Macquarie funds sitting on A$6bn of dry powder

The infrastructure giant has been putting capital to work more quickly, deploying A$900m in the second quarter of this year, versus A$100m in the first quarter. However, infrastructure fundraising remains sluggish, Macquarie warned.

Unlisted funds managed by the Macquarie Group, the world’s largest infrastructure investor, have more than A$6 billion (€4.3 billion; $5.5 billion) of capital available for investment and are spending the money at a faster clip, according to an investor presentation given by the firm.

Senior executives said in an 84-page presentation to investors at the Goldman Sachs JBWere Australasian Investment Forum that the $A6 billion of available capital is down A$1 billion from the A$7 billion of dry capital the funds had at the end of the first quarter of 2010.

The figures reflect various infrastructure, private equity, real estate funds managed by Macquarie Capital, Macquarie's investment banking business.

In the second quarter of this year, Macquarie-managed funds deployed A$900 million of capital. That’s up sharply from A$100 million Macquarie funds deployed in the first quarter of 2010, according to the presentation.

Macquarie’s funds also refinanced A$2.8 billion of debt during the second quarter. That’s about the same as the first quarter of the year but up A$400 million from a year ago, when credit markets were still thawing from the market disruptions of 2008. Macquarie said its funds management business has seen “gradual improvement in both availability and pricing of debt”.

However, the fundraising market for infrastructure remains tough. Macquarie said it is seeing “limited new commitments to managed infrastructure funds”. Earlier this year, Macquarie Infrastructure Partners II, one of its flagship infrastructure funds, closed below target at $1.6 billion.

Macquarie’s other infrastructure funds, such as the Indian infrastructure fund it’s established in partnership with the State Bank of India, have enjoyed more success. That fund closed on more than a billion in investor commitments in April 2009.

Macquarie’s executives highlighted similar country-specific infrastructure funds, such as its new Mexican and Russian funds, in the presentation and reiterated their interest in pursuing a renewable energy fund. Infrastructure Investor also recently learned that the firm is exploring the possibility of launching a Brazilian infrastructure fund.

Overall, Macquarie manages 23 unlisted infrastructure, real estate and private equity and other funds within the funds management division of Macquarie Capital. Infrastructure is a major component of the business, at 11 funds, according to the Macquarie Capital Funds website.

In July, the Macquarie Capital Funds division changed hands internally within the Macquarie Group. Previously part of the investment banking arm, the division has now been merged with another fund management division within Macquarie Group – the Macquarie Funds Group – and rebranded as Macquarie Funds Direct.

Macquarie has A$333 billion of assets under management across all its businesses, according to the presentation.