Macquarie holds €618m first close on MEIF II

Australian investment bank Macquarie has held an initial close of its European infrastructure fund on €618m and reported a 13% increase in profits in its annual results.

With a slightly broader geographical scope than its vintage 2005 €1.5 billion predecessor, Macquarie European Infrastructure Fund II (MEIF II) has held an initial close on €618 million ($792.4m).

Macquarie announced the first close of MEIF II at a press briefing where it announced its results for the financial year ended March 31. Overall, the group posted a 13 percent increase in profits to AU$916 million (€545 million; $697 million) after tax for the financial year. Income from Macquarie’s international activities, which makes up 48 percent of its total income, rose 59 percent on the previous year’s figures to AU$2 billion; assets including infrastructure and real estate under management jumped 45 percent to AU$140.3 billion over the same period.

A spokesperson for Macquarie said that MEIF II will target investments that provide essential community services, have strategic competitive advantage and produce sustainable and predictable cashflows over the long term.

“It will invest in businesses located in European Union (EU) member states, Norway, Switzerland and other countries acceding to the EU within the fund’s commitment period of an anticipated 4 year,” said Karen Smith at Macquarie in London.

The new vehicle has a slightly broader geographical scope as MEIF I targets similar assets in European OECD countries, added Smith.

A final close on MEIF II is expected in the next 12 months, and will “significantly exceed MEIF I, which closed with €1.5 billion in commitments,” noted Smith without providing a specific target figure.

During the press briefing, Macquarie CEO and managing director Allan Moss said that pension funds’ appetite appear closely associated with demographic shifts. As baby-boomers move toward retirement age, dramatic shifts in investor preference, particularly in Europe compared to the US and Asia, for infrastructure and real estate funds are evident, he said.