Good afternoon, everybody, and welcome to Day Three of Macquarie's EMEA Investor Tour. Hopefully, you all found the Veritas Tour this morning useful and insightful. We'll go and see Farnborough in the rain after this, but now you'll hear from Ben and the team talking about MAM, our MAM experience, and then the EMEA team talking about our specific experience and specific skills in the region. With that, I will hand over to Ben. We'll have a short video to play first, and then Ben will hop up. Thank you very much.
At Macquarie Asset Management in EMEA, we employ more than 570 people across 12 locations, with a further 85,000 plus employed through our invested assets. With AUD 204 billion in assets under management, we are the largest infrastructure manager in EMEA.
We're passionate about empowering our people and fostering a culture of excellence. With 25 years of experience in the region, we bring a long-term perspective and couple local boots on the ground with strengths and diversity of our global platform.
Our portfolio companies span across a range of sectors and are an essential part of the communities they operate, relied on by more than 167 million people every day. From data centers to energy transition technologies, we are driving investment into new sectors and scaling our investment capabilities to pave the way for continued growth.
I love working at Macquarie Asset Management because it empowers people to innovate and make investment decisions on behalf of our investors and society.
Good afternoon, everyone. Great to have you here. For those of you who don't know me, I'm Ben Way, I'm the head of asset management for Macquarie. As Sam said, we hope you had a good time at Veritas this morning. Data centers are always on everyone's mind around the world, so we thought it was good to take you there. We had thought about taking you to Roadc hef, which is our service station chain, but instead, we're bringing you to Farnborough Airport. That's a little bit more sexy than service stations. Now, during this afternoon, we're hoping that sometimes we're drowned out by the noise of planes because that's money in our pockets. Planes landing is good for our business, but you'll get a chance to tour Farnborough later on. We love site visits at MAM, and so we're excited to share that with you.
Actually, Farnborough was the home of the first powered flight in the U.K. in 1908 and now is clearly the largest private aviation airport in the U.K. The good news, in the interests of site visits, I can't—oh, there you go—is this is not a slide officially in the pack that we issued today, but this was my most recent site visit. You do not have to get dressed up in an outfit like this. Good news, if you go to a battery manufacturer around the world, you do have to wear this. I was, interestingly, the only person given a yellow outfit out of 200 people that did that visit. I'm still not quite sure why that was the case. Right. Let's talk about Macquarie Asset Management.
I think, as many of you know, we're managing $943 billion of assets today on behalf of both institutional and wealth clients. We invest this through a variety of different strategies and solutions across real assets, real estate credit, equities, and other solutions. I suppose the most important thing to note here is that, as we discussed, for those of you who were with us in the US two years ago, we have a very simple, singular business model in MAM, and that is we're trusted by clients to protect and grow their assets responsibly. The way we do that is to make sure that we deliver alpha. We're not an asset accumulator in Macquarie Asset Management.
We are an investor that is focused on delivering alpha, and the way we do that is to really deliver superior returns that are above the risk-adjusted benchmarks for the relevant asset classes in which we invest. That trust is a real privilege. It is also a real responsibility. It's something that we love doing and we're really proud of the business we've built.
The reason for that is that when our teams go to work every day, wherever it be around the world, but including here in EMEA, we're very conscious of the fact that moms and dads and teachers and first responders, governments, endowments, charities are depending on us to make sure that we can deliver them a dignified retirement or they can draw down insurance policies when they need them, that they can embark on charitable endeavors, that they can nation-build, that they can drive economic growth. That is a big responsibility, and it's something that is a real privilege. Every decision we make within MAM is really focused around being a fiduciary and discharging our fiduciary duty on behalf of our clients. I suppose the key thing that we're very conscious of is that we only win when our clients win.
That is really the approach we take to our business every day, and that is something that we really try to instill in our business. Ultimately, that is because an asset management business is a people business, and people businesses are all about culture. If you think about our platform today, we have got the best laid plans. Sorry, my iPad just turned off. Not that I really need these notes anyway, so let's keep going. You can see here we have got a global platform around the world. Here in EMEA, we will really hopefully bring that to light today. I think sort of two things we wanted to draw out here is, first of all, we have got 116 cultural identities across a team of about 2,300 people operating in 22 different markets.
The reason we want to draw that out is because most of what we do requires local insight. It requires local networks, local relationships, local expertise, even the ability to simply speak the same language. That is something we really pride ourselves on. We do not run Macquarie Asset Management out of one business. We run it through really a local network. One thing I think the EMEA team will bring to light today is that it is this boots-on-the-ground approach that has really set us up for success. It is a very big differentiating factor for MAM. I think the interesting thing about the people presenting today is that outside of myself, everyone else here is based here in EMEA. I think we have got about 175 years of experience speaking to you today. A large chunk of that experience has been gained working at Macquarie.
We really do have long-tenured teams, and that makes a big difference. If you want to originate transactions, if you want to win the trust of regulators or other counterparties, repetition and consistency is really key to that. If you think about our leadership team, they're not only focused and experienced, but they have that long tenure. The average ED at MAM has been working for us for 16 years. One of the things we've been very focused on in EMEA, but around the world, is continuing to invest in that leadership team. It's a real focus for us. Over the last couple of years, we've either appointed or promoted more than 40 senior people so that we can stay ahead.
You can't be a people business and not keep evolving, and you can't be a people business and not invest in your leadership team and make sure that you're responding to the environment around you. We are very conscious of the fact that we need to continually bring in different skill sets, different experience sets so that we can shape and price opportunities and invest in a responsible way. Something that Gabriele will talk about later on is how we're doing that in real assets. We're building out our portfolio performance group by bringing in people that have certain technical or industrial experience that's allowing us not only to make better investments, but to really capture the value in our portfolio companies. Hopefully, you saw that at Veritas today, and you'll no doubt see that at Farnborough later on.
Gabriele has some really great examples about how the MAM value-add process works. Critical to what we do in MAM is risk management. Look, that's the same for every Macquarie business division. All our businesses, including MAM, are underpinned by a strong risk management approach and culture. It's critical to the way we assess, manage, and identify risks. It also directly influences investment returns, but it also allows us to do new things on behalf of shareholders and clients with conviction. I suppose the most important thing to remember is that everyone in Macquarie, not just in MAM, is empowered to speak up. Everyone owns risk, not just the risk division. We spend a lot of time not just talking about the things that have gone well, but the lessons learned.
One of the things that's really important in a business like MAM, which is all built around a really strong investment culture, is the fact that we need the ability not just to say yes, but to say no. The assets that we manage are not ours. They're our clients. That mission to really protect and grow them requires us to not only deploy them, but also to have, I suppose, the courage and the power to say no, and to say no for all the right reasons and understand that. That's something we talk a lot about in our organization. The other thing that we're also focused on is making sure that we drive risk standards and policies in our assets.
We have got an example here from the Czech Gas Networks business, which we sold quite recently, about how we brought a much upgraded approach to work health and safety. We did that by upgrading the compliance framework, making sure that at the board level there was an appropriate work health and safety approach and committee by bringing investing class experts. The reason why risk is so important, besides sort of protecting our clients and protecting our reputation, is it is also a way that we create value and do the right thing. You can see here that we reduced the lost time injury frequency rate by 75%. The reason why that is important is that there is no good business in the world that is not a safe business. Every good business in the world is a safe business.
It's fundamental to our license to operate, but it's also the way that we improve operational performance and we create value. If you have less time with injuries, you have more people focused on the business at hand, and that obviously drives your ability to recruit people, to retain people, to manage your clients, to manage your counterparties, but also it means you're operating more time in terms of revenues. Risk is really central to what we do. MAM, like the group in EMEA, has a long track record. We've been here, as you know, for sort of more than 25 years in the region. One of the important things about EMEA is that it's really been here for a long time, has given us a first mover advantage across a lot of our capabilities.
EMEA is also the foundation of many of our global strategies today, whether it be green investments or private credit. As you can see, we've got $204 billion of assets under management across 10 markets, and we are the largest infrastructure manager in the region. This is something that Martin will talk to a bit more in the moment. If you have a look at our EMEA portfolio, you can see that it's highly diversified. I think it's pretty amazing to think that Macquarie owns a set of businesses here that are used by 165 million people every day. It's not just the patronage and the usage, but the other thing that I'm constantly in awe of is the ideas and the impacts that our team bring to the investments we make.
A really good example of this is Viomed, which is a private healthcare group based in Spain. Our teams, when they bought that business, have worked with the company to install a green hydrogen plant in one of the hospitals in Murcia. That is important because the hydrogen generated from the plant is used for heating, but also the oxygen, which would normally be a waste product, is recycled and it's upgraded to sort of medical standards, which we then use onsite for patients. This is just sort of a small micro example of what we're bringing to our portfolio companies every day. We're not just bringing capital. We're bringing ideas. We're bringing expertise. That comes from right across the MAM global platform. We think about how we can localize that in each one of our regions.
Clearly, that leads to cost efficiencies, but also carbon savings. It makes the business better. One of the things I did want to call out here in terms of our portfolio is just our commitment to sustainability. We have been at the forefront of sustainable investing for over a decade. This means that we work with our portfolio companies to develop and implement plans that affect and address things like governance, succession, net zero, and the like. Because of that commitment, it really has been something that we're proud of, but it's also something that will endure. It's foundational to what we do. It's not only a license to operate in terms of all our stakeholders, but it's our strong belief that it drives better returns for clients.
To put that in perspective, banks want to bank with businesses that have good regulatory track records. People want to work at businesses that are safe and clean. The next buyer of business wants to buy a business that has a good track record across a whole range of criteria. If you think about, just say, the public markets for a second, which I think many of you are familiar with, we've been selecting stocks for the last 30 years using non-financial criteria. That's what we're doing in terms of sustainability. It's our focus on the non-financial areas, including the risk areas that allow us to deliver more value over time.
In terms of our evolution in EMEA, I suppose what you can see is that we really started with infrastructure and that core capabilities then allowed us to expand our offerings into new areas, things like real estate, green investments, credit, and more. There are lots of examples here of innovation and evolution, but maybe let me pick out two. Let me start with an inorganic example, which is the UK Green Investment Bank, which the group bought back in 2017. This was, for us, a transformational acquisition. It gave us a brand. It gave us people. Most importantly, it gave us expertise and a track record that has really enabled, ultimately, our ability to build a green investment fiduciary business.
It is a great example also of business evolution, about a business that started and was owned by Macquarie Capital and then moved into Macquarie Asset Management as it made sense to fiduciarize that business. Again, a really important and transformational acquisition for Macquarie and something that Maks will talk about a little bit more in the moment. A second organic example of our business evolution is digital infrastructure. We started that in Europe in 2005. Originally, it started with things like towers. We moved into fibers. Then, as you would have seen with Veritas today, it has now moved into data centers. Much has been made, as it should have, of AirTrunk. If I can just remind you, AirTrunk was one of 10 data center businesses that we are building around the world. After the sale of AirTrunk, we have now got 9.
