Korean Road Infrastructure Fund announces third close

15 January 2004

Macquarie Bank and Shinhan Bank, the joint managers of Korea’s first private infrastructure fund, the Korean Road Infrastructure Fund (KRIF), today announced the third close of the fund, raising an additional Korean Won (KRW) 272.7 billion ($304 million) of investment commitments from institutional investors.

The latest raising follows the KRW367.5 billion ($410 million) raised to the end of April 2003 and KRIF has more than doubled in size since being launched one year ago.

KRIF now has total commitments of KRW640.2 billion ($714 million). The majority of additional investment commitments came from existing KRIF investors, with Mizuho Corporate Bank of Japan becoming the fund’s first offshore investor (other than Macquarie) with an investment commitment of KRW10 billion ($11 million).

Macquarie Bank participated in this latest fund raising and increased its existing investment commitment by KRW10 billion ($11 million). Macquarie’s total investment commitment in KRIF is KRW40 billion ($44.6 million) and represents 6.2 per cent of the fund’s total commitments.

KRIF is a closed end 10-year fund providing Korean institutional investors with diversified exposure to local infrastructure assets.

KRIF Managing Director Nick van Gelder said KRIF has received substantial support and a vote of confidence from Korean investors and is now in a strong position to further invest in infrastructure assets across Korea.

“As Korea’s first specialised road fund established by the private sector, KRIF has made significant progress its first year of operation – establishing toll road investment as an infrastructure class, doubling investment commitments from investors for a total of KRW640.2 billion ($714 million) and committing over a third of its available investment capital into four projects that have an enterprise value of more than KRW4.5 trillion ($5.0 billion).”

“KRIF’s high yielding profile has proven to be an ideal investment opportunity for Korea’s institutional investors and we look forward to continuing to build on our presence and commitment to the Korean market.”

“KRIF has also secured exclusive or preferred position to invest in further toll road assets located in Seoul and other major cities in Korea, all with concession rights of 25 years or more. We expect 2004 to be an active year for the fund." Mr van Gelder said.

KRIF has to date fully settled on two investments:

• The 28-year concession rights to a 5.6km toll road, the Kwangju Second Beltway (Section 1), in Korea’s fifth largest city, Kwangju, for a purchase price of KRW177.8 billion ($198 million);
• The KRW32 billion ($36 million) acquisition of five year converting bonds issued by the Daegu-Busan Expressway Co, the developer of an 82-km toll expressway that will link Daegu to Busan (Korea’s third and second largest cities respectively).

KRIF continues to actively investigate toll road investments, with several under documentation, and expects to be in a position to announce further investments in the near future.

KRIF was Macquarie’s first infrastructure fund developed using funds sourced specifically from institutions in a foreign market, in this case primarily large Korean insurance companies and pension funds.

The fund is managed by Macquarie Shinhan Infrastructure Management Co. Ltd (MSIM), a Korean asset management company jointly owned by Macquarie Bank and Shinhan Financial Bank and staffed by executives with expertise in infrastructure asset management.

Macquarie has substantial infrastructure funds under management, with over $16 billion in infrastructure funds under management worldwide. Infrastructure investments managed by Macquarie include assets in the transportation, water, telecommunications and energy sectors.

For further information, please contact:

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309