Welcome to our fourth Infrastructure Investor 30 ranking of the world’s largest infrastructure investors – and welcome also to a new way of doing things.
In previous years, as you may recall, we have based our ranking on “formation of capital” over the prior five years – a methodology which brought together the likes of institutional investors and developers as well as fund managers.
This had the merit of allowing a rough comparison of the relative investing power of the disparate groups that commit capital to infrastructure. It was not, however, an apples-to-apples comparison and – while the intention was a good one – the end result was arguably somewhat confusing.
This time around, we decided to make things simpler. We are still using a five-year time period, but we are taking into account only equity funds raised. A full explanation of the methodology may be found at the back of this II 30 section on p33-34.
By no means should this imply that equity funds raised will be our sole focus going forward. Far from it: we will also be keeping a close eye on other ways of raising and deploying capital for investment in infrastructure, and our intention is to produce more rankings. But these will be done in a way that offers genuinely meaningful comparisons.
CLOSING ON MACQUARIE
So, with that said, what conclusions do we draw from this year’s version? One is that the traditional dominance in the rankings of Australia’s Macquarie is being eroded. The first signs of this had already been noted in previous rankings but, as recently as last year, Macquarie Infrastructure and Real Assets (MIRA) had still gathered around twice as much capital over five years as Toronto-headquartered Brookfield Asset Management (BAM), its nearest competitor.
This time, the gap is much smaller – in spite of MIRA having recently garnered €2.75 billion for its latest European fund. On a total of $23.3 billion, MIRA is now a little less than $5 billion in front of BAM, which recently closed the world’s largest infrastructure fund of 2013 – Brookfield Infrastructure Partners Fund II – on $7.0 billion.
A related point is that an “elite three” of MIRA, BAM and New York-based Global Infrastructure Partners (GIP) has become evident. GIP, which last year closed the world’s largest infrastructure fund on $8.25 billion, is in third place in our ranking on almost $16.5 billion.
There is then a large gap from third to fourth, where Borealis Infrastructure – the infrastructure investment arm of the Ontario Municipal Employees’ Retirement System (OMERS) – boasts $6.8 billion of capital.
Among the rest of the II30, some significant upward moves can be seen: IFM Investors, SteelRiver Infrastructure Partners, Morgan Stanley Infrastructure, JP Morgan Asset Management, Citi Infrastructure Investors (which is focused on winding down its latest infrastructure fund), Ardian (the former AXA Private Equity) and Kohlberg Kravis Roberts have all taken big steps up the ladder.
The dominance of US-based firms has become more apparent in this year’s ranking, with investors based there accounting for $51 billion, well ahead of Australia-based firms, which raised a collective $33 billion. Last year, the gap was much smaller at $54 billion to $48 billion. The proviso is that – as referred to at the outset – the composition of this year’s ranking is somewhat different.