Veritas is a good example, as a line would be in the US, of businesses that perhaps are less well known by the market, but are gaining scale very quickly. If you looked at a line in the US, that's probably the largest portfolio company that MAM has ever owned. The good thing about Veritas is that there is a real opportunity for that to become a scale business here in Europe. I think people often look past EMEA from a digital point of view, but the U.K. itself is the third largest data center market in the world. Veritas, at the moment, is the largest data center business here in the U.K., and it's now sitting at about 600 megawatts. The opportunity to move that into the gigawatts is very real.
The good news is that we've got the capital and the know-how and a great partner at Veritas to continue that growth trajectory. I think two really good examples of things that we've been doing for a long period of time, but the runway for whether it be green investments or digital infrastructure is incredibly long. We're also expanding geographically, and that's a really important focus of ours, particularly as we take this mentality of having boots on the ground in local markets. Italy, which Raffaella will talk about in a second, is a good example of that. Along with Macquarie Capital, we opened an office in Milan because we can see not just the client opportunity set there, but also the investing opportunity set there. We want people close to those opportunities so they can help price them, guide them, and unlock them.
Another market that we're moving into now is Saudi Arabia. I think the most pleasing thing, perhaps, about the evolution of MAM and EMEA is that it's accelerating. Over the last five years, we've launched eight new strategies across three divisions. What we're seeing is really the business, which is already at scale, maturing into other areas outside of just real assets. That's obviously important from a diversity point of view, but it's also important in terms of making sure that we are more relevant to clients than ever before. If you have a look at the momentum of MAM and EMEA, you can see here that we've got a track record of delivering capital and base fee growth. EMEA is a very important market for us because it continues to be a key contributor to MAM's operating income.
One way I can probably put that in perspective for you is this: year to date, MAM has signed $100 billion of deals. We have either closed or we have signed $100 billion—that is EV—in terms of new investments. 18 of those transactions have been signed or closed here in EMEA. Yet we have still got $27 billion of equity deployed, and $18 billion of those dollars are here in EMEA. I think that gives you a sense of, first of all, the momentum we have got in our business. That is a very different profile in terms of investment activity than we had, say, 18 months ago, but also the importance of EMEA in the deployment of that capital and the sourcing of opportunities. The other thing you can see here is just the capital raises that we have had in the region.
I think, while Rafa and Gillian will talk about this in a second, what that goes to is both the trust of clients in EMEA, but around the world in this region. We remain very optimistic about our ability to continue to grow the business here and scale it up. Let's talk about diverse income streams. As Alex sort of highlighted to you on Monday, we generate earnings across a continuum of income. In MAM, more than 70% of that income over the last five years has been annuity-like. That's obviously quality, repeatable income. It's mostly driven by base fee growth from either existing strategies or new strategies, but we also have performance fees contributing to that. On average, our performance fees have contributed about $600 million per annum. Globally, some 65% of our real asset funds are in performance territory today.
That's obviously incredibly healthy from a quality of earnings point of view. In terms of market-facing income, that's contributed about 28% of income per annum, and that reflects the investment-related income from MAM's balance sheet positions. You're all acutely aware—I have read your notes from the last couple of days—that that income is related to our green investment platforms. I think you're all aware that we continue to invest in those legacy balance sheet positions. We believe they're very good businesses, but that income is dependent on market conditions. I have no doubt there'll be some questions from this or Gus' group on that in a little while. Turning to our strategy in EMEA, we have a strategic framework for MAM that has three pillars, and EMEA reflects that framework. The first thing that we're very focused on globally is broadening and deepening our client relationships.
To give you a sense of that, of what's happening in EMEA, we expanded our infrastructure and green investment offerings to wealth clients early this year, and that was all launched out of Europe. That is incredibly exciting because that is a large untapped pool of capital for us around the world, including in this region, that has a hunger to diversify into private markets, and it loves, it would appear, things like infrastructure and energy transition. That is one example of us moving beyond our existing client relationships. Second, we're building out our leading position in real assets. To sort of put that in plain English, we're really doubling down on real assets, which is our core business. A way to sort of bring that to life is that our green fiduciary AUM has increased four times over the last three years.
It now sits at just under $20 billion of AUM, was about $5 billion three years ago. That commitment to fiduciarize the Green Investment Bank and bring in that fiduciary capital to allow us to scale that up is working and working very well. Thirdly, we continue to scale and optimize our other investment capabilities. A good example of that is our real estate offering here in the U.K., which is a differentiated offering. One of the things we're doing is working with specialist operators like Goodstone, which is a build-to-rent platform, which is addressing the undersupply of housing in the U.K. with our support. What they're aiming to do is to construct 5,000 quality attainable houses over the next sort of three years or so.
That is a good example of us really bringing dollars in to meet unmet community demands and drive returns from building new capacity. In terms of the market opportunity in EMEA, we believe it is compelling and has a long way to go. If you are like me and consume a lot of business media, this is not the narrative always associated with Europe. While there is no doubt that Europe does need some reform, we think it remains an incredibly attractive destination for investment. There are a number of reasons for that. One, I think, first of all, it is a deep market. It is a market that has generated returns. It has a good talent pool, and it is also very well regulated.
I suppose the way I think about it and the way I talk about it on Bloomberg, and sometimes feel like the only person who's speaking up Europe on Bloomberg, is this: there are 195 countries in the world. About 25 of those attract the vast majority of private investment every year, and that's been the same 25 for the last 25 years. More than half of those markets are here in EMEA. While there's a lot of focus, quite understandably, about the world's biggest economy, and that does remain a very attractive destination, the US, our job is to look beyond the noise. When we look at EMEA, we see a marketplace that has this proven track record of investment, but most importantly, a proven track record of realization. We also look at a region that is very attractively priced.
From that point of view, we think that there is a long way to go to EMEA, and the teams will talk about that a little bit more in a moment. I suppose the other way to think about that is that Macquarie Group has deployed GBP 60 billion—sorry, GBP 60 billion—since 1999 in the U.K., and we've committed to deploy, as Rachael said, I think, on Monday, another $20 billion. It is not just in digital infrastructure. Yes, that is an interesting sector, but it is across energy, it is across transport, and so on. The reason for that is in not just the U.K., but more broadly in Europe, certainly the markets that we are operating, all the big thematics, whether it be deglobalization, decarbonization, digitalization, or demographics, are as present in these markets as they are in other regions, whether it be the Americas or Asia.
When we think about what is MAM good at, it's actually good at finding opportunities over the medium to long term that are associated with the big thematics of the world. We are a thematic investor, but most importantly, we're a thematic investor that is not just focused on finding opportunities in the right neighborhood. We're focused on finding houses in the best streets that we can make much more valuable, and where our neighbors embrace us investing as opposed to complain to the council. I think if you're from Australia, that would resonate with some of you. We remain really confident about the region.
We acknowledge that there are areas of the region that do need reform, but having been here for a long period of time, having navigated these markets and dealt with many different stakeholders, we feel very confident that we'll be able to continue to realize opportunities for our clients and deliver for shareholders. In terms of then today's roadmap, we've curated a discussion over sort of the next 45 minutes or so that hopefully brings to life MAM's strategy, but in the context of EMEA. We also have two of our global group heads here, Lee Harrison, who runs real assets, and Phil Peters, who is the head of client solutions. They are not presenting, but they're very excited to answer any questions you have, either here or later at dinner. With that, let me now pass to Gillian and Rafa, and thank you.
Thanks very much. One of the things I always say I like about my role is that I'm always learning new things, but fiduciarize is a new word to me. Thanks, Ben, for that one. About 25 years ago, I was based in Sydney working at Macquarie, and I got itchy feet. I said to my manager at the time that I really wanted a job in London. I wanted to move to London, and I wanted to have a job, a client-facing role in investment management. What he told me was, unfortunately, we do have an office in London, so that's good, but we don't have a funds management business there. Unfortunately, I had to leave the firm. Happily, my story at Macquarie didn't end there, and I rejoined about 10 years ago here in London.
Today, I'm part of the Client Solutions Group and lead our partnerships with clients in the U.K. and Ireland. The Client Solutions Group has accountability for establishing and managing our relationships with clients. Today, Raffaella and I would like to do three things. First is to cover off our footprint in the region. The second is share where we're focusing our distribution efforts, both in terms of the channels that we're focused on, but also the markets and how we're positioning ourselves for growth. The third is to try and bring that to life with an example of a client partnership here in the region. Let's start with our footprint. You've heard from Ben about our assets managed in the region, but what about the assets we manage for clients in the region?
More than 400 institutional clients have entrusted their capital with us, investing in our capabilities that are managed across the globe. It's worth noting that the capital that we manage today for our clients is the result of many years of reliable, strong investment outcomes and delivering those for our clients, not just in private markets, which we'll talk about, but public markets as well. It really is the bedrock for our businesses. Here are the assets that we manage for our clients in the region. I know in the past you've heard about capital that we've sourced from Asia to invest here in EMEA. That's not what this is. This is local capital. From our partnerships with asset owners here, that's managed both here, but then exported as well to our investment teams around the globe.
Ben talked about the foundation being real assets, and that's certainly the case in terms of assets under management for clients here as well. As that pie has gotten bigger, we've diversified into credit, equities, and multi-asset and real estate as well. The second point to note is, somewhat like Asia, EMEA is not a homogenous market, and that may be a theme that's come out through the last few days. Our client partners are in 30 different countries around the region. Whilst the EU, even post-Brexit, provides some commonality, it really is important that we have that local knowledge of the markets in which our clients operate and literally speak their language. You'll hear from Rafa later about the number that she's racking up on that front. This just positions us really well to bring those global capabilities.
We represent the whole MAM platform in the region to our clients. Moving from a client lens to more of a channel focus, most of the capital that's entrusted with us comes from our long-standing partnerships with pension and insurance consolidators. A sample of our clients in both spaces are at the bottom of the first two columns. The good news is we've got that depth already, having established relationships with a significant number of consolidators of pension assets in the region, and we're optimistic about adding a few more by the end of the financial year. Similarly, in insurance, our footprint is strong. People are often surprised when we tell them that we're a top 10 third-party manager of balance sheet assets for insurers here in EMEA. We certainly don't see their appetite for private markets particularly abating anytime soon.
We're pleased with the progress that we've made in these channels, but we're also optimistic about the room for growth. You'll hear more from Raffaella about that too, from deepening the partnerships that we have already. We've got a case study on that a little bit later, but also establishing new opportunities with new clients. There's also an exciting and evolving pool of capital here in the region that we're really only at the beginning of our journey on, and that's wealth. You've heard from Ben about some of the products that we've established there. Why are we doing that? There's 6 million high-net-worth individuals in EMEA with an aggregated wealth of $19 trillion. There's an additional 7 million individuals in Asia. That's an additional $26 trillion of wealth that they have, and they're generally underallocated to private markets.
You're probably thinking, "Why am I mentioning Asia?" A number of the large private banks, some on the bottom of the third column there, have hubs here in the region where they make decisions about both the managers that they're going to partner with, but also the capabilities that they're going to end up distributing to their clients in Asia. It is a key market from a wealth perspective, and it is a significant opportunity for us. You'll hear a little bit more both from Maks and from Tom later around some of the product that we've developed that's dedicated to that channel. We're also excited about extending and growing our footprint in parts of EMEA where we've just not been as active for as long. Pleased to hand over to Raffaella to take you through that.
