Macquarie launches second UK inflation-linked debt fund

The Australian firm’s debut infra debt vehicle, closed last year on £829m, is nearing full deployment.

Macquarie Infrastructure Debt Investment Solutions (MIDIS), the infrastructure debt arm of Sydney-based Macquarie Group, has launched its second fund focused on UK inflation-linked infrastructure debt.

The Macquarie Infrastructure Debt Fund II looks to collect commitments from UK pension schemes seeking to invest at least £10 million ($14.3 million; €12.6 million) into debt to match their long-term inflation-linked liabilities over a 30-year horizon.

It follows in the footsteps of MIDIS’ debut vehicle, which closed on £829 million last July. Fund I is now “in the latter stages of deployment”, Macquarie said in a statement.

The firm hadn’t responded to a request for comment on Fund II’s target at press time.

The vehicle will stick to a buy-and-hold investment motto with a view to achieving returns “in excess of traditional liability-matching strategies”.

“This appeals to pension schemes’ increasing appetite to use illiquidity premium as a source of returns, rather than the more traditional bar-bell strategies comprising of large allocations to equity and gilt investments,” it said in a statement.

Launched in 2012, MIDIS currently manages a total of £3.3 billion, made up of segregated mandates and its first pooled fund. It has deployed £1.7 billion across 13 infrastructure subsectors since inception.

These investments have included fixed, floating and inflation-linked debt injections into transport, regulated utilities, social infrastructure, solar and wind assets.