Exclusive: Macquarie eyes $2 billion infrastructure fund-sources

Mon Apr 2, 2012 2:31pm EDT
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By Greg Roumeliotis

NEW YORK (Reuters) - Australia's Macquarie Group Ltd (MQG.AX: Quote), the world's largest manager of infrastructure assets, is preparing to raise a $2 billion infrastructure fund in 2012, its third focused on the United States and Canada, people familiar with the matter said.

Macquarie is planning to start fundraising this year, as its second $1.6 billion North American infrastructure fund was fully invested, the people said.

Macquarie declined to comment.

Planning for such a fund comes at a time when political wrangling in Washington and local government budget shortfalls have put spending on infrastructure projects at risk, prompting some politicians to think about partnering with the private sector.

Chicago Mayor Rahm Emanuel last week turned to the private sector to finance $7.2 billion in rebuilding of the city's aging subways, sewers and schools.

But in the United States, Macquarie also faces a market that has long been stymied by political bickering, a multilayered planning bureaucracy, opposition by labor unions and consumer groups to privatization, and a competitive municipal bond market.

Even in Chicago, a 75-year lease of the city's parking meter system in 2008 for a one-time $1.15 billion payment was sharply criticized as fees went up.

Overall, the United States' record in encouraging private investment in infrastructure such as roads, tunnels and bridges lags behind Europe and Australia, according to the Organisation for Economic Co-operation and Development, which in a September report called the U.S. infrastructure market "immature."   Continued...