Sydney’s much-resented Cross City Tunnel has become the lightning rod for a reappraisal of the infrastructure investment boom in general and Macquarie Bank in particular – even though the Funnel (short for the f******* tunnel) is not one of Macquarie’s fee sources.

Now funds manager Peter Morgan warns in a Eureka Report interview of an infrastructure investment bubble that will inevitably burst with very unhappy consequences. The build up in leverage increasingly reminds him of the 1980s.

Morgan was the star investment manager for Perpetual Trustees who left to set up his own house, 452 Capital. He admits to being a pessimist by nature, but is happy to see the present stock market correction go further.

“We’re starting to see some rationality come back to the market place, ” he says. “A lot of products today are being sold on the basis of yield, but the yield may not be there when times get tough.”

There’s increasing sniping at the Millionaire Factory, as reported in the Smage. Macquarie Bank is a powerful institution to risk getting offside. If you have a career death wish in Sydney, take on Macquarie, News Corp and Westfield and you’re pretty well covered.

Now in consecutive editions of Eureka Report, two respected and well-established market leaders have sharply questioned the infrastructure investment boom. Perennial Investment Partners executive chairman Mike Crivelli weighed in on Friday and now Morgan has a slash.

“The leverage being put into some of these vehicles is incredible,” Morgan says. “At some stage there will be creativity that goes too far and the bubble will burst. I honestly believe there’s a bubble developing at that end of the market.”