The infrastructure arm of Macquarie Group has continued to dominate the sector, with the latest survey of alternatives managers finding it is more than five-times the size of its nearest competitor.
I&T News spoke with Macquarie Infrastructure and Real Asset head of distribution, Arthur Rakowski, about the continuing strong performance of the manager and where it is seeing the potential for future growth.
The recently released Towers Watson Global Alternatives Survey 2012 ranked Macquarie Group as the third-largest fund manager by total assets under management and the top infrastructure manager.
According to the asset consultant, Macquarie Group has more than $88.65 billion in assets under management.
In 2011, Macquarie was the top-ranked manager in the survey but the inclusion of other alternative asset classes and technical changes to the methodology for ranking managers resulted in the manager slipping to third on the list.
However, when it comes to infrastructure managers, its top position is unchallenged.
Towers Watson’s analysis shows that the top-five managers now account for more than 63 per cent of assets under management in its list of top 50 managers.
Macquarie is also a leader in attracting large investors and was ranked in the survey as the top manager across all asset classes for managing pension fund assets. The infrastructure manager now manages more than $59 billion in pension fund assets.
It also is the top infrastructure manager for the total size of its sovereign wealth fund assets under management.
Rakowski says that the interest from large sovereign wealth funds in infrastructure has begun to “crystalise” in the last 12 months, with strong interest from Asian and Middle Eastern institutions.
“There has been an emerging class of potentially long-term holders of these assets and that is something that has happened in the last 12 months. It has been talked about for a while but it is beginning to crystalise.”
While this provides potential for Macquarie to increase its assets under management, these sovereign wealth funds can also be potential buyers of assets as the manager’s early 2000s vintage of infrastructure funds starts to reach maturity.
Macquarie was reported to have sold a 9.9-per-cent stake in London water utility Thames Water to the Abu Dhabi Investment Authority last year.
In a separate transaction, it sold another 13-per-cent stake in Thames Water to the BT Pension Scheme in May
In further evidence of interest from Asian and Middle Eastern sovereign wealth funds in core European infrastructure, the China Investment Corporation also bought an 8.7 per cent stake in the water utility earlier in the year.
Experience for sale, too
Rakowski says that given its size and long-term operational experience in managing infrastructure assets, Macquarie is well placed to gain from increased infrastructure activity from sovereign wealth funds.