Morrison & Co taps growing investor demand for renewable energy, digital infrastructure assets

Strong investor demand for alternative assets has allowed Morrison & Co the opportunity to gather $3 billion in new commitments in just over a year since the close of its previous vehicle.

“That was quite a purposeful amount. We’ve had a very strong response,” Nicole Walker, the firm’s chief commercial officer, told DealStreetAsia in an interview. “This is really the first, truly global fund that Morrison & Co has launched.”

The new Morrison & Co Infrastructure Partnership (MCO IP) is an open-ended vehicle that includes $1.5 billion in co-investment commitments from limited partners. It is expected to be deployed into lower-risk digital infrastructure and renewable energy assets.

Funds will be raised in tranches and deployed to about 70%, before more capital is accepted, Walker explained.

“We want to build a portfolio of four to six fantastic seed assets in that first tranche, so that investors get really good visibility of our investment mandate, strategy, and the globalisation of the deal pipeline.”

The first assets are expected to include digital infrastructure. The funds will be divided among markets in the US, Europe, and Australia and New Zealand, with select opportunities in the developed markets in North Asia.

The MCO IP comes just 15 months after the final close of the Morrison & Co Growth Infrastructure fund, at about $415 million.

“Infrastructure has always been [attracting] very significant allocation in Australia with the superannuation funds. But what I’ve now seen globally is that it’s grown so much as an asset class. Allocations are increasing significantly,” Walker said.

She noted that in recent years, infrastructure as an asset class has expanded to include assets such as data centres, which were typically more of a real estate play; and retirement villages, which come under social infrastructure.

“Quite a few traditional private equity sectors have moved down slightly in the risk-return spectrum,” she said. “Healthcare, for example, has become a more stabilised asset class, demonstrating more infrastructure-like characteristics, [with] more yield, more steady cash flows.”

The infrastructure asset class has traditionally been relatively economic cycle-agnostic, although the pandemic disruptions have since hit transport-related assets hard. Nevertheless, infrastructure yields seem to be more attractive amid persistently low bond yields.

At the same time, the broad themes of energy transition and digitalisation are driving demand for renewable energy and data centre assets. For instance, data provider Preqin reported that private equity funds targeting renewable energy raised $52 billion in 2020, and fundraising this year is outpacing that for fossil fuel investments.

Morrison & Co joins a roster of investors, including Canadian pension funds and global managers such as Brookfield and Warburg Pincus eyeing opportunities in these sectors.

Morrison & Co, a specialist alternative asset manager headquartered in Australia, was established in 1988. It invests on behalf of pension funds, sovereign wealth funds, and other public and private pool capital.

The firm counts in its portfolio wind farms, electricity grids, data centres, and student accommodation, as well as domestic airports in Australia and New Zealand.

Walker, who joined Morrison & Co five years ago from Blackstone, noted that the firm’s assets under management have expanded quickly since then to over A$20 billion.

She is expected to move to Singapore at the start of next year, as the firm evaluates the Asian infrastructure market more closely. “We are seeing more interest, not so much for this fund but generally from investors to increase their allocation to Asia. There are probably less managers there today, so that is interesting.”

However, the firm is expected to focus on developed markets in Asia for now, even as Walker acknowledges that the infrastructure needs in emerging Asia are significant. “The ability to have a positive impact, and a material impact on the communities and societies, I think, is really real there,” Walker said.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.