Macquarie Group to tap investors for $US5bn as it plots fourth Asia-Pacific infra fund

Macquarie is kickstarting a fundraising drive for its fourth Asia-Pacific infrastructure fund as it seeks to capitalise on positive investor sentiment from bumper asset sales.

Investor sources said Macquarie was aiming to raise about $US5bn for its latest Asia-Pacific infrastructure fund. Picture: Ian Waldie/Bloomberg

Macquarie Group is kickstarting a fundraising drive for its fourth Asia-Pacific infrastructure fund in an attempt to attract about $US5bn ($7.4bn) and capitalise on positive investor sentiment from bumper fund asset sales including AirTrunk, investor sources say.

The latest raising efforts will start in earnest in coming weeks given investor meetings with Macquarie staff are being lined up, sources with knowledge of the situation told The Australian.

It’s understood Macquarie’s third Asia-Pacific infrastructure fund is about 80 per cent committed, shifting the focus to the next investment vehicle in the regional series.

A Macquarie spokeswoman declined to comment.

The fresh raising sees Macquarie seeking to benefit from positive sentiment following its divestment from data centre business AirTrunk, alongside PSP Investments, in a mammoth $24bn deal announced last month.

Macquarie’s 60 per cent holding in AirTrunk was held via its second Asia-Pacific Infrastructure Fund and banking analysts have estimated the group may reap performance fees as high as $1.3bn from the sale.

Macquarie and PSP invested in AirTrunk in 2020 at a valuation of $3bn, underscoring a huge return on the asset despite the duo tipping in notable amounts to help fund the data centre operator’s capital investment and expansion.

Macquarie’s latest fund — which focuses on investing across infrastructure assets in the Asia-Pacific region — comes after global players including KKR and Stonepeak separately ruled off raisings for regional investment funds earlier this year.

Stonepeak’s Asia infrastructure fund, the firm’s first dedicated strategy in the region, attracted $US3.3bn in capital commitments, while KKR had a final close of $US6.4bn for its second Asia-Pacific infrastructure fund.

Macquarie’s chief executive Shemara Wikramanayake last month said the group was seeing green shoots in infrastructure deal volumes as central banks around the world began reducing borrowing rates.

Airtrunk founder and CEO Robin Khuda with Macquarie Group CEO Shemara Wikramanayake. Picture: Supplied

“Our asset management team are saying that, from having seen a deal a month, it’s picked up to a deal a week and they are deploying more capital,” she said at the time.

But, that followed a difficult period for fundraising when interest rates were at their peak and average timelines for raisings swelled to 30 months from 17 months, Ms Wikramanayake added.

While Macquarie earns 66 per cent of its total income from outside Australia, Asia makes the smallest contribution to earnings. The Americas and Australia separately account for 34 per cent each of Macquarie’s income, while Europe, the Middle East and Africa is at 23 per cent and Asia just 9 per cent.

Still, Macquarie has seen strong demand for its Asia-Pacific infrastructure funds. The asset management unit ruled off its third Asia-Pacific infrastructure fund with more than $US4.2bn in investor commitments in May 2022, exceeding a $US3bn target.

That fund housed a string of co-investments including in Bohao Internet Data Services in China, Vocus Group and Bingo Industries in Australia, Summit Energy Alliance Limited in South Korea and Bersama Digital Infrastructure in Indonesia.

Macquarie has had success with investments such as AirTrunk within its infrastructure funds, but other assets such as waste group Bingo have proven more troublesome. In 2022, Bingo entered guilty pleas to criminal cartel offences for price fixing relating to demolition waste services in Sydney.

Macquarie is understood to have a handful of assets remaining in its second Asia-Pacific infrastructure fund, the same vehicle which housed the AirTrunk investment.

That fund also made investments including in toll roads, renewables and petrochemical storage assets spanning India, the Philippines, Singapore and China.

Macquarie’s asset management arm has to balance operational considerations with the climate for selling assets, as it looks to offload and buy assets for its stable of investment funds.

Potential investors would closely scrutinise Macquarie’s track record of returns across its infrastructure funds.

Earlier this year Macquarie announced it had raised more than €8bn for its seventh fund in the European infrastructure series, saying the investment vehicle was the industry’s largest-ever fund focused on infrastructure through the continent.

A large proportion of the capital raised is understood to have come from Asian investors, while Macquarie has said about 92 per cent of fund commitments for the latest in the European series came from investors who had previously invested with the group’s asset management division.

The European series of infrastructure funds were started well ahead of the Asia-Pacific series, where the first fund was ruled off in 2016 with commitments of $US3.1bn.

The first Asia-Pacific Macquarie infrastructure fund accounted for 36 per cent of the aggregate capital raised by Asia-focused funds in 2016, according to a PwC report.

Macquarie’s latest earnings update showed the group’s assets under management fell 2 per cent to $915bn in the June quarter compared to the three months ended March 31.

Of that amount, assets under management in private markets dipped 1 per cent to $366.8bn, while in public markets assets there was also a decline to $548.2bn.

Originally published as Macquarie Group to tap investors for $US5bn as it plots fourth Asia-Pacific infra fund