Macquarie opens new offer of the Macquarie Newton Multi-Strategy Fund – Capital Protected

27 April 2006

Macquarie Portfolio Management Limited ("Macquarie") today announced the launch of a second series of the Macquarie Newton Multi-Strategy Fund - Capital Protected.

The Macquarie Newton Multi-Strategy Fund - Capital Protected provides capital protection[1] to new investors who are looking to gain access to Macquarie Newton Specialist Funds Management Limited's ("Macquarie Newton&'s") flagship absolute return and specialist equity strategies fund, the Macquarie Newton Multi-Strategy Fund. The capital protection[1] is designed to ensure that investors'initial outlay of capital is protected at the capital protection date of 3 June 2013.

Cathy Kovacs, Division Director in Macquarie's Equity Markets Group, said that there is high demand from retail investors looking to access Macquarie's trading expertise in a variety of hedge fund strategies but with the benefit of in-built safeguards.

Late last year the first series of the Macquarie Newton Multi-Strategy Fund - Capital Protected raised over $70m, making it the most successful capital protected fund raising from Macquarie Portfolio Management Limited.

"The launch of the Macquarie Newton Multi-Strategy Fund in October 2005 was the first time the Macquarie Newton's absolute return and specialist equity strategies were made available in one portfolio to the retail market. The capital protected offering is an enhancement for retail investors looking for added risk protection and provides a whole new dimension for investors seeking access to Macquarie's absolute return and specialist equity strategies," Ms Kovacs said.

"Investor appetite for absolute returns is set to increase as investors look for ways in which they can diversify their exposure away from traditional long only managed funds. This new initiative adds a safeguard for those who are risk conscious."

Demand for Macquarie's fund expertise is reflected in the growth of funds under management. Macquarie Newton Specialist Funds, part of the Macquarie Bank Group, already has over $230 million under advice from Australian wholesale and retail investors, and some off-shore investors. Thirty per cent of these funds was invested on a capital protected basis.

Macquarie Bank has a track record of trading absolute return and specialist equity strategies via the principal trading desk of its Equity Markets Group. In October 2003 Macquarie Newton Specialist Funds Management was founded to make these strategies more generally available. The Macquarie Newton team of portfolio managers, many of who are ex-principal traders, are responsible for the ongoing management of the strategies offered in the Macquarie Newton Multi-Strategy Fund.

"This offer enables investors to gain exposure to six strategies that range from equity long short, relative value trading, tactical trading and special event-driven strategies such as mergers and acquisitions. We expect that the fund’s strategies will also evolve as markets develop and additional opportunities arise.

"These sophisticated strategies are normally difficult and often impossible to access by the average investor trading on their own," said Ms Kovacs."

"While the strategies are invested largely in Australia, increasingly opportunities are being found in Asian equity markets including Singapore, Hong Kong and Japan. This is of interest to investors who have already profited from gains made domestically and are looking to diversify overweight Australian holdings," Ms Kovacs said.

For those not wanting to risk an initial outlay of capital, the new capital protected fund is offered with an optional 100 per cent finance facility. Like other leveraging facilities for financial products, this may provide some investors with tax benefits such as the ability to pre-pay interest prior to financial-year end. The minimum loan amount is $50,000 and interest rates start at 7.25%pa.

"Macquarie has a boutique trading model for hedge funds, which are offered within a strong operational risk framework with advanced execution, pricing, risk management and compliance monitoring systems. The Macquarie Newton Multi-Strategy Fund has been given a 'recommended' rating by Zenith and a four-star rating by Standard & Poors," Ms Kovacs said.

"Macquarie Newton does not rely solely on the upward movement of the equities market, but strives to provide good returns from each strategy in a variety of market conditions. Our funds provide diversity across a variety of sophisticated hedge fund strategies in a way that aim to provide attractive risk-adjusted returns".

The Macquarie Newton Multi-Strategy Fund commenced with four strategies and at 1 April 2006 grew to include six single strategy funds: Special Events, Buy Write, Global Futures, Australian Absolute Return, and the two new funds Income Timing and Asia Statistical Arbitrage.

