Macquarie launches wholesale pastoral fund

21 June 2007

Macquarie Financial Services Group has launched the Macquarie Pastoral Fund, a wholesale fund which will own and operate beef cattle and sheep production properties in Australia.

The fund aims to raise between AU$200m and AU$1bn and is believed to be the first time that the combination of beef and sheep meat production has been publicly available for investment in Australia.

Macquarie Pastoral Services Director, Tim Hornibrook, said the Macquarie Pastoral Fund was a unique opportunity to benefit from the increasing worldwide demand for red meat.

He said the fund aims to create a portfolio of land and livestock enterprises of such a scale and spread that it will be able to capitalise on the potential future growth in world demand, while leveraging some of Australia's natural competitive advantages.

“The advantages that Australia has include its disease free status, its proximity to Asian export markets, diversified supply relationships, and production cost advantages,” Mr Hornibrook said.

“International research shows that increasing disposable incomes, particularly in Asia, are expected to translate into increased consumption of red meat as a source of protein.

“By 2010 Asia is expected to import more beef (in volume) than Australia’s total production.

“Australia has a strong competitive advantage in the production of red meat and on volume Australia is the second largest exporter of beef and lamb in the world, but on dollar value we are the largest exporter of beef in the world.

“Australia’s reputation for high quality meat means we capture a premium price for our beef exports which explains the variance between being the second largest exporter of beef on volume and largest on value.”

Mr Hornibrook said the Macquarie Pastoral Fund would provide equity-like exposure to the operating business, but because the underlying assets of the fund will be land and livestock, Macquarie believes this will provide the security and capital growth potential normally associated with an investment in tangible assets.

“The livestock will be bred and fattened for sale both domestically and internationally - generating a source of income returns that will have economies of scale. We will also be looking at wool production as a bi-product.

“A number of significant property acquisition opportunities have arisen recently which are making this a very exciting proposition as the returns on large scale farms since 1979 have been comparable to equities but with lower volatility*.”

“We will be looking at properties in the geographic area that stretches from the Kimberley (WA) through to northern Victoria and across the Barkly tableland (NT) and just west of the Great Dividing Range into the NSW Riverina district.

“This takes in three climactic zones, a move that we believe will reduce the risks of adverse weather effects.

Mr Hornibrook said the fund had put together a first class team of experienced pastoralists in combination with Macquarie’s investment management experience to manage the fund.

These include Cattle breeder Alister McClymont from northern Australia and (NSW) Riverina sheep breeder David Taylor who owns the Pooginook merino stud.

He said Macquarie Pastoral Fund would be headed up by the experienced pastoral company managing director, Alan Hayes.

Mr Hornibrook said investment in property is expected to start towards the end of the year.

He said the fund would be open for both domestic and international institutional investors and a number of international funds had already approached the management team to discuss the structure.

About Macquarie Financial Services
Macquarie Bank Group is a diversified international provider of specialist financial and investment banking services with more than 10,000 people in 24 countries. Macquarie Bank is listed on the Australian Stock Exchange and at 31 March 2007, had total assets of approximately £56.1 billion and funds under management of £81.1 billion. The Financial Services Group is the primary relationship manager for Macquarie Bank’s retail client base in Australia, New Zealand and Thailand. Services include the distribution of Macquarie's Australian Cash Management Trust, Wrap and pension administration platforms, relationship management for 15,000 independent financial advisers throughout Australia, as well as stockbroking, private banking and wealth management and the manufacture of managed funds and distribution of third party funds.

*(The ABARE Farm Survey). Australian Commodity Statistics, 2005 – Australian Bureau of Agriculture & Resource Economics (ABARE).

Macquarie Pastoral Management Limited, ABN 26 122 169 368, AFSL 307086 (“MPML”), is the offeror and Responsible Entity of the Macquarie Pastoral Fund, Australian Registered Scheme Number 123 245 483 (“MPF”).

The MPF is available to Australian Financial Services Licensees, wholesale clients, sophisticated and professional investors. It will also be available to qualified institutional buyers, qualified institutional clients, professional accredited investors in the USA, UK, Canada, Singapore, Hong Kong, Japan, UAE and the Netherlands. It is not available to any retail investors in any jurisdiction.

An Information Memorandum is available from MPML or MPML’s appointed securities broker-dealer, licensed entity or private placement agent. Prospective investors should contact MPML on the numbers / email addresses above to receive a copy of the Information Memorandum.

The MPF has not and will not be registered in the USA under the USA Securities Act of 1933 and may not be offered or sold in the USA to or for the account or benefit of USA persons, as defined in Regulation S of the USA Securities Act, except in transactions exempt from registration requirements under the USA Securities Act. The MPF will not be registered in the USA under the Investment Company Act of 1940. In the USA, the MPF will be offered through a registered US broker-dealer. The MPF has not and will not be registered in any of the UK, Canada, Singapore, HK, Japan, UAE and the Netherlands.

This information is being distributed in the UK and the Netherlands by Macquarie Europe Limited which is authorised and regulated by the UK Financial Services Authority.

MPML, the MPF and any appointed broker-dealer are not authorised deposit-taking institutions for the purposes of the Australian Banking Act (Cth) 1959, and the obligations of the aforementioned entities do not represent deposits or other liabilities of Macquarie Bank Limited (“MBL”). MBL does not guarantee or otherwise provide assurance in respect of the obligations of the aforementioned entities.

For further information, please contact:

Karen Smith
Corporate Communications Manager
Macquarie Bank
Tel: (44) (0) 20 7065 2420