Macquarie Group on Wednesday unveiled separate deals in the US and China, continuing a trend of consolidation in its fund management business.
Macquarie Group Ltd, Australia's top investment bank, inked the deal on Wednesday with U.S. asset manager Delaware Investments for $428 million in cash from Lincoln National Corp, continuing a trend of consolidation in the fund management business.
The deal would boost Macquarie's total assets under management to over $300 billion, the bank said in a statement on Wednesday.
Delaware manages about $125 billion in assets and the deal was subject to regulatory approvals, Macquarie said.
The bank, based in Sydney, which has weathered the global financial crisis better than its global peers, has been on the lookout for acquisitions, taking advantage of falling asset prices.
The Macquarie has also made a joint venture with China Everbright, a state-controlled offshore investment company, which plans to raise $1.5bn to invest in infrastructure projects in China, Taiwan and Hong Kong.
Macquarie and Everbright will contribute a combined $100 million to the funds, which will invest in toll roads, airports, renewable energy, water treatment, ports and railways in China, the bank said on Wednesday.
The joint venture further underscores Macquarie's shift from direct ownership of infrastructure assets and towards management of the investments instead.
China has a long history of private and foreign sector investment in infrastructure, with well-developed national policies promoting infrastructure investment to improve business efficiency and national wealth, whilst encouraging foreign capital and operating expertise, Everbright CEO Chen Shuang said.
The importance of private capital in China is demonstrated in the nearly 60 listed infrastructure operators with a combined market capitalization of over $150 billion.
One of the funds planned by Macquarie and Everbright will target international institutional investors and focus on industries where foreign investment is encouraged by the Chinese government. The second fund, whose establishment awaits regulatory approval, will target domestic investors and allow yuan capital commitments, it said.
The funds, to be managed by asset management companies jointly owned by Macquarie and Everbright, have targeted a first close in 2010, it said.
They will invest alongside each other and have the same investment mandates, the statement said.
Macquarie is one of the largest infrastructure fund managers globally, with over 25 listed and unlisted funds managing over 100 infrastructure assets, with $36 billion of infrastructure equity under management as of the end of June.
Everbright is the Hong Kong listed subsidiary of China Everbright Group, the first formally registered financial conglomerate in the nation.
Despite the global financial crisis, the IMF forecasts that the Chinese economy will continue to grow at 6 to 10% per annum in the foreseeable future, which encourages investors from home and abroad to join the infrastructure development, Chen said.
The rate of investment into infrastructure development in China is still believed to be among the highest in the world. We see many opportunities to bring international capital and asset management expertise to support this growth, to the benefit of investors and the country, Chen said.