Macquarie Group may rake in $1.3bn in performance fees on AirTrunk sale, valuations in focus

Macquarie’s stellar $24bn divestment of AirTrunk could deliver it hefty performance fees and stoke further demand for digital infrastructure assets.

AirTrunk founder Robin Khuda with Macquarie Group CEO Shemara Wikramanayake. Picture: AirTrunk

Macquarie Group’s stellar $24bn divestment of AirTrunk may deliver it hefty performance fees as high as $1.3bn and stoke further demand for digital infrastructure assets, if lofty valuations don’t put them out of reach.

While difficult to estimate, given Macquarie’s 60 per cent holding in AirTrunk was held via its second Asia-Pacific Infrastructure Fund, bank analysts expect Macquarie will enjoy a huge payday on the AirTrunk sale to Blackstone and Canada Pension Plan Investment Board.

The transaction, worth more than $24bn and announced late on Wednesday, included capital expenditure for committed AirTrunk projects. Macquarie’s fund and PSP Investments will reap huge gains on their 2020 investment in AirTrunk, which at the time valued the company at just $3bn.

AirTrunk came onto Macquarie’s radar several years ahead of it snapping up the ­assets.

“We were very focused, obviously, on making sure that we were creating value in this asset for our investors. So, the last five years have been very intensive in terms of doing that,” said Ani Satchcroft, co-head of Asia Pacific infrastructure in Macquarie Asset Management.

“In terms of … the go forward, it’s looking for the next opportunity that fits the same requirements. So where can we add value, over and above just providing capital, but also in terms of expertise and active asset management.”

Ms Satchcroft wouldn’t comment on the fees Macquarie might earn from the sale of AirTrunk, which ranks among the five biggest acquisitions of an Australian target.

Macquarie’s shares climbed 1.3 per cent to $219.96 on Thursday, outpacing a 0.4 per cent gain in the S&P/ASX200, as investors digested details of the AirTrunk sale and what it means for the asset manager and investment bank’s earnings.

Given the bumper AirTrunk sale price the vendors secured, MST Marquee analyst Brian Johnson raised his expectations on the potential performance fee Macquarie may rake in.

“It’s impossible to quantify exactly what that implies as a performance fee for MAIF2, given we do not know subsequent AirTrunk capex/regearing, but we suspect a figure around the $1.3bn could not be far off the mark,” he said. “The sheer size of the AirTrunk realisation is a strong signal that global capital velocity has resumed apace for Macquarie.”

JPMorgan analyst Andrew Triggs said while estimating a performance fee on the sale of AirTrunk for the Macquarie fund was difficult, he ascribed a potential fee range of $1bn to $1.3bn, booked across financial years 2026 to 2028.

“Further data centre sales should occur over coming years, suggesting a strong medium-term outlook for performance fees,” he added.

Other data centre assets held via Macquarie funds include an investment in Bohao Internet Data Services, a hyperscale data centre developer and operator in China, and Netrality Data Centers in the US.

Asked about bulging valuations in data centre transactions around the world, Ms Satchcroft said: “It’s hard to make a broadbrush statement as to whether we would or wouldn’t invest (further) in the (data centre) sector.

“We do have other data centre investments across (the Asia-Pacific region), and the assessment is specific to the company.”

She said the fun part of her job was thinking about and identifying the next exciting investment area within the infrastructure asset class: “Where are there community needs that aren’t currently being met, that we can meet both through capital and expertise.”

“Our strength is not just piling in where there’s a lot of people already investing; we do like actually trying to find where the white space is,” she said.

While Macquarie has had a positive outcome on AirTrunk, its investment in Nuix caused the company a lot of grief after the analytics and intelligence software group missed prospectus forecasts in 2021 and effectively shut the window for initial public offerings in Australia.

Macquarie and PSP briefly considered listing AirTrunk before opting instead for a trade sale, where they believed a better outcome would be delivered.

The sale of AirTrunk was dubbed project Amidala, with the Macquarie and PSP camps drawing on the Star Wars character Queen Amidala for the moniker. The code name was so popular that Blackstone’s team also took it on as its own.

The Blackstone camp outbid a rival bidding consortium that included Global Infrastructure Partners, Silver Lake and IFM Investors to win the AirTrunk ­auction.

The transaction requires Foreign Investment Review Board approval, but Blackstone has been through the process before, including when it completed the acquisition of Crown Resorts in 2022.

Blackstone sees upside in expanding AirTrunk’s data centre portfolio in the region, including India and South Korea.

AirTrunk operates 11 data centres across the Asia-Pacific, including three in Sydney and one in Melbourne.

It has one centre in Malaysia, three in Hong Kong, two in Japan and one in Singapore.