Thank you, Gillian. My name is Raffaella Copper, and this is my 20th year at Macquarie. I actually spent my first 10 years working in the real assets team, and the very first investment I did was in Rome Airport back in 2005. I am really excited to be out there on a runway again, so looking forward to it. The second 10 years of my career, I spent in the Client Solutions Group, focusing on Italy because I grew up in Rome, but also then extending the coverage to other southern European regions. Today, I lead Southern Europe and Israel, and that is a region that includes Spain, France, Italy, and obviously Israel.
Some of the things I wanted to talk to you about today are some of the themes that are present in my region, the first of one being exploring the unexplored, and Italy is a really good example of this. In my mind, fundraising is about getting to—it's basically a numbers game. It is about getting to know as many people as possible, telling our story, understanding the clients and their investment needs, and also building relationships with them, and then trying to find solutions for those needs and matching our strategies with their investment requirements. Italy is a good example of that. As I said, our first investor had historically invested EUR 3 million into a EUR 1.5 billion fund. Although this was a large investor, it was a very small toe that was put in a very small puddle.
What we did when we started focusing on Italy is actually broadening and deepening that client base. Today, we actually have 53 clients that have committed about EUR 4 billion into 16 different strategies. That market is a market that is exciting on the wealth side as well. Our biggest client is a EUR 500 million ticket. The smallest is a EUR 5 million investor, and we have pretty much everything in between. That includes insurance companies, pension funds, religious institutions, asset managers, and bank investors, but also bank foundations, which are a specific Italian type of client. One of the things that I think is also interesting about my region is that sort of the speed of deployment is also quite different. The shortest investment took three weeks from pitch to signing.
The longest is seven years to date, but there's a few prospects I'm still working on. That's probably going to be 10 years when they invest, and that's going to be a big party for sure. Another theme that's present in my region, and that can sound obvious, but it actually isn't, is that because it's such a diverse region, not only do we need to speak different languages, and I'm trying to learn my number six, but also we have to approach different investors differently, not just by region, but also sometimes in the same region for different types of clients. I think another example of the same with Italy is that, for instance, 10 years ago when we entered the Italian market, private markets wasn't really a thing, let alone infrastructure.
We spent a lot of time educating the client base, talking to them about infrastructure, why we like airports, why we like regulated utilities, what role infrastructure has in a portfolio. I think that we did through various initiatives we call the Infrastructure 101, which is basically where we almost do a sort of university-like session, and we talk about the different asset classes, but it's also about open-ended funds versus closed-ended funds, secondaries versus primaries. A lot of work in there. A funny story is that we decided last year to do an event dedicated to the younger people with the clients to sort of get the leadership of the future excited about infrastructure.
We threw a 40 under 40 event, and my clients would joke with me and say, "No chance you're going to find 40 people under 40 in the Italian market." We had to make some exceptions, but he was wrong. It was a really good day, and we ended up with a site visit to our Italian Toll Road investment. Hopefully that sets the basis for future cooperation with some of these investors. Another story is in Spain, where we had a historic relationship with a big insurance company. They owned a wealth manager, but neither of these two investors had ever invested in infrastructure. They had a presence in real estate. Together with them, we basically created a program by which the wealth manager ceded by the insurance could create a fund of funds that just invests in Macquarie products.
That fund has invested across four different infrastructure strategies, two co-investments, and we launched a fund to their wealth channel and raised EUR 600 million from over 100 clients. That I like to think is the pioneering baby steps into wealth because that was done in 2020 through COVID. Actually quite a different environment to be fundraising in. Suddenly used Zoom quite a bit. There are plenty of stories in my region about this, and I'm sort of happy to take you through more over dinner. I think the most exciting part, apart from airports, is certainly the fact that there is a lot of growth in my region. There is another trillion dollars to go for. I think there is plenty of chance to go broader and deeper. That is pretty much what I do every day with the team that helps us.
Moving from sunnier locations to slightly more continental ones, Gillian and I are now going to talk to you about a case study of a client that we had in Central Europe. This is a client that had very, very large investment requirements. They particularly wanted to partner with somebody that had experience in private markets, but also who could help them deliver climate solutions. The problem they had was that their investment team was quite limited in terms of people and resources. What we did was work together with them to try and develop a long-standing partnership and solutions. Gillian's going to tell you a bit more about that. I will take you on the journey which is depicted in the graphic on the right-hand side.
I guess it started about seven years ago when we had a meeting with the client, and the meeting notes said something like this: "Their IC is still trying to get their head around infrastructure and renewables. Any materials that we can provide to support their thinking would be beneficial." The partnership began there, and we increased our knowledge of what their investment objectives were, and equally we're able to share our knowledge. That ultimately resulted in that first commitment into core renewables five years ago. That journey has continued and evolved, and we've continued to support them leaning into our deep expertise and knowledge that comes from senior management, from our investment teams, from our research teams, sustainability teams, and of course the Client Solutions Group, including our co-investment team.
Now, the partnership has resulted in a further five commitments, bringing it to a total of EUR 2.5 billion to date, again to renewables last year, but also into infrastructure debt, energy transition, and most recently, they've anchored our European mid-market direct lending strategy, which we've fiduciarized, to use Ben's word again. You'll hear more about that from Peter and Tom shortly. We took the opportunity to formalize that partnership, really recognizing it both in terms of scale and potential back at the end of 2023. That was an important milestone, but really it's only the beginning and what we expect to be a really long-term partnership with this insurer. With that, I'll hand over to Martin, Gabriele, and Maks.
My name's Martin Bradley. My job's to talk to you about real assets today and our business in EMEA. I lead our infrastructure business here, so assets like this fall under my remit. I'm joined by Maks and Gabby, who's going to go through different bits of our operations, both on the infrastructure and the green investment side. My agenda today is to try and take you through scale, what our business looks like, talk a little bit about how we've grown it, talk a little bit about how we approach the market, and then finish up, try and look forward in terms of opportunities and where we see growth. I'm going to try and weave in for that a couple of themes, a couple of topics, because they are important to us and they do help us succeed.
Number one is when I talk scale and size, I mean breadth. I mean depth of our footprint here. Secondly, when I'm talking about investment, we're thematic, and it's a very trendy word. What it means is we focus on a number of sectors, and we try and be industrial-like. Capital is available for most businesses. Bringing that capital together with know-how and expertise makes it more potent. Finally, I'm going to try and be consistent. I'm going to talk about consistency because I want to talk about relationships. I don't want to talk about trust. Having that consistency is pretty important to us with the size of business we have in terms of setting our footprint, our agenda, and getting people to work with us. If I can go to the first slide, I know a lot of you have seen this.
I didn't quite appreciate how much of this was going to be covered in the video, but I'll go to the first point of scale. We've got a couple of key stats here: EUR 147 billion under management. That's about half our real assets business globally being managed here in the region, 49 companies, 16 countries. That is a really, really big industrial footprint. It means something to the countries we're in. We've been here for 25 years. It isn't an accident that we've got to be that size. We've grown it steadily over time, and we've incubated businesses here. That's also important. Gabby's going to talk a little bit about that. It's her job to get these businesses invested and make them grow the Macquarie way. Why incubation is important? From your point of view, it allows us to do new things.
It allows us to go into spaces. For example, our Super Core Fund that we incubated here in the region was the first long-dated open-ended fund that had happened in infrastructure. Ben mentioned a few topics before. Gabriele and I are both working on healthcare. That's a very exciting space. Again, we're driving that investment into healthcare from the region. That's important because as we open up the new sectors, it gives us a chance to get these investments done before they become crowded, before they become over-invested, and then we can develop the knowledge, the expertise, and sort of create alpha for the next generation of investors. As we grow this platform, as we have this scale, we become relevant to the region.
What I mean by that is the durable nature of our platform, of our existence, of our business, and our relevance to countries. Rachel talking about the U.K., one of the biggest markets in Europe. We're one of their biggest investors and partners at a government level. Now, I'm very proud of our business. I've been here 12 years. I've worked with Macquarie 23 years, so almost since they first arrived in Europe. One of the things that goes hand in hand for me in terms of our activities, I talk about my second life CV, is our social responsibility. It is a privilege to be a market leader and as large as we are. In fact, as much as any market we're going to talk to you about, we are dominant in this space in this region. It's got to come with social responsibility as well.
As we work with our partnerships, as we work with governments, we have to make them see that we are a responsible investor. How did we get here? We grew it over time. There are two things happening on this page. First page is our Macquarie European Infrastructure Funds, the MIFs. It is the main fund we use on a regional basis, and it is a picture of its growth over time. I am going to spend the start of this talking about the other side, which is the distribution of the investments within that fund into different sectors. Two sectors stand out. You have two development sectors. I talked about Gabby getting involved later, waste and essentially healthcare, where we are investing and growing in the region. We are already very large in waste in the U.S., so we are importing a lot of that into Europe. The other side is utilities.
I'm going to dive in there slightly and talk about a company called Open Grid, our gas company that we owned in Germany. The reason why I'm picking on it is it links nicely into these funds. We bought Open Grid in 2011, 2012. Just post GFC, we bought it in MIF4. MIF4, EUR 2.7 billion fund. OGE was a EUR 250 million investment. Roll forward 10, 11 years. We sold OGE when we were launching MIF7 at EUR 1 billion for our share. Four times growth over that period for that asset. Growth through our investment, of course, but also because we were in the right thematic over the period as Germany was building that asset out. The growth of that asset is denoted by the growth of these funds. We've curated the size of these funds so as they meet the opportunities in the market.
What you do not see from this is MIF7 has a co-investment vehicle, so it is a bigger fund than what you see here. We work with our LPs and provide opportunities for them to invest alongside us and manage their capital outside of the funds. That MIF7 is the largest fund ever raised in the European market. That is quite exciting for us. Underpinning it is something like a 70%+ re-up. People who have invested with us before who want to invest with us again. Now, why do they do that? It goes back to the next topic, which is consistency and trust. They trust us to deliver that diversified portfolio, that regional presence. They trust us to have people with expertise on the ground. They trust us to be an industrial partner who has more knowledge than they do in managing that asset deliver alpha.
They trust us to be resourced so that when the markets are difficult, we can get people on the ground and make sure that we're managing that risk. Most importantly, and not missed by our investors, is that 13%. They trust us to deliver the returns over the long term. They've got experience of working with us. We've been managed to be able to do that, come rain or shine, and they look for us to manage their money on the long term on that basis. That dry powder that they give us is really important for what we're trying to do. Thematic investing is a great phrase. It comes through a couple of themes. Long term, complexity. If you're going to be an industrial expert in your space, you need to understand the complexity of those businesses.
You can't sit and roll back and just hope that it works out, especially in these markets. That means you need to invest, and we're constantly investing in our infrastructure partnerships. We've got a new PPG group, I'm sure Gabriele will talk about, and they bring us external expertise. Maks will also cover a lot of this when he's talking about GI and how GI is a really deep developmental platform for us. Having the largest footprint in the region, having been here for 25 years and trying to work on sectors where we provide depth, has an output. The aspect of that output is our relationships. We have better bespoke relationships with corporates than I would say almost any other investor because we are so large and so focused and so concentrated in space. For example, we're probably the second largest manager of regulated asset bases in Europe.
