Keeping track of Macquarie Bank is no easy business. What with $140
billion in assets spread around the world, 26 different investment
vehicles and a continuing flow of deals and assets shuffles, it all
becomes a bit of a blur.

However, a close relative of mine appears to be right when he says “buy
Macquarie Bank, but don’t risk of any of the satellites because the fee
leakage is too high”. The following table shows how four of the six
Australian satellites have gone backwards in a booming market over the
past 12 months.

Vehicle Current price One year ago Movement
Macquarie Capital Alliance $3.48 $4 float price -13%
Macquarie Airports $3.03 $3.44 -11.9%
Macquarie Infrastructure Group $3.42 $3.70 -10.2%
Macquarie Communications $5.40 $6 -10%
Macquarie Media $3.04 $2.75 float price +9.5%
Macquarie Goodman $5.35 $4 +33.75%
Macquarie Bank $69.65 $45 +54.77%
Macquarie Leisure $2.93 $1.68 +74.4%

After years of under-performance, Macquarie Leisure has turned around
nicely thanks to increased domestic leisure activity but you’d be most
unhappy as an investor in Macquarie Airports, tollroad giant MIG,
Macquarie Communications and Macquarie Capital Alliance.

No wonder “net fee and commission income” from the specialist funds was
down from $556 million in the first half to $446 million in the second
half. Surely this sort of ongoing poor performance should not be
tolerated by shareholders and independent directors.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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