Macquarie injects more into Southern Water with new partner

Macquarie Asset Management (MAM) along with Asterion Industrial Partners as a new minority shareholder has injected an additional £300 million ($566m) of equity into Southern Water.

Asterion Industrial Partners is a European infrastructure investment manager headquartered in Madrid with around US$10 billion in assets under management. Most of the latest equity commitment will be provided by Asterion giving it around 20% stake in Southern Water.

This follows £900 million ($1.7bn) of equity committed by Macquarie during 2025, taking the total investments by MAM-managed funds into Southern Water to more than £2.8 billion ($5.3bn) since its acquisition in 2021.

"We are pleased to welcome Asterion Industrial Partners as a new minority shareholder, reflecting growing confidence in Southern Water's management team, its progress and its future plans," Macquarie Asset Management senior managing director Martin Bradley said.

"While there is more to do, the focus remains on continued delivery. This capital supports the sector's largest growth programme relative to its size, with the company doubling the investment per household in the region for the benefit of its customers and the environment."

Asterion Industrial Partners chief executive Jesús Olmos said the investment will provide primary capital to help fund Southern Water's significant capex programme focused on strengthening and modernising essential water infrastructure.

"This transaction marks Asterion's entry into a new sector in one of our core geographies and is fully aligned with our strategy of backing essential infrastructure with long-term capital and industrial expertise," Olmos said.

"We see a strong opportunity to support Southern Water's operational improvement, while contributing to the long-term resilience of critical infrastructure in the UK."

Macquarie said the equity invested to date has supported an operational turnaround that has accelerated through the first year of the new regulatory period to March 2026, with £1.1 billion ($2.1bn) deployed over the year as the company began delivering its 2025-30 programme.

Southern Water pleaded guilty to sewage disposal which polluted rivers and coastal waters in southern England and was handed a record fine of £90 million ($172m) in 2021.

Morningstar noted Southern Water was among five firms in the UK which were not allowed to hike bills by as much as they had requested, following a decision by the UK Competition & Markets Authority.

That decision came after the UK water regulator Ofwat in November blocked bonus payments to the bosses of several firms, including both Southern Water and Thames Water, based on performance and pollution issues.

Macquarie said Southern Water continues to make progress against its operational turnaround, delivering improvements across a number of measures including water supply interruptions, leakage and external sewer flooding, alongside a record level of capital investment in its network.