Macquarie Group has a market capitalisation of $70 billion, and Storey is quick to say that such a valuation looks overly generous. “We do, however, think that the market implies a substantially lower value for private markets and that this BlackRock and GIP deal is incrementally positive for Macquarie’s overall valuation.”

Storey edged his 12-month target price for Macquarie up from $180 to $185; the stock edged higher on Monday to about $183, although it’s worth noting Macquarie stock has jumped.

‘Private capital needed like never before’

Perhaps the bigger story here is the 20-year bet that BlackRock chief executive and co-founder Larry Fink says the GIP deal represents. In its presentation on Friday night when announcing the deal, BlackRock said it expects the infrastructure sector to grow from $US1.2 trillion in the middle of 2022 to $US2.5 trillion by the end of the 2027 financial year, a compound annual growth rate of 16 per cent.

What’s driving this is a fascinating supply/demand equation. While Fink said on Friday night that demand was likely to come from areas including energy (particularly decarbonisation), transport and digital infrastructure, highly indebted governments simply cannot step up and supply the capital required to build this stuff.

“The unprecedented need for new infrastructure, coupled with the record high government deficits means that private capital will be needed like never before,” Fink said.

He further argues that in a world of ageing populations, where more and more investors are looking for inflation protected investments, infrastructure investing “will define the future of asset management for the next 20 years”.

Macquarie should, of course, expect the merged BlackRock/GIP to be a stronger competitor. But as Wikramanayake has frequently argued, the opportunity set in a world that needs $US75 trillion in infrastructure investment in the next 15 years means there is no shortage of growth to be had. And Macquarie’s ability to find the next pockets of infrastructure profit are legendary.

UBS values MAM at $15.8 billion based on its 2025 financial year earnings, after lifting its price to earnings multiple for the division from 15 times to 20 times.