We speak to other utilities as a peer. Why is that important? Because 70% of our origination comes from those relationships on a bilateral unique basis. That is a fantastic place to be. I'll give you two examples to try and bring that to life. National Grid. National Grid sits on the U.K. Stock Exchange, would see itself as one of the blue blood companies on that exchange, has been there for a long time, sees itself almost as ex-government. It was divesting its gas business, which was a large portion of its operations, and it launched a public process. U.K. launches public process into the market to sell a big division of its operations. Had a number of bids.
Halfway through that process, they turned to the board and said, "We want to pivot away from continuing this auction with the four bids we've got, and we'll work exclusively with Macquarie." That's a gamble. Big PLC utilities don't gamble, so there must have been a reason they get comfortable with that. I like to think it was twofold. Number one is when we met them and talked to them about the gas business they had in the U.K. and the complexity, this was done over two phases over about three years in terms of transaction. They were better placed to work with us because we understood their business than they were to try and run it with people they didn't know. They made that decision. Secondly, we've been around a long time. We've worked with them previously. They trusted us. That famous phrase of trusting.
If we had just turned up first time, that would not have happened. They closed down the process. They worked with us. The other end of the scale is a wonderful business called Best In Parking. It does what it says on the tin. They dominate parking in Austria and northern Italy. Family-run business. We deal with the son of the founder. He is very, very, very proud and very enthusiastic about his business. So much so, he built his apartment on top of the car park in the middle of Vienna. This is a very fanatically passionate individual. The family business needed to transition. It needed a customer offering. It needed technology. It also needed to deal with EV and transport into more of an ESG environment. He wanted to grow the business up, so he needed a partner.
Now, when someone's that passionate and ownership and created a business, he felt a sense of responsibility. He wanted someone who could bring more than capital. Shared his passions, understood his business, worked with him. He came to us and we worked on a bilateral basis. He didn't approach any other investor. Gordon's at the back. Gordon is a big lover of car parks. He's managed to. He's been the CEO of one. Unfortunately, I don't spend as much time with them talking about car parking as I should, but they both have a great love for that space. We've been busy over the period. We've bought five companies. We've managed a lot of upheaval in the region over the time. We've sold five companies.
Now, in the most recent of those companies, you hear all the noise, but actually, we've been really successful where we've made those full divestments. We've realized 19% IRR, 2.7 times money-to-money multiple. Finally, just talk a little bit about the opportunity going forward. In an earlier slide, I talked about four times growth. I talked about sectors and thematics. These are our key sectors. These are growth potentials. I don't wake up in the morning worried that customers and retailers and the mom and dads are going to come and use our assets. They're coming. My job is to create more space, more capacity, more opportunity for them to find us. These growths are long-term growth. Coming at it quickly, just coming into the market and saying, "I'm going to do this," is difficult. Cadent, our UK gas business.
We replace the small bore aperture pipes to the home. Project started in 2000. It will finish in 2030. A 30-year project. We will replace 70% of the capillary network. Why is that important? It is important from a health and safety point of view. It will move the U.K. to have one of the most safe networks in the world, certainly in Europe. It also makes the U.K. hydrogen-ready, and that is a big space for us. This investment, long term, to bring these networks up to speed with what society needs in the future. We are not changing our plan. Consistency. We are going to stay with this. These are our North Star, our unmet, uninvested societal needs. They guide what we do. They are our compass on our ship. I am going to finish one other thing because I am stealing some of Gabby's thunder. I talked earlier about incubation.
One of the growth sectors, and because we're in these big thematics, doesn't mean we don't evolve. Healthcare. Since COVID, healthcare waiting lists have gone up five- to seven-fold. We look for opportunities now in that space where we can bring our capital to support what society needs. Wonderful people who work in that space. We know nothing about medicine, but we also don't know how to fly a plane. We can build the box. We can manage the box, and we can help them with the aperture. Investment does that. What's happening in Beacon Hospital, and I sit on the board because I'm interested in what they're trying to achieve. What happens in Beacon Hospital is we've taken down a hotel. We're putting up a ward. We're doubling the size of beds. Why?
Because we're going to increase the aperture of the theaters from 8 to 12, which allows them to bring more patients through, more people having important operations, more capacity within our facility. We're very proud of that journey, but I'm going to use that as a segue to hand off to , talk a little bit about that investment where we make impacts elsewhere.
Yeah, thank you, Martin. I'm equally excited about the healthcare space. It's one of my coverage areas. Pleasure to be here today. My name is Gabriele Duesberg. I lead our diversified sector team across the real assets platform here in EMEA. Besides healthcare, that includes waste management. Doesn't sound too sexy, potentially, for people. I think of it as turning waste into opportunity. Creating opportunity and creating value is really my day job.
I want to use the next few minutes to talk you through and bring to light how we think about value creation and how that's differentiated to our peers. When we buy businesses, we come in and we build a value creation plan from the outset. That's a set of industrial and operational initiatives that we drive through the ownership of the asset to maximize value. We build that plan through our due diligence. We then come in and retest that with management post-close of any acquisition because we really need them to own it. We then closely work with the management teams to deliver that over the life cycle of the assets. How do we do that? I would say really three points that make our approach unique to creating Alpha. Number one is we leverage our global platform. We share learnings.
We share knowledge across the cloud. That's tremendously important, and I'll come back to that. Number two, we have a central group called the Portfolio Performance Group that sits alongside our investment teams. That's a group of slightly older, I should say, politically correct, seasoned individuals with a lot of industrial expertise and subject matter expertise across transformation, IT, cyber, procurement, who drive specific initiatives across the portfolio, across the different assets. That's hugely valuable. That was a conscious decision from our side to invest more into specialist skills as part of this PPG team. Thirdly, we have a fantastic network of operating partners.
Typically, we bring an operating partner on board who's an ex-executive in a specific industry with local market knowledge to help us drive specific initiatives or sit on the board and challenge and guide and coach the management teams. On the slide, to bring that to life a bit more with specific examples, you see on the top in green, we show examples where we have invested for growth. I pick Farnborough Airport here, given the lovely surroundings, as a great example. From the outside, we had two hangars. We invested into increasing hangar capacity with a third hangar by 73%. That, of course, allowed us to increase traffic at the airport and drive the top line and thereby ultimately the bottom line.
That is a great example that shows everyone has capital or a lot of our peers have capital to do that. What is really required to do this on time and on budget is the industrial skill set that we brought. At the bottom, you see in blue where we have driven operational initiatives. I will pick bottom right, the Currenta example. That is our chemical park that Will Price talked about in the opening video. We identified here in 2024, $100 million of EBITDA improvement initiatives. We set out a plan to deliver that by 2026. Year to date, we have already achieved 70% of that. I want to talk about one more example. That is Beauparc, very close to my heart. That is waste, our first waste asset here in Europe. That is a fantastic case study, really, for bringing the global collaboration to life.
For context, we're the leading asset manager globally in the waste space. We were early movers into the space. We invested in 2008 in the US, which since deployed more than $7 billion across the globe. Being early to the space has really allowed us to get ahead around the business model, understand the key value drivers, build deep operational expertise, and apply that through different economic cycles, which has given us great learnings. In 2021, we used the knowledge of our US presence to invest here in Beauparc in Ireland. We've then expanded the business into a leading position also in the U.K. We've invested more than EUR 200 million into nine add-on acquisitions. These are typically one to two turns below the multiple that we pay for the platform, so that's immediately accretive. We've also invested into greenfield expansion, into additional recycling infrastructure.
That has resulted in a 42% increase in EBITDA since acquisition of the asset. We are currently tracking a two and a half times money multiple, and that is before any further re-rating at exit, for which we have a great track record. To close the loop on the global platform, Europe is at the forefront in terms of recycling infrastructure and build-out regulation, a push towards circularity. We have used the learnings that we had across the Beauparc asset base to bring that knowledge back into our global assets and drive new revenue streams there, build out new recycling infrastructure in those assets. Hopefully, that brings to life a bit how we generate Alpha and how that differentiates us. I will hand over to Maks to talk through green investments.
Thanks, Gabriele. Good afternoon, everyone.
I'm Maks Dadej , and I look after portfolio strategy for our renewable energy strategies here within MAM. I've been with Macquarie for about 16 years, and I'm incredibly proud to talk to you about our green investment team and the success we're having in scaling our green strategies here. As you've heard today, it's all about team, track record, and performance. We've been investing in the sector for over 20 years, and it really has allowed us to develop one of the largest and most experienced teams in the market. Importantly, the team brings together what we think is a differentiated track record across over 100 transactions, including 60 realizations. This sustained level of success has allowed us to build a globally scaled green energy platform and become a partner of choice within the industry.
We believe the sector is entering at an exciting point of acceleration and evolution in which globally scaled participants with deep sector expertise can consolidate the market and capture higher value. Global energy customers are increasingly wanting trusted partners that can deliver assets at scale. This is changing the nature of those interactions and the value that global scale and deep relationships can bring. We have a team focused on understanding the customer needs, and today we are fortunate to call nine of the 10 largest buyers of clean energy globally our clients, which includes the likes of Amazon. We initially invested in the sector through our traditional diversified infrastructure strategies. However, as the market opportunity evolved and grew and client demand for dedicated green strategies increased, we saw an opportunity to play an increasing role in providing solutions for that client demand.
Our first dedicated strategy was a renewable fund focused on U.K. offshore wind, which played a leading role in making the U.K. one of the leading offshore wind markets in the world. Since then, we've expanded our suite of products to provide both institutional and wealth capital broad access to the energy transition opportunity. Today, as a business, we are focused on scaling three established strategy lines. Firstly, our global open-ended renewable strategy that is focused on accelerating the build-out of renewable energy and storage to meet the growing energy demand. This strategy allows us to capture the multi-decade growth agenda of renewables, but in an open-ended structure that allows us to create scale and capture those consolidation opportunities that I mentioned. We also have our global energy transition strategy that is focused on beyond renewables and looking to decarbonize transport industry.
This is a higher return strategy with a focus on delivering the next phase of the energy transition. Lastly, our global wealth strategy brings together our leading investment capability, but into a structure that is suitable for the wealth market. All of that focus has allowed us to grow our global AUM within our dedicated green strategies from $5 billion to $19 billion over the last three years. That number is as of December 2024. Since then, we have actually seen continued strong momentum within the business with additional fund closing, as well as completing on our $1.7 billion investment into D.E. Shaw Renewable Investments, which is one of the leading businesses in the US and actually represents our largest ever investment within the renewable portfolio.
This activity is also bringing new clients to the MAM platform, with around 25% of our investors being first-time clients to MAM, as well as broadening MAM's participation in the strategic wealth market. We are pleased with this progress. What excites me personally is the significant growth opportunity ahead and the impact we can have across the broader industry. Few sectors are evolving and growing as rapidly as the global energy transition sector, and Europe remains at the forefront of that activity. Despite some of the recent headlines, if you do look past the noise, the market is accelerating and demand for clean power and broader energy transition solutions is increasingly being driven by the customer, not governments. We are seeing a step change in demand for power coming from electrification, a growing middle class, the growth in data centers, and more recently, AI.
