Core assets are driving the majority of co-investment opportunities alongside Macquarie Infrastructure and Real Assets funds, according to senior managing director Phil Peters.
Peters, global head of MIRA’s investor solutions group, said at Infrastructure Investor’s Global Summit in Berlin that core assets are a “very strong” part of the firm’s co-investment business. “What we see is investors prepared to take outsized exposures to those core assets, albeit in a slightly risker format by virtue of the co-investment piece,” he added.
MIRA, part of Sydney-based Macquarie Group, managed A$133 billion ($105 billion; €85 billion) in assets as of last December and has deployed A$10 billion of co-investment capital in the past 12 months alone.
The firm is currently fundraising several vehicles including its second Asia infrastructure fund, which has raised at least $2.96 billion of its $3.25 billion target, according to an SEC filing. It’s also raising what’s been dubbed a “super core” fund, which is thought to be raising an initial €1.5 billion to target regulated assets across Europe.
According to a survey published in December by placement agent and advisor Asante Capital Group, limited partners are increasingly considering investing with fund managers on a deal-by-deal basis. Fifty-four percent of 112 LPs that took part in the survey said they would consider making co-investments alongside a “deal-by-deal manager”.
Ryan Bisch, private market director at Canadian state-owned utility Ontario Power Generation, added at the Global Summit that co-investment opportunities were “a good way to accelerate deployment of capital”. However, he said OPG’s co-investments normally target higher-risk, higher-return assets.
“We don’t really have a lot of core-focused money out there,” Bisch said. “From our perspective, when a GP is targeting a value-add or higher-risk-and-return, core-plus-type strategy, they generally want control and may be bidding or looking to acquire the asset 100 percent, so they may need more capital”.