Australian infrastructure investment group Macquarie is plotting an audacious £3.5bn-£4bn consortium bid for Southern Water, the utility that provides water to at least one million households in Kent, Sussex, Hampshire and the Isle of Wight. Last year, Macquarie led a consortium of investors to buy Thames Water from RWE for around £8bn. Macquarie has contacted several advisers about a potential offer for Southern Water and is believed to have received an information memorandum on the business, according to people familiar with the matter. The move may cause a stir as regulators have opposed the ownership of more than one large water utility by any owner, or group of owners. Last year, Macquarie led a consortium of investors to buy Thames Water for around £8bn from German power company RWE. Since then, Macquarie Bank has transferred its ownership of Kemble, the vehicle that owns Thames Water, from its balance to its own infrastructure funds, which now own around 45pc of the holding company. According to a position paper by water regulator Ofwat, the rest of the equity in Kemble has been split out among 14 different infrastructure investors, ranging from Santander Private Equity to the Queensland Investment Corporation. Other investors in Thames brought in by Macquarie include Stichting Pensioenfunds ABP, one of the biggest pension funds in Europe, and Portuguese infrastructure investor Finpro. It is not clear whether Macquarie plans to finance a bid for Southern Water by providing equity from its own balance sheet or from its own infrastructure funds. People familiar with Macquarie’s plans said the group was primarily looking to put together and advise a consortium of infrastructure funds interested in buying Southern. This may allow Macquarie to get over competition and anti-trust hurdles. An Ofwat spokesperson said: “We would need to see the structure of a bid before we comment”. Royal Bank of Scotland appointed Deutsche Bank earlier this year to carry out an auction of Southern Water, which could fetch up to £4bn. First round bids are due in at the end of August. If Macquarie does proceed with an offer, it is likely to face stiff competition from several other investment banks that have also set up infrastructure funds, such as Goldman Sachs and UBS. UK water assets have been sought after by infrastructure bidders because they offer stable returns that can help match the funds’ liabilities.