Renewables is well placed to meet this demand as it has become the cheapest form of new electricity generation in almost every major market in the world. This phase is also starting to see the convergence between the digital and renewable sectors, which we believe presents new opportunities across our platform to unlock additional value. Europe represents our largest market given its relative size and maturity. We currently manage 17 investments here in the region across our established strategy lines. This scale and broad coverage allows us to develop deep insights and relationships to identify the right opportunities, manage risk, and drive performance for our clients. Some of the recent highlights across the portfolio here within the region include securing permitting for a 780 megawatt solar project in the U.K. We think that's the largest solar project in the U.K. that's permitted.
We're progressing construction on one of Europe's largest battery gigafactories in France, supported by a long-term commercial arrangement with Renault. I know you heard more about that on Monday. We're moving to the advanced stages of developing one of Europe's first dedicated sustainable aviation fuel production facilities in the Netherlands. We've recently submitted development planning for one of the U.K.'s largest offshore wind developments. That broad activity really enables us to be at the forefront of the sector, develop deep relationships, and position us as a partner of choice within the industry. That is unlocking interesting and good investment opportunity for our clients.
A great example that we as a team are incredibly proud of, and one which we think showcases both the power of the platform as well as the direction in the sector, which is increasingly being led by the customer, is our investment into Hydroplane. Over the last eight years, we established a deep relationship with Norsk Hydro. This is one of the world's largest aluminium businesses, and it's seeking to decarbonize its operations to create low-carbon aluminium for the likes of Porsche and Mercedes-Benz. We started this relationship by contracting clean power with Norsk Hydro and demonstrating our capability to deliver renewable assets to support those agreements.
Based on that experience and trust, we're able to ultimately expand this relationship and become a joint venture partner into Hydroplane, a leading renewable energy business launched by Norsk Hydro that is focused on delivering clean energy infrastructure to decarbonize Norsk Hydro's operations. That business has had strong growth since inception. It's up to 700 megawatts of operational renewable capacity, delivering over $4 billion of contracted power to help support the decarbonization of the aluminium industry. That is a great start for that business, but we are incredibly excited to continue to grow that business and have the opportunity to play a role in driving industrial change in one of the most power-intensive industries. I hope that provided a good overview of the team, our business, and the opportunity that we see ahead. I'll now hand over to Peter and Tom to provide an overview of our credit platform.
Thank you.
Hello, everyone. Good afternoon. It's great to be here with you. I'm Peter Glaser. I head our credit division here at MAM, and I'm joined by Tom van Rijsewijk, who is the head of private credit here in EMEA. We're pleased with this opportunity to be able to discuss both our global credit platform and then take a deeper dive into our activities here in EMEA. Now, you heard Ben mention earlier that the average ED at the firm has 16 years of experience with the firm. I come from the opposite end of the spectrum, having joined the firm in 2022 after over 30 years of experience in finance and investing in New York and London. Since joining the firm, I've really been impressed by our platform and what it can deliver to our clients and ultimately to our shareholders.
I think and hope you will be as well as we go through it. You'll see that it's scaled, it's broad, it's deep, and it offers a nice complement to the market-leading real assets platform that Martin and the team talked about. Let's start with an overview that you can see up on this slide. It summarizes our global scale. You can see over or about $350 billion of assets under management, and that's managed by 200 investment professionals supported by about another 300 strategic partners that help us deliver results to our clients. Of note, this team, as you see it there, only came together in 2023. That's when we combined our leading private credit and fixed income platforms into this single MAM credit focus. Our goal was to be a top credit provider to clients in a world that's seeking more from fewer for less.
The result is a platform that spans the liquidity, risk, and return spectrums, offering clients a full range of strategies and solutions across private credit, leveraged credit, and fixed income. As I reflect on my time at the firm, I recognize how compelling a starting point this platform is. It has a team with global presence and capabilities. You can see a list of our major offices in the upper right. We have a range of strategies that matter to clients. Importantly, we have both the appetite and the resources to grow our business. I, and I think we all, feel well positioned to continue to deliver returns to clients and grow this business. You can see, as we peel back further, a lot of information on this slide, and that is because there really is a lot going on with our business.
You can see that full spectrum from fixed income through private credit that I mentioned. You can see a range of strategies across it. Some are long established and large. Others are newer and scaling. Of course, you'll see there's some targets for future effort up there as well. Perhaps most interesting on the slide is our path for growth. You can see that by the various color coding. We target, first and foremost, growth areas where clients want us to invest on their behalf, where we can deliver, and then, of course, in markets that are deep enough to make the efforts beneficial to the firm and to our shareholders. A couple of points that I would point out on the page. If you look on the left in our fixed income area, you can see our global fixed income business that's based in Australia.
It's approximately four times the size of our next leading competitor. It delivers fantastic performance to clients, and it's really terrific business. On the other end of the slide in private credit, you can see our infrastructure debt business. Tom will go into that in more detail, but it is the number three infrastructure debt platform globally. Not only is it large, it's also very good. For instance, we were recently awarded Infrastructure Debt Manager of the Year by Alternative Credit Investor. Also in the private credit, and I'd note our direct lending strategy. Jillian mentioned that to you. Tom will talk about it a little bit more. That's a new initiative in partnership with Macquarie Capital Principal Finance that offers clients the ability to invest alongside our balance sheet in the US and EMEA. We have an experienced team.
We have over $20 billion of direct lending on our balance sheet, and we have a terrific track record. We think this offers up some of the most compelling alignment that's available in the market to clients. Perhaps more germane to some in this audience is what's going on in EMEA. Let me share a couple of thoughts before I turn it over to Tom. Firstly, we have an experienced team of 60 professionals that's managing approximately $40 billion of growing AUM on behalf of our clients here. We are a compelling provider of a range of private capital solutions that you can see on the left-hand side of the page. This includes the number three infrastructure debt platform. I mentioned that already. It has a fast-growing secure income real estate business that has expanded beyond its U.K. heritage and has recently made investments in the U.S. and Spain.
We have a newer scaling asset finance capability that's an important growth area for us. Of course, we have the European portion of the direct lending platform that I noted earlier. With that brief introduction of our global platform as well as our EMEA team, let me turn it over to Tom, who's going to take you into a deeper dive into our activities in this region.
Thank you, Peter, and good afternoon, everyone. My name is Tom van Rijsewijk, and I head up the infrastructure and investment-grade private credit MAM here in EMEA. I'm very pleased to meet many of you today for the first time, and I really appreciate the time to talk a bit about our private credit platform in EMEA. We have built up our private credit platform within Macquarie from the ground up since 2012. I personally joined around the time of its inception.
I've really enjoyed the growth journey working with the team to create the platform that we have today. I'm also really excited about some of the opportunities that lie ahead of us, and I hope I can share some of that excitement with you today. As you would expect from our heritage, our first product was infrastructure debt. This has been very successful and remains a core part of our business today. For our clients, these strategies offer an alternative to investment-grade fixed income with a higher return in private credit whilst maintaining a similar credit risk profile. In FY 2023 and FY 2024, we expanded our capabilities with secure income and real estate and structured credit. These strategies share a common client base with infrastructure debt.
For many of our clients, investment-grade private credit is an important focus area because they can invest large portions of their balance sheet into these strategies. By investing more into private credit, they can greatly enhance their overall return on capital. Recently, MAM also established InEvo RE, a reinsurance company. This will allow us to generate more value with current capabilities by not only investing for our existing clients, but also for InEvo Re, and therefore creating the scale and growth. We are also active in higher-yielding private credit strategies. As Peter mentioned, we have recently launched our direct lending strategy. This is a partnership between MAM and Macquarie Capital, who have a long and strong track record of investing into these strategies. I am already starting to see investor interest in investing with us into these strategies. In recent years, we have also grown our high-yielding infrastructure debt capabilities.
I expect this to be a major driver of the future growth for our platform. When I talk with investors globally, I see a strong interest in high-yielding private credit. What they can do with us is investing in a differentiated infrastructure debt strategy where we can use Macquarie's overall expertise in infrastructure. Now I'll talk a little bit about our infrastructure debt platform. We are ranked number three globally, and approximately 90% of our AUM is managed out of here in EMEA. That gives us a very strong presence in the region and also creates growth opportunities in other regions, such as North America and beyond. We have a large and experienced team, and we have made over 180 investments, and we are therefore very well positioned to benefit from the macro tailwinds of digitalization, decarbonization, and demographics.
Our clients have been very supportive with ongoing investments and re-ups, which have formed the majority of the client commitments over the past two years. I am also seeing interest from a new group of potential clients in the private wealth space, especially for our high-yielding infrastructure debt capabilities. Its return characteristics and distribution yield make it a natural fit for this market, and we can combine this with Macquarie's strong brand and infrastructure, which gives us an advantage as we enter into these markets. Finally, I would like to present a brief case study. This is a picture of a project Verday, which has been really exciting, and I really enjoyed working on it. It is actually a mock-up of a site that is currently under construction in the north of Sweden with thousands of workers on site.
This is about the steel industry, which is a significant carbon emitter. By changing the production methodologies, the carbon content of steel can be reduced by up to 95%. This project will do that at scale in three phases. First, it will use renewable energy, which is available in the region in great volumes at an attractive price, and turn that into green hydrogen. Second, it will use the green hydrogen to turn iron ore into iron. Third is a conventional plant that turns the iron into steel products for the European industry. This is a multi-billion project that is currently being constructed. I personally really enjoyed working with our senior and seasoned experts to get comfort around the construction risks.
That the management team, the shareholders, and the contractors have the right expertise, capabilities, and resources to deliver this project within the timelines and budgets required for us to have a successful credit investment. I personally also really enjoyed working with our colleagues in CGM, where there are teams that have decades of experience of trading and investing in markets such as steel, power, and carbon, which are critical for this project. They helped us validate our commercial underwriting assumptions and also to apply the right stress tests to understand the robustness of this credit. We have made this investment for our climate debt strategies, which seek to invest in attractive risk-return credit investments that contribute to climate change mitigation and/or adaptation.
I believe this is a really good fit for these strategies, but also a really good fit for our strategy of leveraging Macquarie's overall expertise in infrastructure to invest for a better future. Thank you very much. I will now hand over to Ben.
Thank you. Thank you, Tom, and thank you, everyone. Hopefully what you've taken away today is we've been here for a long time. We've got materially scale assets here because we're trusted by clients to deploy their capital in this region. We've got enormous opportunity sets that allow us to have a long runway ahead of us, whether it be winning more institutional clients, moving into the wealth market, and then deploying that capital that we get from those pools across the region into a whole range of different sectors and markets.
From a real assets point of view, we are very focused on really taking advantage of the credibility from being the market leader here, but also taking that credibility with both clients and other stakeholders and moving that into other asset classes, whether it be credit or real estate. This is a really important region for us in terms of both our heritage, but most importantly, our future opportunity set. You can see there across those sort of three pillars of MAM's strategic framework, whether it's client relationships, whether it's building on the real assets heritage, whether it is scaling other investment areas, there's a lot going on and a lot of opportunity for us. With that, maybe we'll move to questions.
Right. Thanks, Ben. Thanks, team, for sharing your stories and experiences.
