Macquarie Capital Alliance Group Offer to Raise $1 Billion

17 February 2005

This press release does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption from registration.

Macquarie Bank Group2 (Macquarie) today launched its new broad-based co-investment fund, Macquarie Capital Alliance Group1 (“MCAG”), which is seeking to raise $1.0 billion through the offer of 250 million stapled securities3 at $4.00 per stapled security, payable in two equal instalments.

The MCAG offer has been increased from $600 million to $1.0 billion following strong institutional and broker firm interest and will now be fully underwritten at that level by Macquarie Equity Capital Markets Limited and Goldman Sachs JBWere Pty Ltd.

MCAG, which will apply to list on the Australian Stock Exchange, will have a broad, global investment mandate, with the ability to invest in any industry sector other than property.  MCAG intends to access Macquarie’s unrealised investment opportunities by co-investing alongside Macquarie and/or its clients, including the Macquarie-managed funds.

The MCAG offer comprises an Institutional Offer available to certain Australian and offshore institutional investors, a Broker Firm Offer open to Australian and New Zealand resident retail investors who have received a firm allocation from their Broker, and a Priority Offer available to eligible Macquarie employees, eligible ordinary shareholders of Macquarie Bank Limited (as at 21 January 2005) and eligible stapled security holders of Macquarie Airports, Macquarie Infrastructure Group, Macquarie Communications Infrastructure Group and Diversified Utility and Energy Trusts (all as at 21 January 2005).  There is no general public offer.

As part of the offer, Macquarie will make a $100 million cornerstone investment, reflecting its underlying confidence in the Fund’s offering. The investment will result in minor reductions to Macquarie’s capital adequacy ratios.

MCAG’s Chief Executive Officer will be Mr Michael Cook, one of Macquarie’s most senior and respected investment bankers with a 19-year history of mergers and acquisitions activity.

Mr Cook today said, “With more than 1,700 specialist investment banking employees in 44 offices across 23 countries, Macquarie has access to significant investment opportunities across a diverse range of industries.

“Many of the investment opportunities identified by Macquarie’s global network are not currently fully utilised due to their large investment size, the speed in which the investment must be made or the fact that multiple opportunities often arise simultaneously.

“MCAG expects to be able to co-invest in these types of opportunities, drawing on Macquarie’s deal origination and execution expertise and leveraging its strong funds management track record, using the skills and experience of the MCAG team.

“The establishment of MCAG is a logical and timely development in Macquarie’s investment banking business, evidenced by the fact that the institutional and broker firm components of the MCAG offer are already fully committed. 

“Significantly, the majority of institutional pre-allocations were made to offshore investors and, excluding the $100 million commitment from Macquarie, approximately half of the offer has been pre-allocated to institutional investors, including four substantial investors,” Mr Cook said.

The Broker Firm Offer will open on 3 March 2005 and close at 5.00pm (Sydney time) on 24 March 2005 while the Priority Offer will open on 3 March 2005 and close at 5.00pm (Sydney time) on 23 March 2005. The allotment of stapled securities is expected on 4 April 2005 ahead of MCAG’s listing on the ASX on 8 April 2005.

A copy of the combined prospectus and product disclosure statement for the MCAG stapled securities is available at www.macquarie.com.au/mcag.  That document should be considered before making any decision to acquire the stapled securities.  The offers of stapled securities will be made in, or accompanied by, a copy of that document and persons investing in MCAG will need to complete the application form accompanying that document.

Board of Directors

Upon listing, MCAG will have a majority of independent directors, all of whom have significant operational expertise in evaluating value-returning investment opportunities.

Mr Rowan Ross will be Chairman and act as Macquarie’s representative on the Boards of MCAL and MCAML.  Mr Nicholas Moore will also be appointed to MCAML’s Board but not to MCAL’s Board. 

The two independent directors of both Boards are Mr Robin Crawford and Mr Peter Warne.  A third independent director will be appointed to both Boards before securities are allotted to investors.

Management

MCAG will be managed by Macquarie Capital Alliance Management Limited, a member of the Macquarie Bank Group.

Mandate

MCAG will have a mandate to invest across a broad range of sectors such as industrials, technology, media, telecommunications, entertainment, resources, financial institutions and infrastructure, with property the sole sector exclusion.

It will be able to pursue a broad range of investments, including takeovers, recapitalisations, underwriting, bridging finance and pre-IPO capital, with gearing used to maximise returns.

Under the co-investment model MCAG may be the cornerstone investor in an investment or it may take a minority stake where Macquarie or its clients are the major investor.

At this point, no specific assets have been identified for acquisition.

For further information, please contact:

Investor Relations:
Erica Sibree
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Media Relations:
Suzanne Mercer
Tel: (612) 8232 8525
Mobile: (614) 1394 6706


[1] To the extent that this release contains financial product advice, it is made by Macquarie Capital Alliance Management Limited (“MCAML”) (AFSL No 236894, contactable on 1800 215 868).  No particular investor's investment objectives, financial situation or particular needs have been taken into consideration.  Investors should consult their own legal, tax, business or other financial advisers in connection with any acquisition of MCAG stapled securities.

[2] Investments in MCAG are not deposits with or other liabilities of Macquarie Bank Limited or of any other entity in the Macquarie Bank Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested.  None of the members of Macquarie Bank Group, including MCAML, guarantees any particular rate of return on MCAG stapled securities or the performance of MCAG, nor do they guarantee the repayment of capital from MCAG.

[3] MCAG stapled securities comprise units in Macquarie Capital Alliance Trust ARSN 112 638 212, issued by MCAML as responsible entity, and shares in Macquarie Capital Alliance Limited ("MCAL").

Attachments:

Background Information (pdf 7KB)

Presentation to Media (pdf 1,464 KB)

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