Macquarie launches listed private equity group

31 January 2005

Macquarie Funds Management today launched a private equity group which will be seeded with a diversified and established portfolio of private equity assets – the Macquarie Private Capital Group (MPCG).

MPCG, which is managed by Macquarie, provides investors with access to the return potential of investments in unlisted companies and assets as well as the liquidity of a listing on the Australian Stock Exchange.

Most private equity investors are usually locked into a private equity investment for extended time periods because these funds may be illiquid for up to 10 years, but MPCG intends to apply to be listed on the ASX, providing the scope for investors to trade their investment.

MPCG will invest through specialist managers in both traditional private equity sectors (such as venture capital, expansion capital and buy-outs), as well as have exposure to sectors such as property, resources, infrastructure and mezzanine and distressed debt. Access to these specialist managers is usually only available to institutional investors.

MPCG aims to provide investors with a diversified exposure to a range of specialist managers, across a range of industries, which will help MPCG to manage the potential risk of investing in unlisted companies.

Macquarie Funds Management Division Director, Robert Credaro, said Macquarie had carefully chosen the specialist fund managers to invest on behalf of the Group.

“Private equity investing tends to be characterised by specialist managers bringing some unique operational and financing skills to each investment,” Mr Credaro said.

Mr Credaro said MPCG will provide investors with exposure to an established portfolio of private equity investments diversified across more than 20 managers and sectors and more than 200 distinct investments.

This initial exposure comes from the seeding of MPCG with approximately $51 million of assets from a Macquarie Managed Wholesale Trust which will become a cornerstone investor in MPCG. This portfolio has exposure to companies including Affinity Health, Bradken, Austar, John West, Sheridan, Nudie Juices and Pumpkin Patch. In the past few years realisations from underlying managers’ funds have included JB Hi-Fi, Pacific Brands, Repco, and the Just Group.

The private equity fund of funds raised by Macquarie over the past eight years have produced the following after fee returns up to 31 December 2004:

  Inception Date Three Years (% pa) Five Years (% pa) Seven Years (% pa) Since Inception (% pa) ASX Since Inception (% pa)(3)
MAIT I (1) 02/98 20.2 14.1   15.9 10.2
MAIT II (1) 07/01 42.3     38.0 9.6
SOT (1) 10/96 16.6 10.6 14.1 13.5 11.8
Co-Invests (1) 09/96       38.5 (2)  

(1) Performance is reported after fees and expenses, but before tax. Performance of MAIT I and MAIT II and the Co-investments are based on money weighted rates of return based on amount and timing of cash inflows and outflows for an investor in each of these fund, plus the unrealised value of their investments. Performance of SOT is based on time weighted rates of return including unrealised investments.

(2) Based on 12 co-investment deals since September 1996 involving $13.5 million of invested capital.

(3) Based on S&P/ASX 300

Note that past performance is no indicator of likely future performance

Macquarie Deputy Managing Director, Richard Sheppard, has been appointed Chairman of the MPCG Companies.

Mr Sheppard said MPCG continues Macquarie’s history of innovation through bringing liquidity to a number of unlisted asset classes.

He said infrastructure funds such as Macquarie Infrastructure Group, Macquarie Communications Infrastructure Group and Macquarie Airports have been leaders in their area, whilst in property, funds such as Macquarie Goodman, Macquarie DDR and Macquarie Prologis have all been leaders in their market.

For further information, please contact:

Irene O’Brien
Public Relations
Macquarie Funds Management
(02) 8232 3241
0417 260 309

This release has been prepared by Macquarie Investment Management Limited

ABN 66 002 867 003 AFSL 237 492 (MIML), a member of the Macquarie Group of Companies. It has been prepared without taking into account the objectives, financial situation or needs of any investor, which should be considered, together with the offer document, before investing. Investors should seek their own advice about an appropriate investment or investment strategy.

It should not be relied upon as personal advice nor is it an offer of any financial product.

An initial offer of securities in the Macquarie Private Capital Group is intended to be made by MIML in February 2005 on the expiry of the exposure period of 7 days following lodgment of the offer document (or such longer exposure period as specified by the Australian Securities and Investments Commission). The offer document will be available from that time from 1 Martin Place Sydney and as otherwise distributed or made available.

Applications for securities in the Macquarie Private Capital Group can only be made on the application form contained in or accompanying the offer document dated 31 January 2005.

Investments in MPCG are not deposits with, or other liabilities of, Macquarie Bank Limited ABN 46 008 583 542 (MBL), MIML or any other Macquarie Group Company, and are subject to investment risk, including possible delays in repayment and loss on income and principal invested. None of MBL, MIML or any other Macquarie Group Company guarantees any particular rate of return on, or the performance of, MPCG, nor do any of them guarantee the repayment of capital from MPCG.

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