HONG KONG, August 19, 2009 - Macquarie Group Limited (Macquarie, ASX:MQG) and China Everbright Limited (Everbright, HKSE:165) today announced that they have entered into a joint venture to establish two funds to invest in infrastructure businesses in Greater China with a focus on core infrastructure. 

 

The first fund will be open to non-PRC, non-retail investors targeting Greater China core infrastructure opportunities, primarily in the toll road, airport, renewable energy, water and wastewater, port and rail sectors. These sectors in China are classified as “encouraged” under “The Catalogue of Industries for Guiding Foreign Investment” published by the Ministry of Commerce and the National Development and Reform Commission, the key national regulators. The second fund will be a domestic investment vehicle admitting Renminbi investors and its establishment is subject to PRC law and approvals. It is proposed for the two funds to co-operate and invest alongside each other and have identical mandates. The funds will be managed by Macquarie and Everbright through jointly owned asset management companies. 

 

 

The international and domestic funds are seeking to raise US$1.5 billion in aggregate, with each targeting a first close in 2010. Macquarie and Everbright have committed to jointly contribute up to US$100 million as sponsors of both funds. 

 

Macquarie and Everbright bring a strong combination of local and international infrastructure asset and funds management expertise to the joint venture. Macquarie is one of the largest infrastructure fund managers globally, with over 25 listed and unlisted funds managing over 100 infrastructure assets, with US$36 billion of infrastructure equity under management as of June 30, 2009. 

 

Everbright is the Hong Kong listed subsidiary of the China Everbright Group, a Chinese state-owned enterprise and China’s first formally registered financial conglomerate. Everbright has been developing a wide range of investment funds management businesses in Hong Kong. Everbright is also the second largest shareholder of the Mainland-based Everbright Securities Co., Ltd., China’s ninth largest by brokerage market share in 2008, and the third largest shareholder of China Everbright Bank, China’s eleventh largest commercial bank by total assets as at December 31, 2008. 

 

David Russell, Macquarie’s Head of Private Equity Asia and Greater China said: “The combination of Macquarie’s international infrastructure asset and funds management expertise and Everbright’s China experience and know-how will create a powerful investment partnership in China, especially in generating attractive investment opportunities. As a manager of infrastructure assets, we appreciate that governments, potential partners and vendors are attracted to managers with a history of responsible asset management and depth of expertise, together with an understanding and sensitivity to local issues.” 

 

 

“We are confident that Chinese infrastructure continues to offer attractive investment opportunities to both international and domestic investors and that our first mover advantage will contribute to our success,” Mr Russell said. He also emphasised that a key and unique feature of the funds and the Macquarie Everbright joint venture was the commitment to building a local business. “Particularly in Asia and our emerging market businesses, we are constantly reminded that key to the success of building sustainable, long term businesses is a commitment to being local. This requires a dedicated focus to the Greater China market, committing to employ and develop local staff, submitting to and abiding by Chinese laws and customs and treating Chinese government officials and businesses as long term partners.”