing?
Opposing the hostile takeover of Liberty Apple Valley
There is a reason private investors such as the Carlyle Group are busy buying and selling water systems: Public infrastructure is big business.
According to a recent Los Angeles Times story, private equity firms raised $32.4 billion in funds in 2014 for infrastructure opportunities – a huge increase from the $3.6 billion they raised in 2005. These private investors typically require annual profits of 12 percent to 15 percent, usually at the expense of rate payers.
In the case of the Apple Valley Water System, flipping such an investment is lucrative as well. The $257 million net price Algonquin Power & Utilities has agreed to pay to Carlyle for its three water systems is more than double the $102.2 million Carlyle itself paid for the systems in 2011.
There is a reason Algonquin and others want in on the action: They see money – and plenty of it – to be made off the backs of ratepayers.