The Abu Dhabi Investment Authority (ADIA) announced today that infrastructure veteran John McCarthy is its new global head of infrastructure, “effective immediately”.
McCarthy will be based in Abu Dhabi and will report to Majed Al Romaithi, executive director of the sovereign wealth fund’s combined real estate and infrastructure businesses.
“John has a strong reputation as one of the most experienced investment professionals in the infrastructure sector. His knowledge, proven leadership skills and deep relationships across the industry will play an important role in further developing ADIA’s strategy in the infrastructure space,” Al Romaithi commented in a statement.
McCarthy headed Deutsche Bank’s RREEF Infrastructure since 2005, but the German bank announced his departure earlier this year following a lengthy strategic review that almost saw RREEF sold to Guggenheim Partners. Finally, Deutsche Bank decided to keep RREEF as an integral part of its business, consolidating it into the bank's newly integrated Asset & Wealth Management division.
But the drawn-out strategic review ended up torpedoing the fundraising for RREEF’s second infrastructure fund, which had held a first close on €620 million and was targeting a final close of between €2 billion and €3 billion.
After the collapse of the sales process to Guggenheim, Fund II’s limited partners asked for the money back, allegedly citing a misalignment of interests. RREEF Infrastructure already manages a €2.1 billion infrastructure fund.
Rumour has it that McCarthy tried to engineer a management buyout of RREEF Infrastructure following the collapse of the sales process, but Deutsche Bank was not interested, precipitating his exit. The bank subsequently appointed Hamish Mackenzie and Nadir Maruf – both RREEF Infrastructure veterans – as co-heads of the business.
ADIA is one of the most high-profile direct investors in infrastructure with holdings in several global flagship assets, including London’s Gatwick Airport, Thames Water, the UK’s largest water and wastewater utility, and Norwegian gas distribution network Gassled. The sovereign wealth fund, which is believed to manage over $600 billion of assets, has spoken of allocating between 1 and 5 percent of its portfolio to infrastructure.
In a reverse movement to McCarthy’s – who left a general partner to join an institutional investor – Chris Koski, ADIA’s former global head of infrastructure, recently joined Morgan Stanley Infrastructure as global head of investment strategy, a newly created position.
In an exclusive interview with Infrastructure Investor, Koski said his new role “is to co-ordinate our investment activities across different regions and sectors and bring to bear my relationships where I think they can add value.” He added: “Having spent the last 10 years helping to build the infrastructure programmes at ADIA and CPPIB means I can bring that global perspective.”