Goldman, Macquarie close infrastructure funds below target

According to Infrastructure Investor, Goldman Sachs and Macquarie have both closed their Infrastructure Partners II vehicles at less than half their original targets, leaving two of the sector's strongest brands with a combined $4.7bn on a $13.5bn ask. That shortfall says as much about the ceiling on unlisted infrastructure fundraising as it does about either firm's standing.

Goldman Sachs Infrastructure Partners II closed with $3.1bn in commitments against a $7.5bn target, or 41% of the goal; Macquarie Infrastructure Partners II pulled in $1.6bn of a $6bn target, roughly 27%. In absolute terms neither vehicle is a disappointment—$3.1bn is a headline close for most managers and $1.6bn is a real pool of capital—but the proportions tell the harder story: Goldman raised less than half of what it wanted and Macquarie less than a third.

By 2017 the big blind-pool infrastructure mandate was already falling out of favor; LPs were willing to write checks to Goldman and Macquarie but less willing to write multibillion-dollar checks to a name and a strategy memo. The infrastructure pitch had moved toward identifiable, cash-flowing assets, the kind a limited partner can underwrite and hold; a generalist fund asks for ten years of discretion instead, and these two closes put a price on that trust.

Macquarie's behavior since then points the same way. As this publication has reported, the firm sold its Polish fiber assets to fund a data-center push, an exit-and-recycle strategy suited to a platform that raised barely a quarter of its original target. The sale turned a mature asset into growth capital—a concrete example of the recycling loop large infrastructure managers have come to rely on. When the market won't fund the whole plan, the plan has to fund itself. Infrastructure Investor's report does not say which investors committed to either fund or when the final closes took place.

Neither firm is out of the infrastructure business, but a brand alone no longer carries a vehicle to its original size. The next large infrastructure vintage will have to open its pitch with the asset and its contracted cash flow, not the manager's history.