Macquarie ups fund target due to strong demand

Australian financial services giant Macquarie Group has increased the target size of Macquarie Infrastructure Partners III (MIP III), its latest offering focusing on North America, to $2.5 billion from $2 billion previously, according to a US Securities and Exchange Commission (SEC) filing.

MIP III has collected $1.89 billion in commitments from 49 investors, including non-US investors, according to the regulatory filing of January 24. The fund almost reached its initial $2 billion target within one year of fundraising beginning. 

The first close was held in September 2013 on $1.3 billion.

The decision to increase the target size was driven by strong investor demand which may be enough to surpass even the revised target, sources told Infrastructure Investor. Macquarie spokesperson Paula Chirhart declined to comment.

The fund, which targets North America, will focus on communications, waste, transportation and energy/utilities. One project to be funded through MIP III is the $1.5 billion Goethals Bridge, the same sources said.

A consortium teaming Macquarie Group and Kiewit Corporation was awarded the public-private partnership (PPP; P3) project that involves replacing the 85-year old bridge – linking New York to New Jersey – through a design, build, operate, finance and maintain concession.

The P3 is being partly funded through a $474 million TIFIA [Transportation Infrastructure Finance and Innovation Act of 1998] loan, while the Port Authority of New York and New Jersey also undertook a $457 million bond offering to help finance the project.

Macquarie and Kiewit will contribute $113 million in equity, with Macquarie’s fund arm – Macquarie Infrastructure and Real Assets (MIRA) – responsible for 90 percent of the equity contribution and Kiewit Development Corporation responsible for the remaining 10 percent.

MIRA and Kiewit Development Corporation will maintain and operate the successor bridge as ‘NYNJLink Partnership’ via a 40-year availability payment structure.

MIP III is the successor to Macquarie Infrastructure Partners I (MIP I) and Macquarie Infrastructure Partners II (MIP II), both of which are also dedicated to investing in infrastructure in the US and Canada and are managed out of New York by MIRA.

MIP II closed on $1.6 billion in 2010 while MIP I closed in 2007 after collecting $4.0 billion.

MIRA is an alternative asset manager specialising in infrastructure, real estate, agriculture and other real asset classes via public and private funds, co-investments, partnerships and separately managed accounts.

Its client base is primarily institutional investors, including global pension and superannuation funds, other institutions and governments. MIRA manages over 50 funds with $A108.0 billion ($94.5 billion; €69.1 billion) of assets under management as of June 30, 2013.