Macquarie launches third wholesale Alternative Investments Trust

22 October 2003

Macquarie Funds Management today launched its third Macquarie Alternative Investment Trust following on from its first two successful private equity wholesale offerings.

Macquarie Funds Management’s Associate Director, John Brakey, said the new fund offered clients the opportunity to invest with Australia’s premier private equity managers.

He said the private equity market in Australia was rapidly maturing, and this was evidenced by large transactions such as Pacific Brands, Pacific Automotive (now Repco) and Mayne Hospitals being purchased by private equity syndicates.

In turn, many companies that were previously purchased by private equity managers are now returning to market and providing private equity investors with very attractive returns, including JB Hi Fi, Repco, Invocare and Cashcard.

“From an investor’s viewpoint we are currently seeing attractive circumstances for private equity investment,” Mr Brakey said.

"Companies are reasonably cheap compared to four years ago. The reason for this is there has been limited access to capital through the IPO market.

“The timing is also right because many conglomerates are currently shedding non-core divisions and private equity has been involved in bidding for these assets.”

Mr Brakey said the MAIT III structure allows wholesale investors to mitigate some of the risks associated with private equity investments through diversification.

“We achieve diversification by spreading our investments among a number of different industries and companies throughout both Australia and New Zealand. We also spread our investments across the investment cycle, protecting investors from top of cycle investing,” Mr Brakey said.

He said Macquarie had a long history of experience in private equity investment and also had access to wholesale private equity managers that are otherwise closed to new investors.

“MAIT III is a fund-of-fund which will invest with underlying managers that Macquarie regards as the best in their sectors, not only in terms of track record and experience but also appropriate fee structures,” Mr Brakey said.

“Macquarie uses an extensive process of risk control. Because of our experience we understand the risks in this sector and we actively seek to mitigate those risks.

This assists our investors by verifying the valuations provided by the underlying manager.”

The first MAIT fundraising was in February 1998 and had an after fee/before tax return of 9.7 per cent (compared with the ASX 300 which returned 7 per cent) to the end of September 2003. MAIT II was raised in July 2001 and had an after fee/before tax return of 33.8 per cent (compared to the ASX 300 which returned 1.1 per cent) to the end of September 2003.

“MAIT III provides a continuation of this successful investment strategy, offering investors a diversified portfolio of high performing private equity investments which aims to deliver returns in excess of the S&P/ASX 300.”

John Brakey
Head of Alternative Investments
Tel: 61 2 8232 3929
Email: john.brakey@macquarie.com

Irene O'Brien
Public Relations
Tel: 61 2 8232 3241
Email: irene.obrien@macquarie.com