Macquarie is converting its Infrastructure Income Opportunities Fund into a business development company (BDC), targeting wealth investors and aiming to leverage private credit opportunities in sectors like energy and transportation. BDCs have seen rapid growth over the last decade, but recent market turmoil has led to a significant decline in sales earlier this year.
Despite these challenges, Macquarie believes there’s an opportunity in the BDC sector, having filed with the SEC for regulatory approval. This BDC will mainly focus on infrastructure-related private credit investments, including private loans, bonds, leases, and asset-backed financing in areas such as energy, digital infrastructure, transportation, water, and waste management.
The fund aims for investments characterized by stable cash flows and resilience, targeting consistent yields and downside protection. While primarily investing in private U.S. firms, it can allocate up to 30% of its portfolio to non-qualifying assets, including businesses outside the U.S. However, broader market trends indicate that BDC fundraising has dropped significantly, reflecting ongoing pressures in the asset class.
