Macquarie’s $2.3 bn Europe infra fund raises $405 mn from Korea

Macquarie's new European infrastructure fund, which targets a €2 billion ($2.3 billion) fundraising, has drawn €350 million ($405 million) from South Korean institutional investors, including Korea Scientists and Engineers Mutual-aid Association (SEMA) and Public Officials Benefit Association (POBA), who were attracted by an additional yield gain from currency hedging and regulatory stability in Europe.

SEMA, a $4.6 billion retirement fund, committed €30 million ($35 million) to Macquarie Super Core Infrastructure Fund for an expected annual return of 7%, according to sources with knowledge of the matter on June 7.

It was first reported by South Korean news provider the Financial News last week and confirmed by the sources.

South Korean asset owners are increasingly turning to non-dollar fixed incomes. They earn around 150 basis points in extra yield from the euro/won cross-currency market.

The fund with a 20-year term will be launched by the end of this month to invest in core regulated utilities such as power, gas and water treatment facilities in Europe.

“This investment is attractive because there would be no significant new investment and little change expected in regulated utilities in Europe,” Financial News quoted an unnamed investment banking source as saying.

Vogo Fund, a Seoul-based private equity firm, launched a domestic vehicle to raise capital in South Korea for the infrastructure fund which was oversubscribed.

No further details were disclosed about the committed capital from POBA and other Korean investors.

In 2016, South Korean institutional investors including SEMA and National Pension Service committed to Macquarie European Infrastructure Fund 5 which raised €4 billion in total commitments.

By Daehun Kim

daepun@hankyung.com

Photo: Getty Images Bank