Hopefully, that brings to life what we're doing in the region for all our investors. We'll start with Brian. We'll work our way back, actually.
Okay, Ben, thank you very much for the presentation. Ben, just two questions, if I may.
I'm surprised there's only two, Brian, but anyway.
There's probably 20, but just one. I suspect National Grid tells us that there wasn't any lasting damage. Could you just run us through practically the reputational damage that was done to Macquarie, not necessarily on Thames Water when it was owned by Macquarie, but how do you basically manage that risk?
Sure. That is a great question. Thank you. First of all, it's always good to remember that we haven't owned Thames Water for seven years, as you're all aware.
Imagine being blamed for a house that you owned seven years ago when the roof leaked. It is quite strange. I think we've learned a couple of lessons from that. We probably could have been more on the front foot about telling our story earlier on. I think what our team has done here, particularly led by Martin over the last two years, is really to make sure that we've got the facts out into the marketplace. We're actually proud, very proud of our ownership of Thames Water. It was a much better business, imperfect, but much better business after our stewardship. We can't talk about what happened subsequently. What I would say is that Thames Water is a very good example of ability to have the courage of your convictions and look beyond the media drama or noise.
Because the fact of the matter is no regulator in the U.K. in the last 10 years has looked at Macquarie other than as a very positive owner of assets. We have not had any issue with any bank, any regulator, or government being an owner. I think what we have to accept is when you are a material player in a market like this and you are not homegrown, you do not always get the benefit of home-court advantage. We are competitive enough, mature enough to deal with that. What I would say to you is that substantively, it has made no difference to us and our ability to deploy capital whatsoever. Would we like to minimize that noise for all our stakeholders, including our shareholders? Of course, we would, and we assiduously work on that.
We have reflected on the fact that we probably should have been more proactive in telling our story as opposed to just allowing our track record to speak for itself. I can assure you that going forward, those lessons have been learned. We would probably have a slightly different approach today than we had perhaps five or seven years ago.
The second one, if I may. Just the MAM private credit business. Globally, there does seem to be a little bit of mania about it at the moment. You may disagree violently with that. I am just intrigued when we have a look at, certainly in Australia, the private credit, it seems to me there is not much discipline on basically maintaining liquidity for redemption cycles. You just freeze the fund, and there is no real, does not seem to be a lot of discipline on the mark-to-market.
Could you just run us through, A, descriptively, what you do about those two issues? The second one is there's another emerging problem where you'll have the one private credit manager that has basically lent money in different funds to different layers on the same asset. How do you manage? Presumably, you actually provide private credit debt to actually assets that you actually manage. Or if you don't?
No, we don't. Great. First of all, yeah. We have very clear rules. If we're an investor in the equity of a capital stack of a portfolio company, we don't lend money to, we don't provide debt to, the same portfolio company. Part of my job is to make sure that where a potential conflict arises before we've deployed any capital, we're very clear on who does what. As I said, we don't ever have that conflict.
We're not lending money and also investing into the same businesses. We don't do that, and we won't do that. I think your first question was about the redemption risk in open-ended funds. Is that right? Yeah. In open-ended funds. I think this, I mean, I do think this is a very important question for asset management generally. I think you're right. There is at the moment a mania about people moving into wealth. The reason for that is that it's a huge pool of capital that, from a private markets perspective, is underallocated to us. Generally speaking, wealth investors, unless you're in a private bank, couldn't access private markets. The advent of private market asset managers like ourselves becoming more sophisticated, the rise of technology, and also just an increased education means we want to access that pool of capital.
The bottom line is not all asset managers will be able to do that responsibly. Partly, it is to curate a portfolio of assets for those clients requires a certain level of scale, and it requires a real balance sheet. To put that in perspective for you, when we take, say, our infrastructure funds and we take them to a wealth distribution network, it could be owned by Nomura or UBS or Merrill Lynch or NOAA, whoever it may be, we need to be prepared from the time that a wealth client commits a dollar, that dollar has to go to work on day one. That has to immediately go to work, which is very different to our institutional clients that we could draw down over three or four years.
When you go to those wealth networks, you have to provide them with a scale set of opportunities; otherwise, it's not in their interest to distribute. First of all, actually, there is a real gating issue here is that not that many asset managers are able to, say, curate a billion-dollar portfolio for distribution from day one. Macquarie's advantage is we have the balance sheet, and we have the support from a MAM perspective of our colleagues to be able to do that. That's the first thing. The reason why that's important is that if you suddenly have distributed $1 billion-$2 billion of assets to a wealth network with the hope of growing that to $10 billion-$15 billion, you also have to have the ability to manage the liquidity risk. The liquidity risk is obviously that on a quarterly basis, those clients can redeem.
As you would be well aware, that redemption comes with gates, but you need to put in place the mechanism to support that liquidity, which again means that you either need the balance sheet or to work with banks to be able to provide you with the capital to do that. Again, that means that the people that are actually going to be able to penetrate the wealth market are going to have to have a certain scale. They're going to have to have a certain balance sheet to be able to do this responsibly. Most importantly, they're going to have to be able to size the risk from a redemption point of view and have the right policies and capital available to do that. I think, as Martin pointed out, we've had open-ended funds for some period of time.
The only difference we've really done is gone from being open-ended for institutions to now taking that into the wealth market. We've taken those learnings, but we've also brought in expertise that didn't exist in Macquarie to help us navigate that, both in terms of a distribution education point of view, but also from a capital management point of view. We feel pretty comfortable with that. I would caution this room on is that every year there's a topic in asset management that sort of grabs the attention of people. Last year, 2024, it was probably private credit, and this year it's probably wealth distribution.
What I would say is, while the pool of capital to address from a wealth point of view is probably in excess of $50 trillion worth of assets, if you put the US, Europe, and Asia together, we're at the very beginning of this journey. If I can perhaps give you a sense of that, we now have three products, I think, in the wealth network. It's taken us about two years to get to that point because we've made sure we're doing it responsibly. Part of that is winning the trust of the wealth networks, understanding you've got the right liquidity, curating the portfolios. The good news for us is that on what we've seen recently, what we can raise in a week in the wealth distribution channel when we get it right is an incredibly significant amount of capital in terms of a fundraise.
We're really seeing that potential, but we have put the building blocks in before we've gone out to the market. We feel comfortable that we'll manage that risk and can do it responsibly. I do think it is a question for the industry because not everyone's going to be able to do this. If we don't do this properly, it will be bad for our clients, and that will be bad for our industry. It is something that I think we need to be sanguine about. Bring in the markets, the mark-to-market. Yes. Obviously we are providing regular valuations as we would with institutional clients. These are not, we're not distributing public equities, generally speaking. They're valued as we would in a normal private markets fund.
Yep. Okay.
We'll go to John and then Andrew Lyons, and then we'll move our way back.
Thanks. Question. On topic of private credit, keep going with it. Yesterday, we heard great presentations from your friends over at Macquarie Capital about their great growth in private credit. I wanted to understand how do you manage the conflict as a group? Maybe Alex, you can answer this. When a client comes to you, would you put an asset or some debt on the balance sheet versus into a fund? Is there a conflict between the two, and how do you decide where it goes?
There is no conflict. We've got very clear swim lanes in terms of what are the areas that MAM are operating in in terms of the products we can raise and what we're doing on the balance sheet. That balance sheet business is a great business.
We're really proud of it. You can see the growth and the returns. I think the loss rates they've got would be market-leading. As a shareholder, I would like that business to continue. As a colleague of MacCap, I want to see that business growing, and they've got real expertise. There is no need for us to operate in that area. The good news is private credit is massive. Our ability to look at private credit maturely as a financial services firm and say, "Okay, well, this is a team that's great at doing this, and that's good. And this is a team that's great at doing that," is part of what makes Macquarie what it is. We have very clear swim lanes.
The fact that we've come together, say, to now raise funds from our client base, the MAM client base that we have deep relationships to help that credit business grow, I think is a good example of the openness and collaboration we have in our business. We don't have any conflicts. We have very clear swim lanes. Where we see an opportunity that perhaps the balance sheet can't fund on itself, what we're trying to do is capture for shareholders that opportunity and do that by bringing the best of MAM and matching it with the best of MacCap and then creating a business. We're excited about that opportunity set. I think, as Tom and Peter both alluded to, we're seeing good client support for that, both in the European and the U.S. funds. Those strategies have a good momentum.
No conflict, just collaboration.
Okay. Second question. It's great to hear about raising because a lot of the time we hear about the assets, but the raising is there. Two very quick questions on it. 400 c lients you've got at the moment. How much of the top 10, top 15 clients, what % are they? Is there a lot of concentration, or is it a very fat tail?
It's a pretty broad, it's a pretty broad base. I don't know off the top of my head, to be honest. I don't know, Phil, if you know.
No, I think probably made the flashy stand-up for you. Yes, she should. I think the great comment in her presentation around the diversity of her book of business.
I think she said her largest client in her region is $500 million, and the smallest is five and every bit represented in between. I think when you look at the 400 clients in Europe and you could extrapolate that globally, the same picture is true. As a business, we celebrate the fives as much as we do the 500. It is a very long tail. It is a very diversified book.
Yeah. I think the key point, John, is we're not dependent in any strategy on any one client that if that client moved away from us, it wouldn't suddenly mean that 10% or 25% or even 5% of the AUM would go away in terms of that broader asset class. We have a big focus on a diversified base.
I think if you have a look at, say, our global relationship agreements, they've grown very significantly over the three years. That's the strategic partnerships we've put in place with the big allocators. We've now got those in place in the US. We've got those in place in Canada. We've got those in place in Australia. We've got those in place in Europe. We've got those in place in Asia. It sort of goes to the diversity of our client base .
Thanks. Just an unrelated question to Brian's question on the product suite and particularly open-ended funds. I guess two parts to it. Firstly, could you perhaps just help us to understand how the revenue model from Macquarie's perspective is similar or different to the more traditional closed-end funds? In the medium term, how big a part of your fundraising might this ultimately become?
Yep. First of all, very similar fees that we get on, say, a 10-year closed-end infrastructure fund that we would get in the open-ended fund. Same sort of base fee rates, that sort of thing. Secondly, as opposed to being paid a performance fee at the end of the life of the fund, we'll be paid a performance fee on a NAV every five or so years. It will depend on the nature of the fund and the nature of the asset class, but similar sort of fee loads, similar sort of fee profiles, but slightly different mechanisms for the nature of, say, things like the performance fees.
How large could it become?
How large could the open-ended funds become? To be honest, it's hard to know to give you a sense of that.
I think the asset management business, particularly in private markets, goes in cycles. We had private markets with listed vehicles. Everyone went to a 10-year plus 2, 20 over 8 vehicle. We've now got the rise of open-ended funds. I think really what that is, is about more diversity for clients and giving them ability to access different asset classes with different liquidity profiles. I think open-ended funds are here to stay. I think there'll be a bigger portion of MAM over time. I don't know exactly what the percentage of that will be, but certainly we don't see a lack of appetite for our traditional closed-end funds at this stage. If you look at MEEF 7, MIPS 6, we're about to launch May 4 into Asia.
