Performance

The increased volatility and marked slowdown in global financial markets impacted UTA's annual result. UTA achieved a return for the full financial year of 3.37 percent against its benchmark of 8.95 percent. Whilst disappointing not to achieve benchmark, it was pleasing to achieve a positive return in such a difficult economic environment.

The key factors influencing UTA's return were:

 - reduced volume forecasts for transport sector assets (Perth and Melbourne Airports; HOCHTIEF AirPort Capital; Interlink (Sydney M5 tollroad));

 - increased credit margins payable, or forecast to be payable, to financiers (most assets);

 - deflation in the UK (South East Water);

 - changed operational assumptions, such as reduced pricing assumptions or lower assumed rates of development (Perth and Melbourne Airports; Port of Portland; Envirogen);

 - regulatory outcomes and their impact on fund assets, such as the Australian Energy Regulator's decision of parameters to be used to determine the Weighted Average Cost of Capital in the next regulatory period (ElectraNet); and

 - changed discount rate parameters adopted by UTA's independent valuer, such as an increased market risk premium for US assets and lower risk free rates (most assets).