Macquarie raises £2.7bn for second UK infra debt strategy

The majority of the capital – £2.5bn – was raised for separately managed accounts that will invest alongside the blind pool fund in utilities, social and transport infrastructure, as well as renewables.

Macquarie Asset Management’s infrastructure debt arm has raised a total of £2.7 billion ($3.4 billion; €3 billion) for its latest infrastructure debt strategy focusing on the UK market, predominantly from UK pension funds – corporate and public – as well as insurance companies.

Macquarie Infrastructure Debt Investment Solutions raised more than £220 million for the blind pool fund Macquarie Infrastructure Debt (UK Inflation Linked) Fund 2, and an additional £2.5 billion that will be invested alongside the fund through separately managed accounts.

The split between the fund itself and SMAs is more pronounced than in the previous vehicle, which closed on £829 million in July 2015 and raised an additional £700 million for SMAs.

Macquarie declined to comment on this apparent shift, but a source told Infrastructure Investor that Fund 2 attracted more interest from larger investors who prefer managed accounts rather than smaller investors who prefer to access the asset class through a fund vehicle.

Fund 2, which was launched in 2016, will invest, like its predecessor, in utilities, transportation, social infrastructure and renewable energy. However, renewables are expected to be in sharper focus in Fund 2.

“There is strong appetite among investors for opportunities in sustainable assets, across both the renewables and social infrastructure space,” the source said, adding that investment in the space is expected to continue growing, thanks to investors’ increasing focus on ESG as well as the growth of renewables projects not only in the UK but globally.

MIDIS has already deployed capital through its latest UK debt strategy. In March, it announced that it would be providing £92.5 million in long-term debt financing to Tuntum Housing Association, a UK charitable registered housing provider.

Tuntum owns and manages approximately 1,500 social and affordable homes across the East Midlands, and also delivers essential support services to vulnerable groups in the community, including the elderly, homeless young people, young mothers, domestic violence victims and refugees, Macquarie said at the time.

“The bespoke debt facilities provided by MIDIS will support Tuntum in its ambition to deliver approximately 280 new affordable and shared ownership homes over the next five years,” it said.

Tuntum is one of 70 debt investments MIDIS has made – totalling £4.8 billion – in the UK, since its inception in 2012.