Korean pension backs Macquarie’s new Aussie fund

The Public Officials Benefit Association of South Korea will invest A$60m in the A$1.5bn vehicle, which is due to reach a second close this month.

The Public Officials Benefit Association of South Korea, a pension fund, has approved a A$60 million ($46 million; €41 million) commitment to Macquarie’s new Australian-focused infrastructure fund, sources familiar with the process told Infrastructure Investor.

Macquarie Infrastructure and Real Assets’ (MIRA) new 15-year fund is targeting about A$1.5 billion to invest in core infrastructure assets, like the ones coming out of Australia’s ongoing privatisation programme. The Korean pension is expecting to make an annual return of over 8 percent from the fund, which has reached a first close in December and is due to hold a second close this month. Media reports suggest the fund has already raised some A$400 million.

A spokeswoman from Macquarie declined to comment on the new Australian vehicle.

MIRA had looked at last year’s Transgrid privatisation, together with State Grid Corporation of China, which was ultimately acquired for A$10.3 billion by a Hastings Funds Management-led consortium.

New South Wales, which sold Transgrid, is now looking to part-privatise Ausgrid, Australia’s biggest electricity network, in a deal that might fetch up to A$14 billion. It has reportedly received two binding binds from China’s State Grid and Hong Kong’s Cheung Kong Infrastructure.

Earlier this year, MIRA announced it had raised $3.1 billion for Asian infrastructure through its regional fund and several specialist vehicles. The fundraise included the Macquarie Asia Infrastructure Fund (MAIF), which hit its $2.3 billion hard-cap in the close, and specialist investment vehicles. The latter are backed by a diverse group of returning and new investors across Asia Pacific, North America and Europe.

Globally, MIRA manages $101 billion of assets on behalf of institutional clients across 45 funds in more than 120 businesses, as at 31 December 2015.