Macquarie Infrastructure Debt Investment Solutions launches second UK inflation-linked infrastructure debt fund
London, 20 Apr 2016
Macquarie Infrastructure Debt Investment Solutions (MIDIS) is launching its second fund mandated to invest in UK inflation-linked infrastructure debt. The launch follows MIDIS’ successful £829 million close of the first ever UK inflation-linked infrastructure debt fund, which is now in the latter stages of deployment.
The Macquarie Infrastructure Debt Fund (UK Inflation Linked) 2 (the “Fund”) is targeted at UK pension schemes seeking to invest a minimum of £10 million into debt to match their long-dated inflation-linked liabilities over a 30-year term.
Similar to the first inflation-linked fund, this Fund will follow a buy and hold investment strategy which aims to achieve returns in excess of traditional liability matching strategies. This appeals to pension schemes’ increasing appetite to use illiquidity premium as a source of returns, rather than the more traditional bar-bell strategies comprising of large allocations to equity and gilt investments.
MIDIS identified an opportunity in early 2014 for pension schemes to lend directly to UK infrastructure businesses in inflation-linked form. MIDIS’ market leading inflation linked fund removed the barriers to pension scheme participation and the success of the first pooled fund has proven the scale of the opportunity.
Tim Humphrey, Managing Director of MIDIS, said: “The launch of our second fund of this type reflects how an inflation-linked debt investment strategy is an effective solution for UK pension schemes needing to de-risk, deliver returns and achieve portfolio efficiencies. This demand from institutional investors is met by the supply of UK infrastructure borrowers seeking flexible and cost-effective debt funding solutions - which mitigates the execution risk posed by public markets and avoid banks’ variable Macquarie Group of Companies appetite for infrastructure finance. We look forward to receiving similar investor enthusiasm for MIDIS’ second inflation-linked infrastructure debt fund in the UK.”
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Founded in 1969, Macquarie operates in more than 65 office locations in 27 countries and employs more than 13,500 people. Assets under management total approximately £234 billion at 30 September, 2015. For more information, visit www.macquarie.com.
About Macquarie Infrastructure Debt Investment Solutions
In 2012, Macquarie established the Macquarie Infrastructure Debt Investment Solutions (MIDIS) platform to leverage the infrastructure expertise within Macquarie into an investor-aligned global infrastructure debt investment management business. The MIDIS platform has been successful in securing mandates in excess of £3.3 billion with prestigious insurer and pension scheme clients and has a track record of investing at attractive yields. Since MIDIS’ inception, it has deployed £1.7 billion into debt investments across 13 infrastructure subsectors. These included fixed, floating and inflation-linked debt investments in transport, regulated utilities, social infrastructure (including social housing), solar photovoltaic (PV), and wind.