Macquarie Bank’s Funds Management Group to Acquire Majority Holding in Allegiance Investment Management

06 March 2008

NEW YORK, MARCH 06, 2008 — Macquarie Bank’s Funds Management Group, today announced it has entered into an agreement to acquire a majority holding in U.S. fixed income fund manager, Allegiance Investment Management LLC (“Allegiance”).  Allegiance manages approximately $4.5 billion in a variety of high quality fixed income products.  Financial details of the transaction were not disclosed.

Founded in 1988 and headquartered in Orange County, California, Allegiance is a boutique investment firm specializing in offering fixed income investment solutions to pension funds and individual clients through financial advisors and brokers. 

Ben Bruck, Head of Macquarie’s Funds Management Group, said, “The acquisition of Allegiance is significant for Macquarie’s funds management business in the U.S. and globally.  Allegiance is a well regarded specialist fixed income firm and this partnership provides us with a platform to build a broader fixed income capability for our clients in one of the world’s largest fixed income markets. Allegiance will complement our existing fixed income operations in Sydney and London.

“Allegiance will form part of Macquarie’s Funds Management Group’s Affiliated Managers program. The program provides our affiliate managers with product development, distribution, operational and risk management capabilities which they can use to grow their assets under management, diversify their product range and increase overall profitability,” said Mr Bruck.

Mark Torline and Bill Mawhorter will continue in their current roles as Chief Executive Officer and Chief Investment Officer respectively.

Chief Executive Officer of Allegiance, Mark Torline, said, “We are thrilled to be partnering with Macquarie’s Funds Management Group, which is one of the largest fund managers in Australia and has a strong track record of managing money on behalf of investors around the world. Our clients will benefit from gaining access to Macquarie Funds Management Group’s investment platform, risk management frameworks and quantitative research capabilities to supplement our specialist investment capabilities.”

To assist with growing the business, Louise Walker, currently a Division Director in Macquarie’s Funds Management Group in Australia, will relocate to Orange County to join Allegiance and head the product management and marketing team.

Allegiance will be re-branded Macquarie Allegiance Capital LLC to reflect the nature of the partnership.  Allegiance anticipates no changes to its current staff as all employees are expected to be a part of the new joint venture entity.  The acquisition is not material to Macquarie Bank Limited or Macquarie Group from a capital impact perspective. The acquisition is subject to completion, which is expected to occur during the second quarter of 2008.

NOTES TO EDITORS

About Macquarie
Macquarie’s Funds Management Group is part of the Macquarie Group (Macquarie) which is a diversified international provider of financial, advisory and investment services, with approximately US$200 billion of total assets under management (as of December 31, 2007). Headquartered in Sydney, Australia, Macquarie Group Limited (ASX: MQG) is listed on the Australian Securities Exchange.   Macquarie employs nearly 12,400 people in 25 countries.

Macquarie’s Funds Management Group has managed assets for pension funds, institutional and retail investors since 1980 and operates in Sydney, Hong Kong, London and San Diego.  With a global client base, the Funds Management Group offers a diverse range of investment styles across the full spectrum of risk/return profiles and in all major asset classes.  As of January 31, 2008, Macquarie’s Funds Management Group managed US$54 billion in funds, making it one of the largest fund managers in Australia.

Macquarie has grown substantially since its beginnings in Australia in 1969 and has reported successive years of record profits and growth since 1992. Macquarie has been active in the Americas for over a decade, establishing its first office in New York in 1994. Today Macquarie has more than 1,700 people in offices in 25 locations across the Americas.

For more information, visit www.macquarie.com/us

About Allegiance
Allegiance Capital is an independent, employee-owned investment advisory firm focused on providing fixed income solutions to investors.  Located in Huntington Beach, California Allegiance has been managing assets for institutional and retail investors since 1988.
 
With approximately $4.5 billion of total assets under management across a diverse client base, Allegiance offers a broad spectrum of fixed income products.  Whether seeking a taxable fixed income product, customized fixed income investments for specific needs, or alternative investment strategies, Allegiance has a wide variety of choices to fill the fixed income asset allocation needs of investors.

For more information, visit www.allegiancecapital.com

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