Macquarie Infrastructure and Real Assets may have come close to slipping to second place last year, but it has again widened the gap with Global Infrastructure Partners to remain at number one for the ninth consecutive year, and ever since Infrastructure Investor launched this ranking in 2012.
“Sometimes people measure their success on how large their assets under management are, but I think that’s too simplistic,” Martin Stanley, head of Macquarie Asset Management, of which MIRA is a part, tells Infrastructure Investor.
“There are a number of other factors that I think are really important and the amount of assets you end up managing are consequences of these,” he adds. “The key one, of course, to remember is that we are here only by the grace of our clients.”
For Macquarie, keeping clients happy has meant sticking to its strategy.
“We took the view some time ago that we would try to build strategies around people that were on the ground in markets that we understood,” Stanley explains. “As a result, the business has grown over the last 25 years or so, around strong regional hubs, with people who know the markets in which they’re investing.”
Another element of Macquarie’s strategy is staying loyal to its mid-market mandate.
The Arkansas Teacher Retirement System, which in June committed $50 million to Macquarie’s latest North America-focused fund, Macquarie Infrastructure Partners V, cited that explicitly as a key selling point. MIP V is targeting $5 billion, the same amount that was raised by its predecessor.
The North Dakota State Investment Board, which in May was considering a $100 million commitment to MIP V, noted that “MIP IV’s early returns have been encouraging despite the recent market downturn, given its defensive approach to GDP-sensitive infrastructure investments”.
Speaking of market downturns, Stanley says the firm’s portfolio, which comprises more than 150 businesses around the world, “has been extremely resilient”.
He acknowledges that a handful of assets have faced challenges as a result of the covid-induced crisis, but says the bulk of the firm’s infrastructure portfolio has stood up well. Stanley attributes this resilience in part to portfolio construction.
“Some of this is deliberate planning,” he says, noting that while the firm was not preparing for a pandemic it was planning for a downturn given the long expansionary cycle that had preceded the covid-19 outbreak. “But some of it is also good fortune.”
He notes that MIRA had reduced its exposure to the aviation sector before the pandemic. In March 2019, it sold its 36 percent stake in Brussels Airport to a consortium comprising QIC, APG and Swiss Life.
Although covid has led to economic pain across a number of sectors, it has also accelerated some positive trends. “The drive towards greater diversity and inclusion in the workforce is going to only be helped by the fact that people can now see that working from home or working remotely is actually practical and in many cases, desirable,” he says.
Climate change has also returned firmly to the corporate agenda after suffering a slight setback when the pandemic first hit.
“What has been pleasing to see is that as people have come to grips, to a certain extent, with the challenges posed by the pandemic,” Stanley says. “Climate change has come back to the fore. Given the scale of the challenge ahead of us, I think it’s really important that it does so.”
In addition to focusing on the fight against climate change, he believes institutional investors and asset managers such as MIRA also “have a huge responsibility to help the reconstruction of communities and economies during and following the pandemic.
“Responsible asset management is critically important and we’re committed to making sure that we are playing our part there. If possible, we also want to lead in areas where we have the necessary expertise.”
Photo credit: Marcus Rose