If you look at the energy transition fund, if you look at what we're doing in the real estate area as well, there is still our traditional clients there want more access to that. The good news is they also want access to open-ended funds. That allows us, if you just use infrastructure or energy transition or green investments as an example, to be able to offer different products and solutions up and down the risk spectrum. We are putting more core assets into the open-ended funds, which people want, particularly because they generate more yield. The higher returning assets go into those regional funds. Where people want even more exposure to a specific thematic like energy transition, we can offer core renewables in the open-ended fund because that makes sense from a return profile and a scale point of view.
That higher returning sort of renewables 2.0, we offer in that closed-end fund. We are really trying to tailor our products. I mean, the most important thing that I do want you to take away from that is we do not just invent this all in a dark room by ourselves because we think it is a good idea. Our job is to go and talk to clients and understand what their needs are. As opposed to just saying, "Here is a product. Give us some money." We go there and say, "What solutions are you looking for?" That is really the genesis of a lot of these products.
Just a question coming back to direct lending, which you are obviously just starting. Look, there are obviously benefits of the asset management business being part of the Macquarie Group, but is that one instance where there are some drawbacks?
I mean, you could look at the Alts universe, and really that's the fastest growing part of the Alts market, and your traditional infrastructure pocket is growing more slowly at the minute, just given what has obviously happened to interest rates. I mean, was there an element of not wanting to step on Macquarie Capital's toes in not entering this market sooner?
Look, I wouldn't say there's any—there's certainly not a drawback, no. We're an institutional asset manager, and we have enormous benefits being part of the Macquarie institution: brand, balance sheet, track record, reputation, people. And that gives us a lot of—that's a huge part of our artillery as an asset manager. Equally, we do not have a track record in Macquarie Asset Management of being a direct lender, but Macquarie Capital does. So even if we were to do that and compete with them, we're at a very different starting point.
What we need to—I think rather what we've done than rather think about cannibalizing another division, that is a high-performing business. What we thought about is, how can we take advantage of that? I think if you look at the evolution of MAM here in EMEA, but as the broader group, we've always taken businesses and incubated them in areas or started them in areas and then pivoted them or fiduciarized them—that is actually a word—or fiduciarized them over time. If it wasn't before, it is now, by the way. We'll talk about that later. Yeah, we've always done that. I actually look at this as it's exciting that we can use this collaboration, and who knows where that will go. We're acutely aware that a lot of businesses we have today were started in other parts of Macquarie and vice versa.
That is the magic of Macquarie. We do not want to do anything to dim that. Sometimes it comes with putting the firm first as opposed to a particular division. You would hope that any mature leadership team, whether they be MAM or the broader Macquarie team, would always put the firm and shareholders first as opposed to their own divisional P&L. I do not find that an issue, and certainly my team does not. Feel free to talk to them later on during dinner. You say it is a massive—prior credit to direct lending is a massive global market, and you must do lots of peer analysis and see that was the fastest growing part of Alts. Why not address it sooner, I guess, and still—yeah, I mean, look, I—present for not entering the market sooner. I suppose putting funds out into the market.
We've obviously been thinking about it for some time to get to this point, to get the structures in place and raise the funds. We've been thinking about it, but it hasn't been an area that we've had a mandate to invest. The second thing is the credit space is massive for us. There are lots of other things that we were already doing that we're already good at that we've been doubling down at. I would come back to when you're from an asset management point of view, we can't, nor do we want to be all things to all people. We really do the things that we're great at. I think, Peter, the fact that if you look at our global fixed income business, which is based out of Australia, that's doing a great job.
We put resources into growing that and growing infrastructure lending and moving into real estate lending and those sorts of things because we can see the opportunities there, but also clients will give us money for that because we've got a track record and because it's a deep pool. What we focus on is where can we win? Our determination is we don't want to be competing with Macquarie Capital, but working with them, we can win more. The proof is that clients are giving us money for that. There is a big opportunity there to grow. It's a fair criticism. Maybe we should have accelerated this.
Just a second question on the infrastructure side of things. Obviously, the IEC presentation yesterday talked about record pipelines, the improvement we've seen since bond yields started to fall.
Are you seeing green shoots in terms of fundraising? I know it's lumpy because you've got very large geographic fund series, but what are you seeing in terms of the potential green shoots in fundraising on traditional infrastructure?
I think it's funny that if Macquarie's been doing this for more than 30 years, and it's a bit odd for someone to say, "Oh, infrastructure is having its time in the sun when you've been doing it for 30 years and been one of the pioneers." I think how infrastructure has performed over the last three years, particularly relative to other classes, core, core plus real estate, but also PE, I think institutional investors around the world have woken up and said, "I need more of this, and that's great for our business." Now, it's also great for our competitors, but we love being in a competitive environment and feel that we can win more market share and win more clients. We are certainly seeing that happening. We feel good about the fundraising environment.
We would note that the last two years have been more tricky because of more macro global issues, and we all know that. I think the fact that we're closing funds, if you look at, say, the growth of AUM in the green business, that's a great example of businesses growing four times in the last three years when people would probably say that's been the most difficult fundraising market in the last 15 or certainly since the GFC. I think where you have expertise, where you have people, where you've got a track record, people will give you capital. Most importantly, it comes down to can you deliver the returns you say you're going to deliver? If you do that, people will give you capital.
I think the other side of that is, as I said before, we've signed or closed $100 billion worth of deals year to date. There's more to do. That's sort of year to date, probably to the—I think it was the end of December, those numbers. That also, I think, goes to the fact that not only is there capital available for us, but also we can deploy that. We feel pretty good about the market. I'd say the one point that I do want you to take away with is, it's not just here in EMEA, there would be very few firms operating today that are originating more than 70% of their acquisitions.
If you look at the transaction we did with Dow in the US, if you look at what we did with Veritas and Hutch TPG in Australia, if you look at what we did with D.E. Shaw in the US, or you look at a number of the examples that Martin raised, those are long, complicated transactions that sort of took about 18 months from our team having an idea and then working with a counterpart, but all of them were proprietary bilateral deals. I think what you do need to—what we do need to remember is not many people have that skill set or that credibility to do that. That is a real asset for us. Yeah, I think we feel positive about the next 12-24 months.
Like you, we wake up every day and see the drama and the noise sort of that the world's talking about and need to make sure that we're looking beyond that, sticking to our fundamentals but also calibrating appropriately. Yeah.
I think Tom said in his presentation that sub-investment grade or high-yield infra debt is going to be a major source of growth. Can we get some more details on that? Things like, is it just the market size, or is it mispriced that particular asset class? If so, sort of why is it sub-investment grade? Like gearing metrics and the like, please. John.
There's a microphone. It's still in your lapel, yeah? Oh, yeah. Should it be? You just want the lapel mics on?
Yeah, I think so. There's a couple of ways to think about it at a high level. It's really two flavors.
Firstly, it's expanding. There are two ways to think about it. Firstly, it's expanding the universe of what we invest in. So we go from core—instead of lending just to core infrastructure, you start to lend to core plus, for example. Maybe it's fiber networks, maybe it's data centers, things like that. It expands the universe of maybe what we traditionally consider infrastructure. The second broad way to think about it is where you are in the capital structure. For instance, maybe you go to the Holdco level for a core infrastructure asset or something like that. It's both the type of businesses that we focus on and it's where in the capital structure we can get more risk-adjusted return, obviously with the open mind that we're taking more risk to drive that incremental return. Yeah.
The only thing I would add to that is that traditionally it's very much a bank market. What we see increasingly is that institutional investors coming at the investment grade, but it also creates more space at the sub-investment grade to put an extra structure on it. Just as the market gets more mature, it gets more sophisticated, more sub-i nvestment grade opportunities.
Okay. We'll move that way. Okay. Andre?
Good afternoon, Ben. Andre from Morgan Stanley. Can I ask two questions? The first one just around the realization environment. What are you seeing in terms of the current exit or realization environment? Sometimes your peers talk about targets or the number of investments that they might be in the exit stage. Is there anything you can share with us on that front?
Yep. Maybe Lee, you've been sitting here.
You want to talk about—you want to answer Andre's first question or both questions even? Yeah. Do you want to stand and sit? Yep. Yep. Up you go. Happy to sit. Everyone, this is Lee Harrison.
There you go. I mean, the M&A market has never closed even in the last sort of few years, but it's certainly true to say that the market has been more subdued in the last 24 months than it was in the 24 months previous. We have been buying businesses. We have been selling businesses throughout that whole period. It is harder to get to a realization than it was more than two years ago. When we run the processes, when we run a traditional process, we would get to sort of final bid stages, and there's less at that final bid stage than there was a couple of years ago.
In saying all of that, the exits that Martin sort of showed on the screen earlier, we realize incredibly healthy realized returns when we've run those processes. There is still depth of buyers. You've got to work harder to realize those outcomes. We've done a really good job at realizing those exits in the last sort of few years.
Yeah. I'd say I just add one comment to that. We have never and most certainly do not play the game of our business plan was all about leveraging up our equity and selling into a market that required expanding multiples. If you think about our 185-plus portfolio companies, those are good businesses with growing cash flows. And as you know, there is a lot of dry powder out there.
We are selectively selling those down as it makes sense in terms of where we think we can realize a good exit. We are doing it in a measured way. We are also doing it in a way that allows us to not find ourselves at the end of funds and suddenly have not done our job where we've got five portfolios to companies to sell in a year where it looks like we're rushing so that we don't have to come to some other arrangement with our LPs. We have done this through, as you know, Andre, many cycles. We've got a very experienced team. Whether you use the examples that Martin gave, if you look at what we've done in Asia recently, we're selling businesses down but doing it at a cadence that makes sense for the market.
That's part of the art of asset management. We don't want to sell everything in a year. We want to make sure that we can maximize the bidders, but that we're not dependent on just multiple arbitrage. We're selling to the market businesses that are better than what we bought them for from their underlying capacity. That's what gives us confidence.
Yep. Just another quick question. Just in terms of public markets, because I think you've given us a lot of color today on the private market side, are there any comments you'd like to make about public market strategy either globally or in EMEA context?
Yeah, sure. The reason we haven't talked about public markets today is that it's a very small part of our EMEA business.
When we were last together in the US, we hosted you in the Philadelphia office, which is 100% a public markets business. The reason for sort of the focus today is really what makes most sense in this region. Peter touched on the quality and the size of our public credit business, which is a growing business and certainly an important business to our clients. Our equities business globally, which is principally our business in the US and Australia, continues to deliver good returns. That remains a plank of the MAM business and a business that continues to perform well both for clients and for shareholders. Outside of that, there is not much else to say other than we like having that complexion of businesses, and they continue to be well supported.
Great. We have got a Brendan.
Hi, it is Brendan from Citi.
I just got a question around scale. It's been a pretty important driver in funds management. I look at your infrastructure business over 20 years. You've had scale pretty much since day one. When you think about these new products in credit, PE, real estate, how are you going to compete against the scale players that we now see in those markets? And what's your point of differentiation? Is it a better return, or how do you differentiate your fund?
Yep. I think one of the things you probably saw, particularly from the example that Gillian and Rafa gave you, is how we build a relationship with a client, often around a core offering where we might have long experience and depth. It might be around something to do with infrastructure.
