Macquarie breaks silence on Thames ownership
Srichand Myneni
June 14th 2025
Written by Srichand Myneni
Thames Water, the UK’s largest water utility, is facing a financial crisis with debts nearing £20 billion. As the company seeks up to £3 billion in emergency loans, attention has been diverted to the role of its former owner, Macquarie, the Australian infrastructure investment group that had control over the utility between 2006 and 2017.
In a recent investor presentation, Ben Way, head of Macquarie Asset Management, defended the firm’s record, stating, “We’re actually proud, very proud of our ownership of Thames Water.” He insisted that no UK regulator had ever viewed Macquarie as anything other than a responsible and constructive owner during its tenure.
Macquarie acquired Thames Water when the utility had £3.4 billion in debt. By the time the firm sold its final stake, the debt had risen to £10.8 billion. Since then, the company’s financial position has deteriorated further, leading some stakeholders to question the long-term consequences of Macquarie’s financial strategy.
Criticism has focused on the significant sums extracted during Macquarie’s ownership. Approximately £2.7 billion was paid in dividends and a further £2.2 billion was issued in shareholder loans. Critics argue that these payments contributed to a fragile financial structure that prioritised shareholder returns over the resilience of essential infrastructure, a problem which can arise with privatisation.
Sarah Olney, Liberal Democrat MP for Richmond Park, was among those who criticised Macquarie’s stewardship. She accused the firm of overseeing a period in which billions were extracted from the business while environmental damage increased, including the discharge of sewage into British rivers.
Macquarie has consistently rejected these claims. The firm points to £11 billion in capital investment during its ownership, which it claims was the highest per customer of any water company in England and Wales at the time. It also highlights a 22% reduction in water leakage and a 75% fall in pollution incidents compared to 2006 levels. “It was a much better business, imperfect, but much better, after our stewardship,” Way said, adding that current problems should not be attributed to decisions made almost eight years ago.
Today, Thames Water is searching for new investors to stabilise its finances. KKR, a US-based private equity firm, has emerged as a preferred bidder, reportedly offering £4 billion for a majority stake. Some existing shareholders, including the Ontario Municipal Employees Retirement System and Abu Dhabi’s sovereign wealth fund, have written off their investments entirely.
Macquarie remains active in the UK water sector, having taken a majority stake in Southern Water in 2021. Like Thames Water, Southern is heavily indebted, carrying approximately £6 billion. In response, Macquarie is injecting £900 million of fresh equity and negotiating with lenders on potential loan writedowns.
The situation has reignited the broader debate around private ownership of essential public services. While proponents argue that private investment can modernise infrastructure and improve the efficiency of production processes, critics warn of the long-term risks when financial engineering is prioritised over service sustainability.
