Infrastructure funding requires trillions of dollars every year. Here’s how investment firms Morrison, Macquarie & KKR are making the most of it. Video / Carson Bluck
Major asset management firms are placing big bets on infrastructure to fill a funding gap created by western governments, who cannot afford to build and maintain all of it alone after blowing out balance sheets.
“The ability for governments to generate that sort of capital and have that invested with the public purse is really difficult,” Morrison & Co’s head of listed investments Tim Skerman told Markets with Madison.
“We’re seeing a lot of circumstances where, sadly, infrastructure is ageing and it’s not even being maintained effectively.”
Airports, toll roads, renewable power stations, energy grids, telecommunication sites and data centres were all in increasing demand, Skerman said.
“The amount of capital that’s required to deliver what we’re demanding as a society, in terms of energy transition, in terms of our use of digital, the consumption of data and all the infrastructure that’s required to support. That is huge.”
Morrison had $38 billion in assets under management - just a slice of the estimated existing US$1 trillion market that required another US$3.6t annually, according to JP Morgan and McKinsey.
“It is a big need for infrastructure capital. So it’s a big market. It’s a big market opportunity.
The major players in infrastructure investing globally were Australia’s Macquarie Asset Management, Canada’s Brookfield Asset Management, Sweden’s EQT, New York’s KKR and Global Infrastructure Partners - which was just acquired by BlackRock in a deal worth US$3b.
Morrison-managed Infratil invests in infrastructure assets including Wellington Airport. Photo / Mark Mitchell
Morrison is the manager of Infratil, the NZX-listed infrastructure investment vehicle that owns One NZ, Wellington Airport, wind farms and data centres in Australia.
It just launched a new infrastructure fund for wholesale investors that aimed to invest in infrastructure businesses and deals in OECD economies, specifically Europe and North America.
Skerman said it differed to Infratil, which bought interests in private assets mostly in New Zealand and Australia.
Watch him discuss his firm’s desire to invest in more infrastructure globally in today’s episode of Markets with Madison above.
Get investment insights from executives and experts on Markets with Madison every Monday and Friday here on the NZ Herald, on YouTube and wherever you get your podcasts.
Sponsored by CMC Markets.
Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
