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Macquarie Says Investors to Raise $20 Billion for Public Works

By Ambereen Choudhury

Oct. 12 (Bloomberg) -- Macquarie Bank Ltd., The Carlyle Group and Morgan Stanley are among global buyout firms and investment banks that are now trying to raise about $20 billion to invest in U.S. water companies, roads and airports, Macquarie said today.

Macquarie Bank, the world's largest private manager of infrastructure, creates and oversees funds with holdings that include U.S. Indiana Toll Road and Duquesne Light Holdings Inc., a Pittsburgh utility owner. It has bundled A$88 billion ($66 billion) of assets into funds that it manages.

``We've seen consistently that there isn't enough money for the deal flow that is out there,'' said Chris Leslie, chief executive officer of the Macquarie Infrastructure Partners fund at a conference in London. About $20 billion of new equity is coming to the U.S. infrastructure market, he said.

Macquarie, Australia's largest investment bank, faces greater competition from rivals including Goldman Sachs Group Inc. and Babcock & Brown Ltd. to buy companies ranging from ports to water companies.

Leslie said privatization projects in the U.S. include the Chicago Midway Airport. ``We are certainly encouraged by the fact that airports are being considered for privatization,'' he said.

Leslie said other targets include a stake in the New Jersey Turnpike. The state government is considering a sale of the toll road to raise money for transportation projects. At least 13 U.S. states may hire private companies to help build and operate $34.5 billion in toll roads spanning 2,700 miles, according to the Federal Highway Administration.

Missed Opportunity

In June, Macquarie lost out on a 2.8 billion-pound ($5.2 billion) contest to buy Associated British Ports Holdings Plc, the biggest operator of ports in the U.K., to a group of investors including Goldman Sachs.

Macquarie Bank, which didn't succeed with its bid of 1.5 billion pounds this year to buy the London Stock Exchange Plc, is part of a bidding group for Thames Water Plc, Britain's largest water company, people familiar with the bids said in August. Funds managed by Macquarie Bank sold their U.K. South East Water Ltd. business this month for 665 million pounds before bidding to buy Thames Water amid competition concerns.