Babcock & Brown said this week that, "in light of global market conditions," it has decided to restructure its business to specialize in infrastructure investment. The decision is the result of a strategic review undertaken earlier this year in an effort to reduce its "excessive debt levels." Existing teams of Babcock employees will manage the company's businesses and assets outside of the infrastructure business until Babcock is successful in selling them off. The company is depending on revenue from such sales to repay its debt. And while it is not planning on this, Babcock said the potential of a strategic investor in the company is not ruled out. “The real estate and operating leasing businesses have quality platforms and assets in their own right and will benefit from orderly sale to investors or existing operators focused on those sectors. We have already had a number of discussions with investors and operators interested in these platforms. These discussions are ongoing,” said CEO Michael Larkin. In the U.S., Babcock manages $1.7 billion of third party assets, comprised of 22 shopping malls in 11 states totaling more than 15 million square feet, through Gregory Greenfield & Associates, a company it acquired in August 2007 for an undisclosed amount. Eight of the malls are owned in a joint venture with Oxford Properties, under which Babcock holds a 51% ownership interest. Also in the U.S., Babcock has a portfolio of multifamily assets comprised of 28,500 apartments in 10 states with an aggregate value of $1.8 billion. This division employs over 800 people. As a result of these strategic changes, Babcock expects to reduce its headcount from 1,600 employees (Jun. 30, 2008) to only 600 in 2010; it currently has 1,450 employees. Further, it expects to reduce operating costs by more than 50% ($150 million+) by the end of 2010 and repay $3.1 billion in corporate debt by 2011. On the infrastructure front, Babcock said it has an extensive development pipeline of wind; thermal and solar power; social infrastructure/ PPP’s; transport; energy transmission and distribution assets.