Over time, we cross-sell that client into a product that makes sense to them from a solution point of view that allows us then to manage more capital for them across multiple products. Yeah. It is fair to say, certainly in the private markets, often our entry point into that client has been through infrastructure. We are operating in an era where, particularly in private markets, clients want to do more with fewer for less. For a lot of the B allocators, we already have a significant relationship with them. Because we have delivered for them on their existing capital, they have confidence to back us to do new things that might be moving into infra PE adjacencies, which is part of the focus in Lee's business. It might be to move into the credit space.
It might be to move to support our opportunistic real estate place. The most important thing that we want to be sure of is that when we do take that client relationship and evolve it into a new area, we can do a good job for that client. We do not take money if we do not think we can do a good job for that client. That means that we really make sure we have invested in the right team to do that. Part of our expansion in terms of our leadership capacity is where we think we need to augment our existing team to make those moves. We will go out and recruit with someone like Peter.
will go out and recruit someone with industrial experience or with a PE track record or someone who has been good at opportunistic real estate, and then back that team over time with capital and with the resources to deliver. We feel we can move into it. I think we have got a proven track record, frankly, of moving into adjacencies. We are open to making acquisitions as well where we might want to accelerate that scale. I think Shemara and Alex have been very open at various results meetings of saying that we are looking for acquisitions that may help accelerate that even further. I do think that has to be part of our game plan.
Fundamentally, we choose areas that we think we can win where we've got good deal flow, we've backed good people, and we give them the time and the resources to develop the business. That's been the story of Macquarie for 55 years. If I go to my own experience, when Frank and I were sort of starting the Asia infrastructure, we had basically nothing. We really leveraged off our European expertise and those relationships to bring clients into that region and build those teams. We moved into private equity in Asia and so on. Again, it's a playbook that we've followed and followed around the world for many decades.
Just the second question on your growth in revenue across the total MAM business. In the last couple of years, we've seen sort of high single-digit, low double-digit in private market, like base fee growth?
In the public markets, we've obviously seen declines, and it's led to a rather flat-looking total revenue. When we think about these adjacencies and the building out, say, here in the private markets, is that to offset further declines you expect in the public, and you'll see this business mix shape over time, or do you expect we're going to see a real acceleration of base fees?
First of all, you are—I mean, you're factually right that we've seen a rotation of assets in the public's business. Assets generally coming out of the equities business that attract higher base fees and into fixed income, which attract low base fees, which means while we might gain more assets, they're at a lower fee load. That either means that the revenues stay flat or slightly decline.
I think, as we've said before many times, we still believe, having been in that business for a number of years, it's delivering good returns on capital. We are obviously well aware of the structural trends of that asset class. Yes, we are in the business of growing revenues, but most importantly, growing earnings. We want to be playing in areas where they have good tailwinds from an industry point of view in terms of flows of capital, but also where that—so flows of assets that attract higher quality revenues. Those higher quality revenues are obviously where we can get dollars with higher base fee loads. That is certainly our focus, and that is part of our growth plan for now.
Yep. Go to Ed. We've probably got about 10 minutes before we have to go.
Thank you. Just a couple of questions on the green side.
Can you just talk about the impact of government subsidies, how you think about those and returns? When you look at returns, are you discounting those subsidies or are you taking them away?
As a first question for us. Sure. Lee, do you want to talk about green investments? There is a microphone just here. Also, if you just stand up again, that would be great.
Thank you. The reality is across the globe, there has been a huge shift away from relying on government subsidies to invest in these projects. The world has moved to corporates and other counterparts who are the main revenue off-taker. Now, it is obviously true in areas that need the support in the early phases of their growth, of their maturity, like the U.K. offshore wind sector when it first developed significant subsidies to helping the sector to maturity.
These days, increasingly so, the off-taker is corporates, and they're writing long-term PPAs. We've got a team within our organization who is set up to just write corporate PPAs. That's all they do. They've written more than 6 GW around the world. That's the off-taker who's de-risking these projects these days. When we look at newer areas or newer sectors that still don't have that commercial maturity and there aren't government supports and government subsidies, obviously, you need to take that into account in the underwrite and the risk profile around those government support mechanisms. They're all different, right? When we invest into a new project, if you've got a high-quality off-taker with a high-quality contract, you'll take that into account in the underwrite.
Just take into it, the thing to remember around the world is that that is reducing. When you look at wind and solar in particular, it's corporates who are driving those revenue streams. Just a second question on the green assets, just broadly, obviously, with what's happening in the States. Can you just run through, obviously, globally, what assets have still got strong appetite for and what are seeing a bit more of a challenge in transactions and stuff? Yeah. Obviously, the markets around the world are very different. They're not homogenous. A lot of news out of the U.S., quite rightly. One thing to remember, again, is that the lowest cost of delivery for new energy production around the world is often in wind and solar. That's true in the U.S. as well.
Despite the headlines, and the headlines are obviously right, and they're repeating the administrative policy there, President Trump and the administration, they're not anti-renewables. They are pro-energy and they're pro-domestic business. I mean, you look at some of the growth they're trying to foster within the U.S., it requires significant amounts of power. The lowest cost of delivery in many of the states, many of the markets in the U.S., is going to be solar. That will still continue at pace in the U.S. The same is true around the world. It's the lowest cost of delivery in many markets, wind and solar onshore. There's obviously challenges in other sub-markets. Offshore wind in the U.S. is one example where the Trump administration, rightly or wrongly, has decided they prefer not to subsidize that technology at this stage in the U.S.
That has more challenges than the onshore wind and solar in the U.S. All the sub-markets around the world are operating slightly differently. Just remember that the cost competitiveness of these technologies is what's driving much of their growth in the world. That's what corporates are looking to invest into. They're the main off-taker.
For the absence of doubt, right, energy transition investment has doubled in size in the last three years. In 194 out of 195 countries, it's not controversial. The opportunity set is massive. There are more workers involved in green energy today around the world than there are in traditional energy. There is a lot of noise. It doesn't mean that policies won't change or be updated. It doesn't mean that everything that's been put in place makes sense. The opportunity set for us remains huge.
I think John asked me not that long ago about, I think a couple of years ago, we said that we think that the energy transition business over time, that sort of area can be as big as what we've built in the traditional. We've not changed our view. We continue to see great support from clients. We're working with stakeholders, whether they be corporates or governments all around the world. At the moment, we're going through a period where it is pretty noisy. Again, our job is to look at the facts and do the analysis, not get caught up in the drama. Luckily, we've got an experienced team that has been doing this for 20 years, right?
If you were doing this, and if you started doing this over two, if you started doing this two years ago, it'd probably be pretty confronting. If you've been doing this for a long period of time and you've gone through what happened in Spain or sort of the changes in feed-in tariffs in other certain markets, we've seen many of these movies before. When we're making the investment, we've got smart, experienced people who run all the different scenarios. That comes back to having a really great investment culture, which is all focused about delivering superior returns, but also augmenting that with a great risk culture. We're doing this eyes wide open.
Yeah. Great. Thanks. Thanks. You said that the average return in the MEIF Funds was 13% per annum. How has that changed over time?
I think that's actually been pretty consistent over time, has it not, Lee?
Yeah. I think that's probably the realized return.
It's the gross realized return.
It's the gross return.
Yeah. Yeah.
T hat was the gross realized return. Yeah. Yeah. Yeah. I mean, I'll stand up. There you go. Third time lucky. Yeah. B roadly consistent to the target returns of the funds have been 10-12%. That's been the case from the first fund we raised in 2004 to the most recent one that Martin talked about, and it'll be the case for the next one as well. Obviously, the performance across the ranges does change. Broadly consistent around the funds.
It's important to remember from your point of view as a shareholder, obviously, gross returns are important, and that's our track record and what gives us the trust of our clients to continue investing with us. Money multiple is just as important. That's what drives the performance fees that we earn. We only get those fees after our clients have realized value. It's the money multiple over an 8, 10, 12-year whole period that then drives the economics.
The MEIF Funds have grown considerably, as you've shown. Your investment in MEIF Funds, are you able to invest a smaller proportion now?
Similar percentage, sort of higher dollars. The first MEIF Fund we invested EUR 50 million. That was the GP commit. It's now basically 1% is what we're it's a good mission by our clients to align ourselves.
The most recent fund, EUR 8 billion, EUR 80 million is what we've invested in. You'll see that in the larger mature closed-ended funds. 1% is a reasonable rule of thumb. In some of the newer strategies, we'll put more balance sheet support into those strategies to show alignment with our clients. It's actually a good thing to do. We're getting the return on that capital as well. You'll see larger s in the newer funds.
How have your competitors changed over time, and what have you learned from that?
Changed in what sense?
The extent to which they're more aggressive or not.
Yeah. I think on that, I mean, that's an important question. Generally speaking, we do not come up against other asset managers when we're making investments.
It differs by region, but I think that goes to our ability to source opportunities for ourselves. Where it does come up is that people don't have infinite capital in terms of, say, allocation to infrastructure. It's certainly a more crowded space than it has been before. The way we really show our value to the clients is, one, that generally, we've had a long track record with clients being able to deliver for them. That matters. Second of all, we have been able to offer clients very good co-investment opportunities, certainly the bigger allocators, which is a big point of difference. Thirdly, we are often playing in a different space to some of those other competitors. It comes back to the point I sort of made before. Martin made this point too.
We size funds not to say, "Oh, this is the biggest fund in the world." We size fund for the opportunity set. Generally, what we're doing is investing into businesses where the EV is $2 billion, $3 billion, $4 billion and growing those businesses over time to sell them to either strategics or other financial sponsors who are more in the game of asset accumulation, where they're buying a business that we've grown to $15 billion, $18 billion, $20 billion. That means for us, a lot of the time, we're actually selling portfolio companies to competitors, but we don't buy portfolio companies off competitors, and we don't go through cost of capital shootouts in most cases. Some cases, obviously, we do, but in the majority of cases, we don't do that.
There is more, there's certainly more funds in the marketplace, more asset managers in the marketplace in the broader infrastructure world. We just have to make sure we keep doing a great job. We love competition, right? We welcome competition because it makes us better. Also, as a human being, the world never has enough private infrastructure capital. We know that infrastructure is the cornerstone of economies. We want there to be more capital available to invest in the building blocks of economies. We'll never be able to do that completely ourselves, and it would be incredibly selfish and somewhat a pyrrhic victory. We want to be a good corporate citizen. We like the competition.
In terms of the business model we've developed over time, while we have to deal with that in terms of probably from a client allocation point of view, our day-to-day business has not been further complicated. Do we look at what those asset managers do and see what we can learn from? And do they do that vice versa? Of course, we do because we're always open to the chance of getting better or improving. I don't think they're more or less aggressive than us. I do think each of us have a slightly different way of doing business, and that just makes sense for our cultures and the capital we represent.
All right. Without wanting to cut the Q&A short, in the interest of getting us all to Farnborough Airport, that i s, thanks to Ben, thanks to the team. Great presentation.
Just before you all move off, there will not be any toilet facilities or any other facilities at the airport. If you need to use facilities, please do so here. We will see you over there. Thanks again. Thanks very much.