The $1.37 billion cash takeover offer for Macquarie Communications Infrastructure Group from Canadian Pension Plan Investment Board puts a new perspective on Macquarie Group's somewhat dogmatic approach to the valuation of its satellite funds. Since publishing its result for the September half year in November 2008, Macquarie has persisted with valuations on many investments, including in listed and unlisted funds, that are at odds with market valuations. The investment group continued to insist on the merit of its approach at an operational briefing in February 2009.Now that a Macquarie satellite fund has proved that the market has been undervaluing its assets by a significant amount the announcement about the specialist funds can be seen in a different light.The MCIG deal has conclusively backed up the Macquarie argument that the market for long-term, annuity style infrastructure assets has been dysfunctional.Apart from delivering Macquarie a $306 million cash windfall, the MCIG deal will ensure that Macquarie will be able to avoid a further write down in its 18.3 per cent MCIG holding.All of the independent boards of directors of Macquarie satellites are pursuing strategies similar to the board of MCIG. They are trying to unlock the value inherent in the funds through the examination of all options including asset sales, debt refinancing, privatisation, buybacks, capital returns and outright sale.The MCIG board of directors, chaired by Malcolm Long, is going out of its way to ensure no collateral benefits flow to Macquarie from the transaction with the Canadian Pension Plan Investment Board. They have engaged Deloitte to provide an independent expert's report and Grant Samuel to give a view on the independence and reasonableness of its actions.The Canadian fund was one of 30 entities both locally and internationally that were approached by MCIG to explore options for unleashing the value in the fund.MCIG's test of the global appetite for infrastructure funds found that the market is generally suppressed. There is a shortage of capital, there is an unwillingness to take on entities with debt profiles and it is a buyer's market. However, the CPPIB is one of many pension funds around the world that has discovered there is a global shortage of assets to match the profile of their liabilities. Few governments around the world are issuing bonds beyond 10 years and those that have ventured beyond that time span have done so in only small amounts. There are 20- and 30-year government bonds available, but according to an OECD study the maturity of the typical liability profile of mature pension funds is estimated to extend as far as 50 or 60 years. MCIG's assets, which are primarily communication towers in Australia and Britain, have contracts stretching out as far as 32 years in one case and the average is between 25 and 30 years. The total amount of income that will be paid over the life of the MCIG contracts is $13.5 billion. It is this revenue that has been the motivation for CPPIB to take over an enterprise with about $6