Perspectives
10 August 2023
Underpinning daily life across the Americas is an interconnected network of technology, software and digital services that facilitate economic activity, progress social development, address community need and advance long-term prosperity.
These range from digital platforms providing education and healthcare to the payments systems that enable finance flows, the software that protects critical systems and drives digital equity, and the technologies that advance international competitiveness.
While their importance may not be as widely recognised as the infrastructure facilitating the physical movement of goods, people and utilities, these systems are just as important to the functioning of modern societies globally and deliver an equally significant positive socioeconomic impact.
“The role of these areas in the functioning of the economy and modern society might be lesser known than their physical counterparts, but it’s equally important,” says Michael Silverton, Group Head of Macquarie Capital, based in New York. “Not only do they facilitate much of our everyday lives, but they advance economic growth, improve socioeconomic and environmental outcomes, and expand opportunity.”
The role of these areas in the functioning of the economy and modern society might be lesser known than their physical counterparts, but it’s equally important.”
Michael Silverton
Group Head of Macquarie Capital
Alongside its support for physical infrastructure – including revitalising bridges and roads, developing energy facilities and expanding internet fibre and connectivity – Macquarie Capital is helping to meet growing demand for this less-tangible infrastructure through enabling private sector investment and innovation.
“Population growth, changing demographics and technological evolution drive ever-increasing demand. With competing budget priorities, governments and communities around the world are looking for new sources of funding and ideas to expand delivery of these services,” says Silverton.
This is an approach the business is taking globally in response to these common challenges, while leveraging its specialist teams in each region to work with clients and partners to mobilise private capital that can help meet the specific needs of local communities.
Sam Shah, who co-heads Macquarie Capital in the Americas and leads its Software and Services practice globally, believes the opportunity for the private sector to improve outcomes in non-core infrastructure across the Americas is significant.
“Involving the private sector and applying its expertise, knowledge of problem solving and access to capital to deliver these services adequately and efficiently in this region will become increasingly important to meet growing demand and ensure they keep pace with technological developments,” Shah says.
As public funding faces competing needs in countries right around the world, partnering with private capital to fund, manage and deliver the services relied upon by businesses and communities daily can not only free up scarce public resource, but also provide access to specialised expertise and skillsets.
With global capability in advisory and capital raising services, Macquarie Capital works with partners and clients to develop, innovate and invest in areas as diverse as online learning and education software, cybersecurity and artificial intelligence systems, digital real estate platforms and healthcare records, and advancing climate solutions.
Last year, Macquarie Capital invested in PayIt, a leading provider of modern, cloud-based software and integrated payments to state and local governments in the US. Founded in 2013, PayIt allows government agencies to digitise critical public services, improve operational efficiency and revenue collection, and streamline citizen engagement. Macquarie Capital’s investment is enabling further growth and product innovation.
Similarly, Macquarie Capital also advised and provided private credit to Crisis Prevention Institute, a leading provider of behaviour management and crisis prevention training. Macquarie’s investment and associated acquisition helped further the company’s reach and help more professionals respond to anxious, hostile and violent situations safely.
Silverton says there has been a growth in demand for its specialist expertise and the access to private capital it can help facilitate in certain areas.
“From investing in specialist technology firms to preparing employees for the roles of the future, improving school-age reading outcomes through edtech, using automation to improve government service efficiency, and sourcing the minerals and materials needed to facilitate the energy transition, we work with clients, partners and communities to solve problems in areas where together we can make a real-world impact.
“In doing so, Macquarie Capital is mobilising private capital to help address areas of unmet community need and some of the urgent challenges facing society, allowing governments to shift their focus away from developing and owning the solutions to facilitating and regulating their provision.
“It’s where we can play a core role: connecting capital from a range of sources to where it’s needed most, while enhancing efficiencies and the provision of services at the same time.”
Macquarie Capital has been in the Americas since 1994 and currently has close to $A10 billion1 invested across the region. Investing alongside partners and clients across the capital structure, it identifies and advances important long-term and market trends, including the evolution of industries that can act as a catalyst for equitable outcomes.
One key area Shah and his team are focused on from a software perspective is education, and supporting efforts to tackle declining literacy and reading skills in the US. Really Great Reading, with Macquarie Capital as adviser, recently partnered with The Vistria Group, which is enabling the company to reach new, underserved markets and to help more children become proficient readers. Really Great Reading provides a digital curriculum that includes phonics and vocabulary literacy solutions for grades PreK-12 and is aiming to reach more than 600,000 students and 40,000 teachers in all 50 US states.
Macquarie Capital is also supporting startups to expand into the US market. Australian-based Sapia.ai has created AI-powered technology that helps firms make faster, smarter and unbiased hiring decisions, driving more equitable outcomes for candidates and companies looking to grow their teams. Macquarie Capital led a Series A fundraising, which is enabling Sapia’s expansion into the US this year.
“From a sector perspective, technology is a key theme that is helping drive progress towards more equitable outcomes and enabling companies to increase their societal impact as they digitalise, expand and enhance their offerings,” says Shah. “As a partner, we provide solutions, capital, skills and experience from around the world and apply them to the nuances of this market.”
As a partner, we provide solutions, capital, skills and experience from around the world and apply them to the nuances of this market.”
Sam Shah
Head of Software and Services, Macquarie Capital
Co-Head of Macquarie Capital in the Americas
North America offers long-term economic opportunity, providing a welcoming place for capital investment and growth, thanks to well-established economies and supportive tailwinds like growing populations, digitalisation and nearshoring. Meeting a growing demand for public services and advancing its economic and environmental sustainability predicates an important role for the private sector.
The potential for the private sector is best harnessed by building a deep understanding of various industries and combining that with partners who have both the capital and willingness to invest – particularly financial sponsors, Silverton believes.
“There is a huge need for private capital here and a huge opportunity. What it really comes down to is having the expertise to match that capital with the right opportunity set in a way that delivers, first and foremost, for our clients but ultimately for a whole range of stakeholders.
“What Macquarie Capital has proven in the Americas region over almost 30 years, especially here in the US, is that we can do that very well. With specialist teams on the ground, we maintain a regional focus while leveraging our global capabilities and networks to connect clients to capital, insights, and expertise,” he says.
“And as markets and opportunities evolve, so do we. Right now, there’s a huge opportunity for us to step in and help plug funding gaps by working with our clients to enable private capital investment and, in doing so, make a real impact together.”
Macquarie Capital is connecting ideas with capital. Our global corporate advisory, investing, development and equities capabilities are underpinned by a full spectrum of capital solutions from debt, equity, and private capital to investing our own capital to enable new opportunities. Our network operates in 24 markets around the world and brings deep sector expertise across the aerospace, defense and government services, consumer, gaming and leisure, critical minerals, energy, financial institutions, healthcare, industrials, infrastructure, real estate, services, software, technology, telecommunications and media sectors.
For more information on Macquarie Capital’s impact in the Americas, see our US Investor Tour update.