The Multi-Strategy Fund has returned an average of 1% per month since inception (to 28 February 2006), while the since inception return (to 31 March 2006) of the four initial component funds is as follows:

Investment Performance

Past performance is not necessarily a reliable indicator of future performance. For more recent Fund performance visit www.macquarie.com/newtonfunds.

The Funds existed as wholesale trusts prior to conversion to registered managed investment schemes. Return information has been adjusted for the differences in fees that were charged by the wholesale trusts and the registered managed investment schemes.

Total return information has calculated on a per annum basis after taking into account Fund Fees and expenses (in particular including Performance Fees but not any Contribution Fee or Withdrawal Fees) and assuming reinvestment of distributions.

It is not possible to calculate the hypothetical performance of the Macquarie Newton Multi-Strategy Fund using the past performance information provided above as the funds and the allocation between them may have varied over the same period.

Information about the Macquarie Newton Funds

Special Events Fund: This fund provides exposure to special situations that arise in the Australian and New Zealand share markets, including arbitrage opportunities arising from mergers and acquisition transactions, relative value arbitrage opportunities, and Initial Public Offerings or share buybacks. This fund aims to deliver consistent returns with moderate to high volatility and a low correlation to the Australian share market.

Buy Write Fund: This fund aims to enhance income from an Australian share portfolio by investing in a portfolio of dividend paying shares and further enhancing income by selling options, a traditional strategy known as 'buy and write'. This funds' objective is to provide long-term investors with income above that of the S&P/ASX200 Index.

Global Futures Fund: This fund provides investors with leveraged exposure to major equity markets around the world using futures contracts, this funds uses systematic trading models to take advantage of short term price movements in global equity markets. The fund aims to achieve high returns with high risk.

Australian Absolute Return Fund: This fund is designed to provide returns that are uncorrelated to the Australian share market. Using a quantitative model to select stocks, and by aiming for market neutrality, this fund aims to achieve absolute returns with low to moderate volatility. This fund provides an alternative to traditional long only equity funds.

Income Timing Fund: This new fund aims to achieve consistent returns with low correlation to global share markets and low to moderate levels of risk by taking advantage of historical pricing anomalies that have been identified as occurring during the period leading up to a security's "ex-dividend" date.

Asia Statistical Arbitrage Fund: This new fund uses quantitative models to select shares in market sectors which have historically shown a high tendency to revert to the average of that sectors performance, with the intention of achieving returns which have moderate to high levels of risk relative to Asian share markets.

[1]Capital protection will only be available on the capital protection date. Capital protection will be provided by Macquarie Bank Limited by way of a put option. Capital protection is subject to the terms and conditions of the Put Option Agreement which is described in the product disclosure statement for this fund.

For further information, please contact:

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

Macquarie Portfolio Management Limited ABN 55 092 552 611 ("RE")is not an authorised deposit taking institution for the purposes of the Banking Act (Cth) and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie") or any other Macquarie Group company. Macquarie does not guarantee or otherwise provide assurance in respect of the obligations of RE.

This general advice has been prepared by Macquarie Portfolio Management Limited ACN 092 552 611 ("RE") the issuer and responsible entity of Macquarie Newton Multi Strategy Fund - Capital Protected ARSN 115 880 352 ("Fund"), the Macquarie Newton Multi-Strategy Fund ARSN 115 880 389 and that of the underlying Macquarie Newton Specialist Funds. Series 2 Units in the Fund are offered under a Product Disclosure Statement ("PDS") dated 24 April 2006, available from the RE on 1800 025 513 on or around 28 April 2006. All potential investors should obtain the relevant PDS and consider it before making any decision about whether to acquire, or continue to hold, units in the Fund. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your particular situation. This advice does not take account of your objectives, financial situation, or needs. Macquarie Bank Limited ABN 46 008 583 542 (&"Macquarie Bank") or its associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles; may buy or sell the financial products as principal or agent, and may receive fees, brokerage or commissions for acting in these capacities. For further information on conflicts, refer to the PDS.

RE is not an authorised deposit taking institution for the purposes of the Banking Act (Cth) and its obligations do not represent deposits or other liabilities of Macquarie Bank or any other Macquarie Group company. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of the RE.

Capital Protection is only available on the capital protection date and is subject to the terms and conditions described in the PDS.