| February 20, 2001 | Media Release |
Macquarie today announced that its new Global Infrastructure Trust will open to investors prepared to commit a minimum of $20,000.
The trust will invest in the wholesale Macquarie Global Infrastructure Fund, announced three weeks ago. It is Australia's first unlisted global infrastructure fund for retail investors.
Mr Tim Farrelly, Executive Director at Macquarie Financial Services Group, said: "We think there is strong appetite among people who may have a diversified portfolio of investments and for whom $20,000 represents an affordable entry point to a unique asset class.
"The life of the fund is expected to be 10 years, by which time investors should receive their capital plus returns.
"Infrastructure is a relatively conservative category within the generally high risk/high return "alternative assets" class of investment. We recommend that investors think about devoting a up to 15% of their portfolios to investments in alternative assets, including infrastructure.
"In time, there should be greater liquidity in this fund from progressive repayments of capital and earnings, as assets are realised over the life of the investment."
The fund aims to deliver total returns of around 15% pa or more.
"The fund is seeking to raise $100 million dollars from retail investors. The opportunity to invest will be open until 30 April."
There are no other unlisted vehicles available at present in the Australian retail sector for people seeking exposure internationally to roads, bridges, airports and other such investments categorised as "infrastructure".
Macquarie is a world leader in infrastructure investment. Macquarie has some 300 executives worldwide who are involved in infrastructure advisory and management services.
The money committed would be "called" by Macquarie in two instalments, initially 60% on application, with a further 40% called within 4 years.
This staged "call" process will allow investors to plan their long term cash flows. It was the successful model used by Macquarie when it raised $90 million from retail investors for the Macquarie Private Equity Trust in 1999, which was in turn invested in a wholesale fund, Macquarie Investment Trust III.
"Macquarie will exit from each of the assets it buys and makes distributions to investors, which we expect will usually be half-yearly. Initially, distributions will mainly be in the form of income," said Mr Farrelly.
"Later, as assets are realised, investors will receive a combination of income and realised capital gains.
"While the trust itself is not expected to pay tax, individual investors will be taxed on distributions according to their own tax rates.
"Certainly, the Macquarie Global Infrastructure Trust is a rare opportunity for retail investors to add to their portfolios a long-term, high growth component that also provides a hedge against volatile equity markets," he said.
No more than 25% of GIF is expected to be invested in Australia, with 75% allocated to buy into assets in OECD countries, primarily in North America and Western Europe.
The fund has already made three investments - the Detroit Windsor Tunnel, USA, and two Australian fibre-optic cables and bandwidth supply ventures, Reef Networks and NextGen Network.
For further information please contact:
Tim Farrelly, Executive Director, Macquarie Financial Services Group:
02 8232 3654
Laura Veltman, Media Liaison, Macquarie Financial Services Group:
02 8232 6706; 0414 668 970; 02 9958 4487
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