Macquarie drops $847m UK fund float plan

Australian investment bank Macquarie has shelved plans to float one of its funds on the London market, blaming poor market conditions for its change of heart.

The Macquarie global income fund had hoped to raise up to £300 million ($847 million) by listing on the alternative investment market in what would have been the company's first London Stock Exchange float.

A company official said the float was abandoned because "market conditions were uncertain".

Although British markets had a bumpy period mid-year, they have picked up in recent weeks. Macquarie refused to say whether it would consider rescheduling the float.

Reports in the financial press suggested that the float received a lukewarm reception from fund managers, who are reputed to be unimpressed with the fund's high charges.

The fund was also expected to have a large holding in several of Macquarie's infrastructure investments, which many of the same fund managers have only recently quit.

Fund managers believe infrastructure assets are overpriced because of the intense bidding wars for companies such as P&O and BAA over the past year.

The news came as Macquarie unveiled a hostile approach for an infrastructure asset, days after winning the £8 billion auction for Thames Water.

Macquarie's latest target is Techem, a German company which meters water use and is worth about £737 million.

Macquarie's European Infrastructure II fund has a 17 per cent stake in the company, and wants a majority.

- INDEPENDENT