Macquarie’s third APAC infra fund closes above $4.2bn – exclusive

Macquarie has also deployed more than $3bn in co-investment capital alongside the funds raised for Asia-Pacific Infrastructure Fund 3.

Macquarie Asset Management has reached a final close of more than $4.2 billion for the third in its series of Asia-Pacific infrastructure funds, making it the largest pan-Asia fund ever raised for the asset class.

The firm far exceeded its $3 billion target for Macquarie Asia-Pacific Infrastructure Fund 3, taking the total capital raised across its MAIF series to more than $15 billion, including co-investment capital.

MAIF 3 will follow a broadly similar strategy to its two predecessor funds, targeting a diversified portfolio of infrastructure assets in China, India, South Korea, Japan, Australia, New Zealand, Indonesia and other Southeast Asian countries. Like its predecessors, it is a 10-year closed-end fund.

The vehicle has already committed more than $2.4 billion, alongside $3 billion in co-investments, into seven assets. These include hyperscale data centre developer and operator Bohao Internet Data Services and cold and dry storage logistics platform Metcold Supply Networks, both in China; renewable energy platform Summit Energy Alliance in South Korea; regional digital infrastructure platform Bersama Digital Infrastructure, which holds a majority stake in Indonesia’s Tower Bersama Infrastructure; Australian fibre business Vocus Group; Bingo Industries, an Australian waste and recycling business; and 2degrees, a telecommunications company based in New Zealand.

Frank Kwok, head of MAM’s Real Assets business in Asia-Pacific, told Infrastructure Investor the fund did not have a hard-cap but that MAM did not want to raise “materially more” than $4 billion for the fund.

“There was potential to raise more,” he said. “But many of our investors also want the ability to make additional co-investments, which is something we’re really conscious of and helped to shape the size of the fund.”

More co-investments will be made alongside further fund investments, Kwok confirmed, on top of the $3 billion already deployed in that regard.

Each fund in Macquarie’s series has grown larger than its predecessor. MAIF 2 closed on its hard-cap of $3.3 billion in 2018, the largest Asia-focused infrastructure fund raised at that time. The fund is now fully deployed. MAIF 1 closed on $2.3 billion in early 2016.

Strong deployment

“The amount of capital coming into the sector increases and fundraising continues to be strong in Europe and the Americas, not just here in Asia-Pacific. Importantly, though, deployment has never been as strong, too,” Kwok said.

“Investors are looking for access to good opportunities, and while the last 12 months have represented our largest year of deployment globally, a majority of that has come through bilateral or non-competitive deals.

“We didn’t target to increase the size of each fund per se, but [they have grown] because investor demand has really increased over time. And now that we’ve been investing in the region for over 25 years, we have a realised track record.”

Verena Lim, chief executive of Macquarie Group Asia and head of investments for MAM’s Asia-Pacific Infrastructure Fund series, added: “The size of the funds has increased but we have also been disciplined in working out what size is appropriate for each fund. That predominantly reflects the opportunity set that we see in our target markets and the sectors that we’re looking at.”

MAM’s LP base for MAIF 3 has grown and diversified from previous funds in the series, too.

“We had at least 10 new investors – not just to the fund series but to MAM – commit to this fund. In profile, it is broadly similar: a mix of pension funds, sovereign wealth funds, insurance companies and other institutional investors,” she said.

Roughly 40 percent of the LPs were from the Asia-Pacific region, 40 percent from EMEA and 20 percent from North America.

Lim said fundraising had taken place largely remotely, owing to travel restrictions imposed by countries in response to the covid-19 pandemic.

“It actually resulted in a lot of human connection through the fundraise, because even though you weren’t physically present, you were invited into each other’s homes virtually,” she said.