Macquarie Bank’s new venture capital offering, the Macquarie Investment Trust IV, is the first new fund to benefit from the Venture Capital Limited Partnership (VCLP) reforms which remove capital gains tax for foreign investors from July 1.
The wholesale closed-end investment fund aims to raise its $400 million target by securing $150 million from institutions, $100 million from foreign investors and $150 million from individual investors.
It will invest in unlisted Australian and New Zealand companies which have good management and committed owners who have also placed their own money at risk. These businesses will also have strong and sustainable market share, and the ability to list in the medium-term.
The fund has a target IRR of 25 per cent pre-tax and pre-management fees. Macquarie Bank will receive a performance fee of 20 per cent of capital gains, in addition to its annual base fee of two per cent, reduced by capital returns and indexed for the CPI.
Macquarie Direct Investments managing director Sandy Lockhart expects super funds to be attracted by the bank’s track record. Over the past 19 years, it has generated overall returns of 31.5 per cent a year for investments held for more than a year, which is more than double the 10.7 per cent returned by the All Ordinaries Index over the same period.
Macquarie Bank’s private equity successes include investments in well-known Australian companies like Millers Self Storage, Neverfail Spring Water, JB Hi-Fi and Cell Net Technologies.
