Macquarie pushes ahead

January 09, 2008

George Lekakis - Herald Sun

WHILE the liquidity crisis paralyses major equity raisings worldwide, Macquarie Group is pressing ahead with plans to raise billions for new infrastructure vehicles.

Sources close to the Sydney-based investment bank confirmed yesterday that it had almost completed raising $US11 billion ($A12.5 billion) to fund acquisitions for its unlisted Macquarie European Infrastructure Fund III.

But news of the aggressive expansion came as investors continued to sell off Macquarie's ASX-listed scrip.

As fears intensified in the market that the United States economy may be in recession, Macquarie Group shares fell 89 to $70.50.

Macquarie's share price has slid 13 per cent from $82 since early December.

The new European fund has been established following the success of two other European infrastructure vehicles that now own assets worth in excess of $US10 billion.

Macquarie launched its first European infrastructure fund in October 2003 with the purchase of a water utility company in southern England.

Since then it has acquired other assets in the European Union through a second fund launched in 2005.

Investment in the European infrastructure sector has undergone a boom in the past five years as more EU governments have embarked on programs to sell state-owned assets.

The completion of the ambitious equity raising shows that Macquarie is still able to fund big infrastructure initiatives despite the tightening of global investment markets.

Moreover, the group is also stepping up its activities in the US, with the launch of another private infrastructure fund.

According to a report in The Wall Street Journal, Macquarie is seeking to raise $US6 billion for its New York-based Macquarie Infrastructure Partners II.

The foundation MIP vehicle is a diversified unlisted fund focusing on infrastructure investments in the US and Canada.

The MIP fund's investments include a majority stake in Aquarion, a regulated water utility operating in Connecticut, Massachusetts and New York.

The fund also owns 50 per cent of Macquarie Infrastructure Group's interests in four US toll roads.