Macquarie raises £2.7 billion to finance UK infrastructure

Macquarie Infrastructure Debt Investment Solutions (MIDIS) has raised £2.7 billion in commitments from predominantly UK corporate pension schemes, local authority pension schemes and insurance companies in the latest round of fundraising for its UK infrastructure debt strategy.

MIDIS raised more than £220 million via its second UK focused pooled fund targeting investments in inflation-linked debt in essential UK infrastructure businesses. A further £2.5 billion of commitments was raised to invest alongside the fund through separately managed accounts.

Many maturing defined benefit pension schemes and insurance companies have increased their exposure to inflation-linked infrastructure debt seeking to better match their inflation-linked liabilities. Investors have also been attracted to the prospect of higher returns than those offered by other assets with inflation protection and the lower risk profile of the asset class when compared to corporate debt.

Tim Humphrey, Co-Head of MIDIS, said; “As we emerge from the COVID-19 pandemic, investment in infrastructure and green energy will form a key part of the UK’s economic recovery. By mobilising UK institutional capital to invest in local infrastructure, we are helping essential infrastructure businesses meet the current and future needs of the communities they serve.”

Since MIDIS was established in 2012, it has provided £4.8 billion of capital from predominantly UK institutional investors to invest in the build-out of UK infrastructure. With the revenues of many infrastructure businesses linked to inflation, the strategy has helped UK infrastructure operators to de-risk their long-term business plans.

The strategy has seen MIDIS make 70 debt investments in infrastructure businesses around the UK, providing flexible and cost-effective debt financing solutions for utilities, renewable energy, social and transport infrastructure operators. Earlier this year, MIDIS announced an agreement to provide long-term debt facilities totaling £92.5 million to Tuntum Housing Association, a charitable registered housing provider in the East Midlands.

Macquarie has had a presence in the UK for more than 30 years, opening its London headquarters in 1989. Today, Macquarie is one of the largest investors in the UK, having invested and arranged more than £40 billion in infrastructure projects since 2005.