The sale price of $6 a Z share was lower than expected, but Infratil now had about $750 million in cash to invest or return to shareholders.
''The logical conclusion is that Infratil is poised to reinvest the cash into an alternative investment and that is the driver of the sell-down.''
Where Infratil reinvested its cash was of key interest but in the meantime, the Wellington-based company appeared ''fairly valued'' relative to other opportunities in the market, she said.
Trustpower dominated Infratil's asset base and was about 42% of its assets.
The next largest asset was Wellington International Airport, at about 19%.
Movements in Trustpower's share price had the greatest impact on Infratil.
''Infratil is targeting double-digit dividend growth for the next few years. Trustpower is critical to meeting that goal and while Trustpower has the ability to pay increased dividends over time, it currently has high debt levels.''
Infratil paid a management fee of nearly $20 million a year based on the value of the underlying assets, which was about 20% for Infratil.
The main positive catalyst for Trustpower was the ability to develop Australian wind farms, which could add 25 cents per share to 50 cents per share to Trustpower and equate to up to 14 cents per share for Infratil.
''Infratil's sale of Z has provided it with a significant war chest which we expect it will reinvest.
''In order to continue paying an increasing dividend, we expect Infratil will be targeting high-yielding investments as opposed to high-growth, low-yield investments.''
Infratil launched a bond issue on Wednesday to raise as much as $150million as it considered buying Australian renewable energy firm Pacific Hydro.
Ms Kinnaird said while Infratil had returned, through a special dividend, $120million to investors in the 2015 financial year, there was the potential to return more - most probably through buybacks - if Infratil was unable to find suitable investments for the capital.
The NZ Bus contracts in Auckland and Wellington were due to be tendered in the coming year or so.
If NZ Bus was unable to successfully retain its route contracts, the business would be worth less.
However, Forsyth Barr believed NZ Bus was in a strong position to renew its contracts given the strategic locations of its bus depots which would be hard for any potential competitor to replicate, Ms Kinnaird said.
