Macquarie sells its 26% stake in Thames Water

Macquarie, the Australian infrastructure bank, has sold its stake in Thames Water to two other infrastructure funds in the latest sign of interest in steady income-paying British water companies from overseas institutional investors.

The stake in the UK’s largest water company will be transferred to Canadian pension fund OMERS, through its infrastructure investment manager Borealis, and Wren House, the infrastructure investing arm of the Kuwait Investment Authority.

Macquarie, which said it was selling its stake as its infrastructure fund reaches maturity, was seeking £1bn-£1.5bn for the sale, which had been delayed from last year in part due to uncertainties over the impact of Brexit.

Thames Water is Britain’s biggest water supplier, with a regulatory capital value of £11.9bn, providing about 2.6bn litres of tap water to about 9m customers per day in London and the Thames Valley region.

The sale comes 10 years after Macquarie, along with a consortium of investors, bought Thames Water from RWE for £8bn.

Macquarie noted that Thames Water had made several improvements over the period, including a significant reduction in leakage, with 25 per cent less water lost than in 2006 and investment in renewable energy.