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Going private

MACQUARIE Bank is offering retail investors an opportunity to buy in to a new private equity fund, the Macquarie Private Equity Trust II.

Private equity funds aim for higher returns than stock exchange-listed companies by investing in smaller, private companies at a time when they are poised to experience accelerated growth.

The total size of the private equity market in Australia is estimated to be $9.3 billion. This includes $1.4 billion raised in 2001 for investment in private companies.

Until a few years ago, private equity was the exclusive preserve of institutions and high net worth investors.

However, a range of well-known fund managers, including Colonial First State, has joined Macquarie in offering private equity funds, so that investors have greater scope to diversify their portfolio.

Macquarie Bank has more than 197 years’ experience in private equity, having invested more than $320 million in 40 companies.

Some of the companies in which Macquarie has invested include Neverfail Spring Water, Millers Retail, JB Hi-Fi, Hermes Precisa and Repco. It has generated returns of 23.5 per cent per annum over this period, more than double the returns generated by the All Ordinaries Accumulation Index of 10.7 per cent.

“Through an investment in private equity, individual investors can get in on the ground floor of exciting private company investments, which offer significant prospects for expansion, but which have historically been difficult for individuals to invest in,” Macqurie’s Sandy Lockhart said.

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Total Shareholder Return as at 30/06/16

1 year TSR5 year TSR
67thNewcrest Mining76%-8%
135thRamsay Health Care38%36%
171stBrambles26%17%
182ndSonic Healthcare25%19%
421stMacquarie Group-11%24%
744 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Revenue

17th-Macquarie Group$9,368.0m
18th↑Ramsay Health Care$8,690.5m
20th↑Brambles$7,583.0m
24th↑Sonic Healthcare$5,048.4m
25th↑Newcrest Mining$4,476.2m
77 listed non wa companies ranked by revenue.
Source: Morningstar

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