Macquarie meets growing demand for alternative assets with new Equinox offering

26 May 2004

Macquarie today launched its third Equinox Portfolio, an alternative asset investment that again offers investors the opportunity to diversify their exposure by investing with a range of expert  fund managers.

Following the success of the April series of Macquarie Equinox, which raised $50m, the second Macquarie Equinox Portfolio again provides investors with an alternative investment containing absolute returns with capital protection, but with some subtle changes.

The New Equinox Portfolio now consists of six fund managers, representing two main investment strategies. These are:

• a  group of three diversified funds of International Hedge Funds
• a group of three Tactical Traders

The addition of two new diversified funds is due to the capacity constraints of one of the managers.

“Macquarie has sought out some of the world’s best managers in these areas, but one of the managers will reach capacity and is due to close its doors to new investors,” Macquarie Division Director Cathy Kovacs said.

The managers in Equinox  were chosen for their experience, strict risk controls and proven track records. Each has more than four years track record trading in a variety of market conditions.

The managers trade equities, bonds, currencies, and commodities and derivatives in an attempt to generate attractive returns whether the financial markets are rising or falling.

Because of this the investment is uncorrelated to traditional investments like equities, fixed income and property and can provide investors with diversification within their portfolio.

“Investors in Equinox will receive the benefit of profit lock-ins through a rising capital protection facility, provided by Macquarie Bank Limited, plus the possibility of cash dividends and the potential for capital growth,” Ms Kovacs said.

“The capital protection will initially be set at 100% and may rise through profit lock-ins being declared.

“If investors believe markets will be volatile, Equinox provides a strong opportunity to benefit from that volatility, rather than simply hoping markets will go up year on year.”

Macquarie Bank is also making an optional investment loan available to Australian investors for up to 100 per cent of their total investment. The loan is for a minimum of $40,000 and investors can choose to make interest payments annually in advance, or quarterly in arrears.

“Given that the end of the financial year is fast approaching, many investors are looking to make investments and to use tax efficient structures, like investment loans, to pre-pay interest before June 30. The optional investment loan to purchase Equinox, fits into this space.”

Macquarie has sought a product ruling from the ATO on the deductibility of the interest expense.

“The investment is designed to give retail investors exposure to sophisticated investment and trading strategies with  the security of capital protection, the cash flow of dividend payments and the added bonus of profit lock-ins. The optional investment loan gives them additional flexibility in tailoring their exposure,” Ms Kovacs said.

Ms Kovacs said the last Equinox series attracted a diverse range of investors, from individuals to Self Managed Super Funds, from novices to professionals, seeking an investment that aims to generate returns in both rising and falling markets, with capital protection.

“The alternative asset allocation in investment portfolios continues to be a focus of investors as they look to diversify their total investment portfolios and reduce overall risk,” she said.

For further information, please contact:

Irene O'Brien
Public Relations
Macquarie Financial Services Group
Macquarie Funds Management Group
Tel: (612) 8232 3241
Mobile: (61) 417 260 309

Cathy Kovacs
Division Director
Equity Markets Group
Tel: (612) 8232 8683

This general advice has been prepared by Macquarie Equities (Australia) Limited
(ABN  58 002 832 126) and does not take account of your objectives, financial situation or needs.  Before acting on this general advice you should consider the appropriateness of the advice having regard to your situation.  We recommend you obtain financial, legal and taxation advice before making any financial investment decision. All potential investors should obtain the prospectus issued by Macquarie Equinox Limited relating to the financial products mentioned and consider it in full before making any decision about whether to acquire that particular financial product.