Macquarie Infrastructure and Real Assets manages $78 billion of assets in 23 countries across various infrastructure sectors including transportation, utilities, communications, and others. Global infrastructure investment needs are estimated to be $67 trillion over the next 18 years but constrained public budgets and debt availability pose challenges to funding. Pension funds hold $65 trillion but invest less than 5% in alternatives like infrastructure due to liquidity concerns. The new European energy infrastructure investment law could unintentionally prevent Macquarie from investing if it does not recognize the differences between strategic and fund managers.

1. MACQUARIE INFRASTRUCTURE AND REAL ASSETS
The impact of unbundling – who can invest in what in the future
8 March 2013- Howard Higgins

2. STRICTLY CONFIDENTIAL
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Macquarie, The global leader in infrastructure with
€78bn of assets under management
South Africa
 N3 Toll Concessions
 Bakwena Platinum Corridor
 Trans African Concessions
 Neotel
 Kelvin Power Station
Nigeria
 Lekki Concession Company
USA
 Dulles Greenway
 Indiana Toll Road
 Chicago Skyway
 Icon Parking
 Total Terminals International
 Smarte Carte
 Penn Terminals
 Airport Services (fixed base
operations)
 Waste Industries
 Global Tower
Partners
 Aquarion Company
 Broadrock
Renewables
 Puget Energy
 District Energy
 Duquesne Light
 The Gas Company
 Bulk Liquid Storage
Terminal Business
Canada
 Edmonton Ring Road
 A-25
 AltaLink
 Cardinal (power station)
 Whitecourt (biomass facility)
 Chapais (biomass facility)
 Erie Shores Wind Farm
 Hydro Power Business
 Halterm Limited (port)
 Fraser Surrey Docks
UK
 M6 Toll
 Bristol Airport
 Wales & West Utilities
 Thames Water
 Combined Landfill
Projects Envirogas
 Energy Power
Resources
 Arqiva
 Airwave
 Condor Group (ferry
services)
 National Car Parks
 Wightlink (ferry services)
Belgium
 Brussels Airport
Denmark
 Copenhagen Airports)
China
 Changshu Xinghua Port
 Hua Nan Expressway
Taiwan
 Miaoli Windpower
France
 Autoroutes Paris-
Rhin-Rhône
 Trois Sources &
Lomont Windfarms
 Compteurs Farnier
(water metering)
 EPR France (wind
farm)
 RES (wind farm)
 Pisto SAS (oil
storage and
distribution)Germany
 Warnow Tunnel
 GWE (heat & power)
 Techem
(submetering)
 Thyssengas
 TanQuid (tank
storage business)
Poland
 DCT Gdansk (container
terminal)
Spain
 Asset Energia Solar
 Solpex Energia Solar
Sweden
 EPR Sweden (wind farm)
 District Heating operation
 Arlanda Express
Japan
 Hanjin Pacific Corporation (Tokyo,
Osaka)
Australia
 Dampier to Bunbury Natural
Gas Pipeline
 Multinet Gas Holdings
 United Energy Distribution
 AlintaGas Networks
 Hobart International Airport
United Arab Emirates
 Al Ain Industrial City
 Industrial City of Abu
Dhabi
 ICAD Effluent Treatment
Plant
Represents businesses and assets which Macquarie Infrastructure and Real Assets manages on behalf of investors with various direct percentage stakes held in each.
Mexico
Decarred (highways)
South Korea
 Baekyang Tunnel
 Cheonan-Nonsan Expressway
 Incheon International Airport
Expressway
 Gwangju 2nd Beltway Section 1 & 3-1
 Machang Bridge
 Soojungsan Tunnel
 Daegu 4th Beltway East
 Incheon Grand Bridge
 Seoul Chuncheon Expressway
 Woomyunsan Tunnel
 Yongin-Seoul Expressway
 C&M
 West Sea Power/West Sea Water
 Hanjin Pacific Corporation (ports)
 Busan New Port Phase 2-3
 Seoul Subway Line 9, Section 1
 North East Chemical
 Roads
 Airports
 Utilities
 Communications
 Other Transportation
 Other
MIRA manages 95 infrastructure businesses in 23 countries
India
 Viom Networks
 Adhunik Power and Natural
Resources
 MB Power
Czech Republic
 CRa
Russia
 Brunswick Rail

3. STRICTLY CONFIDENTIAL
The Infrastructure Investment Challenge
 Over the last 18 years $36 trillion was invested globally in infrastructure.
 Over the next 18 years OECD estimate the required investment will be $67
trillion (asset investments to GDP ratio of 70%)
 This excludes social infrastructure – schools, hospitals & housing, and does not
address backlogs on the renewal of aging assets.
—Constrained public sector budgets
—Balance sheet pressures for most major strategic investors
—Material reduction in the availability of commercial debt
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The Global economies face unprecedented challenges to fund infrastructure investments
So what’s changed?

4. STRICTLY CONFIDENTIAL
Sources of Infrastructure Funding
 Governments are looking to pension funds for the future funding of infrastructure
investment.
 The OECD estimate pension funds are holding US $65 trillion of assets
 But <5% will be allocated to “alternatives” which includes infrastructure
 Very few Pension Funds invest directly. They use fund managers
 Competence and origin of the investor continues to be a concern.
 Investment capital is mobile and will migrate to geographies where the risk/return balance
is optimised
 Green field or investments with high capex requirements are generally unattractive
because of yield requirements
 The lack of liquidity is a major concern for many investors.
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Where will the funding come from?
Is European energy infrastructure investment attractive?

5. STRICTLY CONFIDENTIAL
Conclusions – What can Macquarie invest in?
 Overall we see unbundling as a very positive development and we will continue to deploy
capital – assuming we can achieve our target returns
 Political and regulatory stability and transparency is a key consideration.
 The way the law has been drafted may unintentionally prevent the Macquarie from
investing
 The law needs to recognise there is a fundamental difference between the governance
arrangements and strategic intent of a strategic v fund manager
Fund managers are either separate or “ring fenced” within their parent organisations
Fund investments are discrete and don't seek synergies or economies of scale across
assets
Large investments are normally consortium based
Any related party transactions are subject to oversight by investors
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