The group head of Macquarie Asset Management is set to relocate from Hong Kong to New York later this year as MAM looks to capitalise on untapped opportunity in the region.
Ben Way, who became MAM’s group head in April last year, has been with Macquarie Group for nearly 16 years and is currently based in Hong Kong. Before taking up the reins as the group head, he spent seven years as chief executive of its Asia division. However, Way is now keen for MAM to take advantage of a growing opportunity set in the US.
“Just in terms of investors in America, whether they’re retail or institutional, our view is that they are generally underweight in private market assets,” he told Infrastructure Investor. “Clearly, in a market the size and scale of the US, we’ve got room to grow and do more. We’ve got a deeper, broader product offer than ever before and we believe we can deliver the outcomes that our clients and partners are looking for.”
Indeed, MAM last week announced the closing of its third Asia-Pacific fund on more than $4.2 billion, while it is also in the market with its seventh European infrastructure fund, which it is thought could reach about €9 billion. In August last year, it announced the $6.9 billion closing of its Americas-focused Macquarie Infrastructure Partners V and Infrastructure Investor understands MAM to be close to re-entering the market with a successor vehicle, targeting a further $7 billion.
Way declined to be drawn on specific fundraises, but outlined the method in which MAM has been working as the regional funds grow in scale.
“We don’t want to have too many products in the market at any one time,” he explained. “We’ve established a cadence of fundraising that reflects the needs of our clients and partners. Effectively, the way it’s working now for our regional core-plus strategies, as one closes, the next one is starting in another region.”
The MIP series was previously billed as a North America-focused fund, although since Fund V, it targets the Americas more broadly.
“We’ve broadened our mandate as we think there will be increasing opportunities across the Americas – for example, we made our first investment in Colombia last year,” said Way. “That said, the US remains a very exciting market because of the scale and need for private capital. There is also real innovation going on in the US, especially in terms of energy transition and digital infrastructure.”
He continued: “We are very supportive of the administration’s efforts to increase federal investment in American infrastructure. Though the majority of infrastructure decisions are made at the state and municipal level, the Bipartisan Infrastructure Law is important and could provide further tailwinds for infrastructure investment. To make the most of this moment, state and local leaders will need private companies to play a big role – we look forward to doing our part.”
Where does the transition fit?
Way highlighted the US as a place where many of the earlier-stage innovations in the energy transition market are happening, labelling net zero “the existential challenge of our lifetime”. Macquarie acquired the Green Investment Group from the UK government five years ago and in April, the unit moved from operating within Macquarie Capital into MAM, a move that will mean more for the GIG than structural reorganisation.
“We’re very excited about GIG joining Macquarie Asset Management and how we can use our combined expertise, credibility and track record to unlock more opportunities for our investors in the energy transition segment,” Way said. “The world has an enormous amount of capital and it’s that capital that we need to match with opportunities to accelerate the transition to net zero.”
So, with the GIG freshly integrated into MAM, what does that mean for the future of energy transition assets in Macquarie’s regional infrastructure funds?
“The team will be looking at how we can identify and deploy capital, both for our established funds as well as evaluating new opportunities that might have a different risk-return profile,” responded Way. “We think there are interesting opportunities in hydrogen, the circular economy or carbon capture, those sorts of things which are proven technologies, but not commercialised, not large-scale and which probably have a higher risk.”
That being said, it’s not the end for more traditional renewables products to come from the GIG, added Way, whose most recent fund was the Macquarie Green Investment Group Renewable Energy Fund 2, which closed on €1.6 billion in February last year. MGREF2 last week committed to develop a 586MW wind and solar hybrid project in Brazil.
Of course, the ownership of GIG brings a focus on green assets, but Way is keen to look at sustainability in a broader way.
“We’re not only looking at whether an investment will deliver the right return over time, but also considering whether this is a company, product or a service that we think will be sustainable over time,” Way said. “That’s how we think the businesses will be rewarded.”